The Caucasian. (Clinton, N.C.) 188?-1913, 1894-12-27
MIsToRY OF TEE CONTRACTION OF
CURRENCY.
BY y. 4. DCENIgG.
NO. z.

In the struggle tor a medium OF
exchange the pioneer fathers resort
ed to many e1pedients among which
was that of barter currency. As
far az possible all exchanges were
made in barter, but the question of
deferrd pa5 ments became more and
more important as business transac-
tions increased. AS a last resort
barter currency was adopted, and
various kinds of products as well as
live stock were made legal tender
for payment of debts and taxes. Of
course this method of exchange was
from the start burdensome and soon
developed into an absolute abuse.
If COWS would pay debts at certain
rating per head the poorest cows
were made currency. If wheat was
tender at certain fixed price the
poorest wheat was used, and SO it
went through the entire list of bar
ter currency. Peag money was used
concurrently with this barter cur
rency which taken in connection
with the little coin in circulation
made up a medium of exchange both
singular and inefficient. Nearly all
the specie in circulation was obtain
ed through trade with Spanish buc-
cancers with whom our forefathers
81 EN- to have been on the best of
terms. These buccaneers would
plumber a vessel of its cash in the
East, and come over to America and
purchase their supplies. In this
manner quite profitable trade was
established in many of the Colonies.
At this period, says Prof. Sum-
ner, there were four prices used in
exchange. They were ''pay," ''pay
as money" "money" and "trusting."
Pay was barter at therates fixed by
government. Money was Spanish
or New England coin, with wam-
pun for change. Pay as money"
was barter currency, at One-third
less than government rates. Trust
ing was as now, price according to
time and risk. A six-penny knife
cost II pence in pay, 8 pence in pay
as money and 6 pence in coin.
There was also mint in Massachu-
sets, which for a time turned out
small change in debased metal. In
1856 there was bank of issue start
ed somewhere near Boston. Its
history is very obscure and it soon
went out of existence. In 1890 the
Colony of Massachusetts organized
and fitted out the first expedition
against Canada, then French pro-
vince. The expenses of this expe-
dition were to have been paid out of
the spoils taken; but when it re-
turned without any booty, and the
soldiers clamored for their pay, the
Colony issued it's first paper money
to satisfy these demands. From
this time on paper money was is
sued by nearly all the Colonies.
The issuing of paper currency by
the Colonies was against the wishes
and interests of England since ii
interfered with the amount of trib.
ute received by the Mother Country,
Parliament passed act after act in g
persistent effort to deprive the Col
onies of any domestic currency and
thereby force them to sell their pro-
ducts cheap in order to buy the deal
currency of England. Laws were
passed forbidding the Spanish dollar
from passing current in order tt
break up the trade with the Spanish
buccaneers and the Indies, which
England claimed as its own. The
necessity tor currency was so great
and the evident purpose of England
so plain, that the Colonists use(
their Spanish money in defiance o:
the prohibition. Parliament forbi(
by numerous acts the issue o:
money by the Colonies and declared
such as had been issued not lega
tender. Through these and man,
other acts of repression and tyran
ny, the Colonies were hampered ant
hindered in their efforts to secure
domestic currency Of their own
Being independent of each other
with no commercial mutualities
they could not act together in an eff
fort to provide a suitable currency
Each Colony Sc ms to have adopted
a plan Of it's own. Some were fail
ures, but the greater part were
success, and to this much abused
and misrepresented currency tn
growth and vigor of the Colonie
may be attributed. Banks wer
started by many Of the Colonies
which, owing to the lack of coin
were somewhat tentative in thei
plan of operations. They were, a
a rule, called loan banks, since the.
loaned their bills on mortgage Sc
curity. This word "bank," as use'
before the Revolutionary war, mean
only a quantity Of paper money, an
not, as now, signlfying a certain
kind of business. These loan bank
were very popular and of very grea
assistance to the Colonies, which b
this time had grown to such all ex
tent as to have but little fear an
still less respect for the 80 calle'
provincial acts of Parliament.
Reference to the Colony of Penn
sylvania will be all that space will
permit.
; The money of Pennsylvania wa
both success and failure, and dc
serves special attention. 1t succeed
ed as long as it possessed the quality
Its use was compelled by the absenc
> of coin, which had been draw
away by the British trade. Coli
money, being an e1portable article
was ALWAYS a fugitiye in those color