Early New York Paper Currency.

I.

THE EARLY CURRENCY OF AMERICA.

The representative of currency used in America
during the earlier period of colonization consisted
of peltry and wampum.¹ The former was offered
in almost unlimited quantities; the latter, called
also zewan by the Dutch, held an arbitrary value
for many years.² Both were repeatedly recognised
as currency.³ The necessity for coin only partially

¹Said to be derived from wampi, signifying in Massachusetts
Indian language—*white*. It was strung, and sometimes formed
into belts.—*Encyc. Amer.*

²Its manufacture by the natives was necessarily rude. They commonly used the oyster and clam shell. The beads were bored with sharp stones, and strung upon sinews. The dark bead, less than an inch in length and bored longitudinally, was of the greatest value and more highly esteemed than European gold and silver. The Dutch somewhat improved it and made use of white and blue beads, which were manufactured from the sea conch and muscle. A string one fathom long was valued at four guilders, or one dollar sixty-six and one half cents of our currency—Munsell's *Annals*.

³ *N. Y. Col. Docs.*, 1, 87, 303; 11, 594, 697, 703. *Albany City Records*, Sept. 23, 1686, etc.

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existed, and its circulation in New Netherland, at
least during the administration of the West India
Company, was limited. Indeed a small amount
was sufficient, as the general dealings of the com-
munity were by trade or barter. Beaver was for a
long time the standard. Wampum never had a
fixed value,¹ but varied from four to eight black
beads for a stiver. The repeated complaints on the
subject of its fluctuation seem to have been un-
heeded by the Directors of the Company, who would
have the colonists consider it as good as bullion,
yet would receive only beaver skins in payment of
duties and taxes,² while supplies could be obtained
only for beaver or silver.

That there was however at an early date a supposed
scarcity of coin, appears from the fact that in 1642
the Council petitioned the Company to raise the
value of money in order to prevent its exportation
to foreign countries;³ and at a later period Governor
Stuyvesant endeavored to introduce a specie cur-
rency, and as one expedient proposed in imitation
of New England, to establish a mint at New Am-
sterdam.⁴ In 1673 there was little or no certain
coin. Wampum passed for current payment, and
it continued to constitute the currency of the com-

¹ *Col. Docs.*, III, 303.

² O'Callaghan's *New Netherland*.

³ *Col. Docs.*, I, 203.

⁴ *Manuscript Records*, Secretary’s Office, IV, 387, 388.

EARLY PAPER CURRENCY.

mon or laboring people long after the colony ceased
to belong to the Dutch.¹

In most of the other provinces a barter trade was
carried on similar to that of New Netherland.
Wampum was introduced into New England by
Isaac De Razier in 1627, and passed at the rate of
5s. per fathom. The General Court ordered in
1643, "that wampumpeag should pass current in
the payment of debts to the amount of forty shill-
ings." Besides this, English and Dutch coin, Indian
corn, wheat, rye, barley, peas, live stock, beaver,
bulletts and gunpowder, constituted its currency
during the early days of that colony.²

Virginia in 1618 made the following enactment—
"All goods shall be sold at an advance of twenty-five
per cent, and tobacco taken in payment at three
shillings per pound, at not more or less, on the
penalty of three years servitude to the colony."³—
Other colonies at this date had simiar regulations;

¹In 1683, the schoolmaster in Flatbush was paid his salary in wheat, "wampum value," and ten years later, the ferriage for each single person from New York to Brooklyn was eight stivers in wampum, or a silver two pence. — *O'Callaghan*.

²In Massachusetts (1631), the following enactment was made: "It is ordered that corn shall passe for payment of all debts at the usual rate it is solde for, except money or beaver be expressly named." Again in 1635—"It is ordered, that hereafter farthings shall not passe for currant pay. It is likewise ordered, that muskett bullets of a full boare shall passe currently for a farthing a peece, provided that noe man be compelled to take above 12d. att a tyme of them." — *Mass. Records*.

³Holmes's *Amer. Annals*.

EARLY PAPER CURRENCY.

II.

THE INTRODUCTION OF PAPER MONEY INTO AMERICA.

The introduction of paper money into America, as a medium of exchange, was made in Massachusetts. Prior to the year 1652 bills passed current in the payment of debts.¹ In this year, the subject was discussed in the General Court with the view of increasing the facilities of trade. No enactment followed, but we find an approximation to it in 1675 in the following record: "For the prevention of the charge and trouble of transportation of the rates to be levied, to the treasurer of the county, as also matter of convenience therein appearing, it is ordered that bills for wages, horses, provisions, &c., being regularly passed to the sayd treasurer, the Treasurer upon the desire of persons concerned shall repass bills to the constables of such townes, where sums are due upon the aforesaid accounts."²

In 1686, during the presidential government of New England, permission was granted to John Blackwell of Boston, and others, residents of Eng-

¹Felt's *Account of Massachusetts Currency*.

² *Massachusetts Records*.

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EARLY PAPER CURRENCY.

land as well as of this country, to commence the
issuing of bank-bills "on the security of real and
personal estate and imperishable merchandize."
How far and how long the operations of this corpo-
ration were carried on, is not precisely known.

