THE

FINANCIAL HISTORY OF MASSACHUSETTS

FROM THE ORGANIZATION OF THE MASSACHUSETTS BAY COMPANY TO THE AMERICAN REVOLUTION.

INTRODUCTION.

§1. Massachusetts in history.

The figure of Massachusetts is no unfamiliar one upon the stage of history. She has in fact occupied a prominent position there on many important occasions; and if her audience have not always been able to express an unqualified approval of her choice of parts, they have at least not failed to be impressed with the wide range of her histrionic capabilities, or with the intensity with which she impersonates the character of the hour. It is generally conceded that in the varied and trying rôles of persecutor of the heretic and champion of the slave, of punisher of witchcraft at home and defier of oppression abroad, Massachusetts has had few equals and no superiors. But there is another rôle in which she made her début at an early day, for the adequate sustaining of which, though it is far less spectacular than any of those above mentioned, unremitting rehearsal and many public performances during a period of over two hundred and fifty years have scarcely sufficed to prepare this venerable histrionic dame. The performance of Massachusetts as public financier demands our attention.

§2. Periods of Financial History.

The American revolution marks a natural division of the history of Massachusetts into two periods, each with financial characteristics distinct from those of the other:-the period of her dependency upon the British crown, and the period of her membership in the American union. The first of these periods again divides itself into two others, corresponding to the respective lives of the colonial and provincial charters; while the second, though shaken by no such violent political tempests as served to break up the previous history of the commonwealth into epochs, is marked near its middle by the beginning of that great and varied material development which, during the last half century, has completely changed the character of the science of finance in all civilized countries. We thus have four well-defined periods of financial history. The present monograph is devoted to the first two of these periods, comprising the larger one of the dependency of the commonwealth upon the British crown.

BOOK I.

THE COLONY OF MASSACHUSETTS BAY.

§3. Beginnings of Massachusetts.

Whether the commowealth of Massachusetts is to be regarded as having had its real origin at the landing of the Pilgrims at Cape Cod in 1620, or at the moment when the Company of the Massachusetts Bay purchased of the Council at Plymouth the title to the vast and vaguely defined territory within the bounds of which the present state of Massachusetts lies, or on the granting of a charter by Charles II. to the Governor and Company of the Massachusetts Bay in 1628, or on the arrival of Winthrop out of England with the charter itself in 1630, is a question in constitutional law rather than in finance. If any of the above views other than the last be taken, we have, prior to the beginning of Winthrop's adminministration, a period properly embraced within the history of the commonwealth, presenting a body of fiscal material and suggesting lines of financial investigation which offer to the student of finance a high degree of interest. The present dis

1On November 3rd, 1620, King James signed a patent by which the adventurers to the northern colony of Virginia between forty and forty-eight degrees north latitude, were incorporated as the Council Established at Plymouth in the County of Devon, for the Planting, Ruling, Ordering and Governing of New England in America. This is the great civil basis of the future patents and plantations of the country. See the text of the patent in Hazard's Collection of State Papers, I., 103. On March 19th, 1627, the Council at Plymouth sold to some knights and gentlemen about Dorchester that part of their patent which lay between the Charles and Merimack rivers. It was to these persons, or to their successors, that King Charles, in 1628, granted a charter incorporating them into a body politic under the style of the Governor and Company of the Massachusetts Bay in New England.

cussion begins with some account of the Massachusetts company.

§4. The Massachusetts Company.

Concerning the original form of organization of the Massachusetts Bay Company, little information is known to exist. It was probably similar to that of the company who about that time settled at New Plymouth, and who, as we know from the testimony of Capt. John Smith, although they had a capital stock of at least £7000, were not a corporation, but knit together by voluntary combination. The Plymouth Company had a president and a treasurer who were chosen annually by the majority and who ordered the affairs of the courts and meetings and undertook all ordinary business, though in more weighty affairs the assent of the whole company was required. No records of the colony that was sent over by the Massachusetts Company, belonging to Endicott's administration, have been preserved; but Governor Bradford, of New Plymouth, in a letter written June 9th, 1628, mentions a sort of voluntary tax by which various individuals and places in the Bay assessed themselves in certain sums bearing no common proportion to their respective means, and amounting to £12 75.1

We have record also of an appeal by the officers of the Massachusetts Company, as early as June 17th, 1629,' while the charter and government were still in England, to the members as individuals to advance to the company such sums as they might be able to spare, toward extinguishing a debt of the company, receiving therefor receipts under the company seal. In this and subsequent similar acts we have the first steps in that development of enforced contribution, or taxation, out of voluntary contribution, which the financial history

1 Plymouth, £2 10s; Naumkeak, £1 10s; Pascataquack, £2 10s; Mr. Jeffrey and Mr. Burslem, £2; Nastascot, 1 10s; Mr. Thomson, 15s; Mr. Blackston, 125; Edward Hilton, 1. Total, £12 75.

2 Massachusetts Records, I., 47.

of every organized society presents. It appears from a letter of the company in London to Endicott, May 28th, 1629, that they required of all emigrants hither, who received lands but made no payment to the common stock, a sort of service tax, which, exacting of each colonist and his heirs who held landed estates in this manner a specified number of days' labor each year, bore some resemblance to tenure of socage in England. The income to the government from this source was in reality less a tax than it was the price of a portion of the public domain, alienated on terms which the purchaser could have declined, had he so elected. It is probable that the arrangement was soon abandoned; the above reference to it being the only one thus far discovered.

§ 5. The Genesis of the Taxing Power.

The probability arising from the foregoing facts that the Massachusetts Company lacked altogether the power generally vested in stock companies of levying assessments upon their stockholders is rendered more certain by the fact that not only on the occasion above mentioned, when the company was £1500 behind in its accounts, but also in the following November, when it was more than £3000 in debt, no record has been found of any proposition to levy an assessment upon the members, although on both of these occasions various extraordinary measures were proposed for raising funds. If the company itself had no power of assessment, that is of taxation, it is clear that it could grant no such power to a colony organized among its members and sent out under its direction.

1 An exhaustive account of the fortunes of the original shareholders of the Massachusetts Company is yet to be written, Mr. Samuel F. Haven's short introduction to the reprint of the records of the company for the first thirteen years, contained in Vol. III. of the Transactions of the American Antiquarian Society, being chiefly devoted to an account of the shareholders themselves. Much ma. terial for this interesting chapter of the financial history of Massachusetts exists, though in a chirography likely to try severely the patience of the investigator, in Vol. 100 of Felt's collection of Massachusetts Archives.