St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-08-18
FINANCE A CENTURY AGO.


FINANCE A CENTURY AGO.
The questions asked by our Howard
Lake correspondent in the letter else
where printed. can hardly be answered
in the space that can be given it in
daily paper. The period covered by the
first question embraces the deYlceS
adopted by thirteen colonies. extending
over century. 1t can be answered,
however, sufficiently we'll by noting the
expedients adopted in what JOHN
FISKE rightly calls the Critical Period"
of our history-that after the close of
the revolution and ending with the
adoption of the constitution. In it the
whole gamut of financing with every
thing except specie was run. From the
'Continentais,' issued, by congress.
which was glorified as the ideal money
because it was so cheap and couldn't
leave the country" and which became
so cheap by 17S0 that SAM ADAMS paid
$1,000 for a nat and suit of clothes,
and barrel of flour brought S1,575, to
the rag money of Rhode Island, that
would buy nothing. the experience was
ample and exhaustive.
Each colony and state had established
its own ratio, and had made the number
of grains of silver in the pound suit its
own ideas of relative values. NOmi-
nally, the English pound. shilling and
pence were the standard, but this pound
and its subdivisions meant different
values in different colonies. 1t ranged
from l,547 grains silver in some to 966
grains in others. with corresponding
variation in the ShillingS and pence.
While accounts were kept in pounds,
the actual money in use was extremely
various. There was the Spanish milled
dollar, with its halves, quarters, eighths
and slXteenths and "joes." half-joes,
doubloons. moidores, pistoleS, pistoreens,
levies. picayunes and other strange coin.
The pound had to be translated into these
different coins,an as the pound differed
in the various colonies so did the value
of the coins. A dollar was eight shil-
lings in New York, and four shillings
eight pence in Georgia. Each colony
decided for itself how "cheap" CT
dear its money should be.
But the supply of metallic money was
felt to be insufficient. and each of the
states during the confederation, except
Virginia, went into the frenzy of print
ing money. In some this was loaned to
farmers and land owners on their real
estate security; it some it was used to
pay creditors of the state. North Caro-
lima got it into circulation when other
nrOuo6 ci NV iT,or
tobacco. In order to insure its plenti-
fulness the agents were ordered to pay
twice as much of the state money for
the tobacco as the planter could get for
it in specie III any of the best markets,
of which our silver men might make a
note. In most of the states this money
was issued directly by the state, and IN
the experience obtained may be found
the significance of the prohibition in
the federal constitution of the emission
of bills of credit by the states.
In none of the states was the plan
carried to its end by logical steps as it
was in Rhode Island. A state bank was
authorized to issue paper money. This
was to be loaned Oh land in sums of
half the value of the land. The farmers
rushed to the bank to get this money.
They were not modest in yaluing their
lands. Loans were made on their full
value, often in excess of it. The farmers
had plenty of money. But when they
went to buy and offered it in payment,
it was refused except at discount that
rapidly grew larger. The legislature
then passed force bill, making it a
crime to refuse to take the money at
par. This was declared unconstitu-
tional by the court. The judges were
dismissed, and a bill passed making it
condition precedent to engaging in
any business that the party take an
oath to support the par value of the
bank money. At this point the scheme
broke down. The frenzy was over, and
the farmers made shift as best they
could to get their paper money together
to redeem their lands from the mort
| cages.
We are running now, hundred years
later, the same course in finance our
forefathers ran so disastrously. The
silyecites today use the same argu-
ments tor their fat coinage that were
then used for the fiat money. There is
this difference, though, that while the
| residuum of wisdom gained by expert
ence is small, it will be sufficient to save
the country from the disasters our ia
theirs experienced as the fruits of theil
| folly.