It was in 1690 that the first issue of paper money
was made by an American colony. New England
and New York undertook to drive the French from
Canada. The expedition failing, the soldiers re-
turned sooner than was expected, and were clamor-
ous for their pay, and being unwilling to await the
time necessary to raise a revenue by a direct tax,
the authorities of Massachusetts resolved in the
emergency to issue a paper currency, and thereupon
directed a committee to prepare immediately bills
to the amount of £7,000.¹ Many precautions were
made in order to preserve their value, but deprecia-
ation speedily followed their issue. The govern-
ment received them at par in payment of taxes, and
added five per cent to the principal, so that they
soon became objects of speculation.

The next colony which issued paper money was
Carolina, the necessity for which grew out of an
expedition against St. Augustine in 1702. Bills of
credit to the amount of £6,000 were issued, to be
cancelled in three years, by a duty laid upon liquors,
skins and furs. In 1705 or 1706 a paper money act

¹According to Hutchinson these bills were issued in notes from 2s. to £10. Mr. Felt says from 5s. to £5.

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EARLY PAPER CURRENCY.

### III.
THE PAPER MONEY OF NEW YORK.

New Netherland was surrendered to the English in 1664, the Duke of York having obtained a grant of the province from King Charles II. The Dutch reconquered the country, but it was eventually restored to the English in 1674, when the Duke obtained a new grant of the colony of New York. The government was composed of the governor and council appointed by the king, and subsequently of the assembly chosen by the people. In it was vested the authority to make laws, subject to the approval of the proprietary. The General Assembly convened for the first time in 1682.

Difficulties in regard to the currency of the province existed at an early date. The coins of Holland, France, Germany, Spain, England and a remnant of the Massachusetts coinage carried with them each the distinct valuations made in their respective countries. As has already been stated, wam-pum circulated for a long time as the colonial currency, but it gradually disappeared as trade and prosperity increased, when the revenue for the support of government was derived from crown rents,

EARLY PAPER CURRENCY.

forfeitures, taxation,¹ duties, the emission of paper money and lotteries.

After the first reduction of New Amsterdam, the necessary means to defend it against the Dutch and Indians exhausted the money and credit of the colony.² Trade became much reduced, and supplies from England were protracted and small. Even the private resources of the governor were exhausted. He complained that "he was utterly ruined in his small estate and credit." During the administration of Gov. Andros frequent efforts were made to increase the supply of money, which was represented as insufficient for an ordinary commerce. The importation of British brass farthings, restamping Spanish pieces-of-eight,³ the special coinage of a few thousand pounds for circulation in the province, were plans severally suggested, neither of which received material encouragement. Gov. Dongan, and subsequently the Earl of Bellomont,⁴ recommended the establishment of a mint, which suggestion the duke's commissioners signified their will-

¹The first internal tax in New York (New Netherland) was levied in 1644, and was for the purpose of meeting the expense incurred by the Indian wars.

²In raising 300 men for the protection of the frontier, it was found necessary to require each county to raise, pay and maintain their own men, according to the proportion then agreed upon.

³1675.

⁴Aug. 27, 1684 and 1700.

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EARLY PAPER CURRENCY.

ingness to consider, but no further notice appears
to have been taken of it.

The low state of the currency it was thought,
arose from the fact that most of the foreign trade
came through Boston and other places of the East,
which tended to draw in that direction the money
as well as produce. In view of such facts the mer-
chants of New York petitioned the general assem-
bly for enactments which it was imagined would
increase the supply of currency. It was, in fact,
injudicious legislation which had already removed
the currency from the province; it was now proposed
that no wheat should be exported from the province
save only for the Madeira Islands; that the ten per
cent. formerly laid upon all European goods that
did not come directly from England hither, over
and above the two per cent. already imposed, should
again be required.

The instructions from the government were strin-
gent and reiterated that no alteration should be
made in the value of current coin. It was neverthe-
less subject to constant change, for we find that in
1695, the difference between New York and ster-
ling money was about one fifth, and in 1700 about
one quarter. Difficulties were increased too by the
diverse values held in the several colonies. Pieces
of eight of the value of 6s. passing in New York
for 6s. 9d., in New Jersey for 7s. 8d., in Maryland
for 4s. 6d., and in Virginia and Carolina for 5s. To
relieve these embarrassments the queen in 1705,

EARLY PAPER CURRENCY.

issued a proclamation settling and ascertaining the current rates of coin in the plantations.

Against this the merchants of New York re-
monstrated on the ground of the frauds committed
under it, inasmuch as in some of the provinces the
proclamation was duly published, but no notice
taken of it. Lord Cornbury was induced to take
the responsibility of suspending it. The assembly
afterwards assumed the right to settle the value of
coin in a manner to meet the view of the colonists,
for which proceeding it was censured by the gov-
ernment.

