The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-05-10

The first paper money issued on
this continent with public backing
was printed in 1890 to pay Massa-
chusettS soldiers who had taken part
in an expedition against Canada
! The next 20 years were spent trying
to sustain the value of this issue
/ Ninety years were spent trying to
stop the flood of paper money that
/ followed this small beginning.
Even in 1890 the soldiers and
statesmen might have foreseen the
result. They had watched the
steady depreciation of Wampum over
period of so years. Wampum was
legal tender in the colonies as long
as Indians. fashioning it by hand
out of periwinkle and clam shells,
could only make the equivalent of
few pence in a day When settlers
increased the output by using iron
implements. the situation changed,
Massachusetts, stopped taking wam-
pun for taxes in 1649, and in 1861
made it illegal for payment of
private debts.
others FOlIOWed sui
One by one the colonists had to
rule out tobacco, fish. whisky and
gopher tails as mediums OF eX-
change-and even musket balls.
which we're legal tender at one time
for sums under II pence.
Yet when Massachusetts, decided
to meet its bonus problem of 1890
with paper money, other colonies
followed. New Hampshire, Rhode
Island, Connecticut, New York, New
Jersey and the Carolinas issued
money to pay the expenses of Queen
| Anne's war.
Within a few years the Colonial
governments were using this
painless" fiscal plan to meet their
ordinary obligations. At first taxes
we're planned, for the purpose Of
redemption. But Colonial law
makers soon fell into the habit of
extending. year by year, the time
for redeeming the outstanding bills.
Collection of adequate taxes was
postponed.
Wanted Controlled Initiation
Massachusetts, resolved, when she
issued her first bills, that this in
fation should be controlled-that
the amount should not exceed 40
600 pounds. BY 1748 she had 2466,-
900 pounds outstanding.
AS the amount OF bills increased.
the Legislatures passed more and
more laws in the attempt to force
people to use them. They tried
fines, Imprisonment, conflscation.
The money kept on depreciating.
The more bills they issued the
more frantic were complaints of the
scarcity of money The Legislatures
tried to stop and couldn't. Politl-
cal parties were forgotten. People
lined up as debtors or creditors.
BY 1850, in Massachusetts, and
Connecticut, bills had deprecated to
9 for l. In Rhode Island they were
% for /.
A historian says of that period:
Every honest man not in debt lost
about one half his personal estate"
"A widow who had an income
of 3 pounds found by 1748 that this
was reduced to about one-eighth its
original value"
Triumph for Constitution
BY the end of 1779 the Continental
Congress had issued S241 100000 III
bills of credit and the states had is
sued 100000, 900. BY 1871, dol
lar in paper was worth less than
2 cents in coin. A little later, bar
Der shops were being papered with
dollars, dresses were being made Of
them.
A showdown came in formation
of the Constitution. Provisions we're
inserted almost unanimously. deny
ing states the right to issue bills
of credit. and then by states to D.
the Federal government was forbid
den to do the same thing.
A study of the votes on initiation
in the various states shows that the
friends Of paper money were uni
formly against ratifying the Con-
stitution. The triumph of the Con-
stitution was a Reputation of q
ceYtllrv's exnerin1e0t with ma Der