A few years later (1708) the legislature passed
an act regulating and preventing the corruption of
the current coin, which, although favorably com-
mended by Lord Cornbury, was reported against
by the lords of trade on the ground that coin was
raised to a higher rate than was allowed by the act
of parliament and the proclamation. It was sub-
sequently vetoed, and the veto published in New
York and New Jersey. The legislature, however,
disregarded the veto, and resolved to pass no bill
for money for the support of government unless at
the rates contained in the vetoed bill. Governor
Hunter dissolved the house several times, but to
no purpose; both he and all the government officers
remained without support for a number of years.
He was finally under the necessity of conceding,
and the assembly appointed a treasurer to receive
and pay all money granted to the king and the

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EARLY PAPER CURRENCY.

province, in place of the king's receiver general. A few years later, parliament having passed an act regulating, on a uniform scale, the rates of foreign coin in the plantations, the general assembly re-monstrated on the ground that if money passed at the same rates here as at the West Indies, it would not be worth the merchant's while to bring the money, but rather the produce of those islands in return for our produce; and as our principal com-merce was to those parts, there would not be brought back money enough to support either the government or commerce. It was claimed that the effect of both the proclamation and the act of par-lliament would be to establish in the colonies a depreciated currency, and drive all the gold and silver coin to England, and it was urged, therefore, that assent should be given to an act which the assembly had recently passed, regulating the cur-rency of the colony. This act provided that Spanish pieces should not pass at less than eight shillings per oz., troy—whereas the proportion in the act of parliament was 6s. 10d. In the absence of the royal assent, the governor, as requested, ordered the exe-cution of the latter (New York) act.¹

As has already been stated, New England and
New York undertook, at the instance of the British
government, to drive the French from Canada, cir-cular letters having been addressed by the officer of

¹ It was subsequently reported against by the board of trade,
and vetoed by the queen.

EARLY PAPER CURRENCY.

the crown to the governors of the American colonies, directing them to assist in carrying on the expedition. A proposition was immediately passed upon in the house of assembly of New York¹ to raise 487 men as her quota for this purpose. It was enacted that a tax of £6,000 should be levied, but as funds were needed immediately, another act followed² enforcing the currency of bills of credit to the amount of £5,000. This was the first paper currency act passed in New York.

Although New England, New Jersey, and Pennsylvania joined New York in this operation against Canada, the latter contributed more than any of the other colonies. In the New Jersey and Pennsylvania legislatures the Quakers voted against the appropriations, and in the former colony defeated them, but subsequently the bill was reconsidered and passed. The expense incurred by New York was above £20,000.³ Other enactments creating bills of credit for the same object, followed the one already mentioned. In November, 1709,⁴ two were passed, one for the currency of bills to the amount of £4,000, another for ten thousand ounces of plate, or fourteen thousand five hundred and forty-five

¹ May 25, 1709.

² June 8, 1709.

³ Smith's History.

⁴ November 1st and 12th, 1709.

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EARLY PAPER CURRENCY.

Lyon dollars¹ (equal to £4,000). These bills were for a short time received by the treasurer at their value with an advance of 2½ per cent. from the date of the bill to the day the treasurer received them. The regulation, as had been the case in Massachusetts, induced many to hold them on account of the accumulating interest; but at the next session an act was passed forbidding the treasurer or any other person paying or receiving any interest on their account. The bills then issued, as well as those emitted subsequently, were cancelled as they were paid in. To counterfeit them was felony without benefit of clergy.

Although the expedition against Canada was unsuccessful, a few operations in Nova Scotia and Newfoundland which had resulted favorably, stimulated a renewed attack against the former. Assistance arrived from England and Flanders. The general assembly convened, and the subject was brought before it. Some dissatisfaction arose as to the large proportion required of New York, but in a few days² an act was passed to raise a force of 600 men in connection with 360 from Connecticut, 360 from the Jerseys, and 240 from Pennsylvania. A new issue of bills of credit was ordered to the amount of 25,000 ounces of plate, or £10,000, to

¹ The value of Lyon dollars in 1711 was 13 pwt. 18 gr.; in 1720, 15 pwt.

² July 26, 1711.

EARLY PAPER CURRENCY.

defray the expense. They were to be current not
longer than eight years. Every collector of taxes
was required to indorse on the bill the date of pay-
ment, after which time the bill so endorsed was no
longer current.

Owing to bad management, and the wreck of a
number of vessels, failure ensued, the troops re-
turning home without even an encounter.

The state of affairs in New York at this time,
was by no means harmonious. Discouraged by
recent disasters, the ill feeling between the governor,
council, and assembly, manifested itself on several
occasions. The province was largely indebted to
individuals for money and effects, advanced for the
service of the army. Provision had been made by
former governors for the payment of a great part
of these claims, out of the funds which had been
from time to time raised for the support of govern-
ment. Warrants had been signed and issued, but
the sums having been misapplied, the debts re-
mained upon the colony: the government credit
was low, and the inhabitants quite discouraged.

In order to relieve difficulties, which were daily
becoming more complicated, an act was passed in
1712, under which commissioners were appointed
to examine and state the several debts claimed to
be due from the government. In order to dis-
charge the debts thus ascertained, another act was
passed in 1713, laying an excise on all strong