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In the course of her career as colony, province and state, Massachusetts, in the effort to fill her treasury by other than ordinary means, has had two calamitous episodes, each caused by the emission of bills of public credit. The first of these was inaugurated during the administration of affairs by the temporary government organized after the overthrow of Andros, and was continued in the days of the province for a period amounting altogether to a little over half a century. When Hutchinson and his followers, in 1749, were able, by a lucky chance, to secure a resumption of specie payments, through the appropriation for that purpose of the fund allowed by the British government for the reimbursement of the provincial expenditures in the Louisburg expedition, there were but few business men living who had seen a metallic currency in circulation in New England, and there must have been a great many tradesmen to whom coined silver was but an object of idle curiosity.

The return to a specie basis, while it placed in the hands of the people enough silver-when combined with the additional coin let loose by merchants-to meet the needs of ordinary trade, carried with it inevitably, through its disarrangement of the circulating medium, the impending disadvantage of an empty treasury. This was met, when it occurred, by a recurrence to the policy of borrowing from the people on short terms, a method which had been established in the days of the colony. The process then resorted to was continued from year to year until May, 1775, when the printing-press was again made use of to supply the treasury. The special subject which I have selected for our consideration today-Emergent TreasurySupply in Massachusetts in Early Days-leads up to and would naturally include the transition to the methods employed after the establishment of the Commonwealth, but the limits necessarily imposed upon a paper of this sort preclude the pursuit of the topic beyond the retirement of the State's quota of the continental bills and the emission of state notes in place of the same, on the basis of forty for one, which was provided for by the General Assembly in May, 1780.

The experience had been as I have indicated; first, nearly sixty years of borrowing, then sixty years of emitting denominational currency, then twenty-five years of borrowing. Following this came a little over two years of dependence upon bills of public credit, after which the State settled again upon the policy of borrowing, on interestbearing notes.

I have elsewhere described in great detail the features of the paper-craze, through which our forefathers passed in the first half of the eighteenth century. In what I have to say today I shall not trespass upon that ground more than is necessary to illustrate my topic, but the development of the facts connected with the emission of bills of public credit and treasurer's notes, for the supply of the State treasury, from 1775 to 1780, will enable me to round out the story of the participation of Massachusetts in attempts to supply a denominational currency based solely upon government credit, down to the establishment of the Commonwealth.

It is true that the legislation with reference to the circulating medium from the days of "Corn-Money" to the era of “Dollars” has been collated by Felt' in his “Massachusetts Currency," and further that Mr. Charles H. J. Douglass' has in his “Financial History of Massachusetts” brought together the facts relating to the special subject under consideration and has also analyzed the colonial and provincial laws bearing thereon, thus smoothing the path for successors in this work and relieving them from prolonged study. Moreover, I myself, in the “Confiscation of John Chandler's Estate," was compelled to devote a chapter to the consideration of the emissions of the revolutionary currency of the State, 1775 to 1778, in the vain hope of determining in "sterling," the various values assigned to Chandler's estate at different times in terms of “lawful money.” My approach to the subject at that time, was, however, from a special point of view, and much was left to be said in order to complete the story of the currency emissions by Massachusetts. I trust, therefore, that I shall be able to make such use of the material at my command as to avoid the charge that the subject is too hackneyed for our consideration. The field is so important that pre-emption cannot be tolerated and so wide that it cannot be exhaustively covered by any two or three writers.

1 An Historical Account of Massachusetts Currency, by Joseph B. Felt.


When the group of colonists who bore with them the charter of the company arrived in Massachusetts and set up a local government under that instrument, they were necessarily compelled to meet the question, How should that government be supported? Taxation through the medium of the general court and the towns was the answer given, and in this solution of the question the settlers acquiesced. Then, as now, there were times when the treasury was empty, and then, as now, the government met outstanding obligations by treasury notes or by directly borrowing from those who were able to come to the rescue of the government credit.

1 Studies in History, Economics and Public Land, Columbia College, Vol. I., No. 4.

While we have no record of any such proceedings in the first decade of the government, we nevertheless find that one of the duties prescribed for the Auditor-General in 1645 was to "examine all notes, bills and accompts upon woh the Country is to make payment or satisfaccon to any pson."1

We might, perhaps, doubt whether the word "notes" actually referred to obligations given by the treasurer for money loaned or in settlement of debts incurred, were it not that entries in the records, shortly after the date of the Act quoted from, fully justify the proposition that the treasurer was in the habit at that time of supplying the treasury, and of meeting outstanding obligations of the government, in this manner. Thus at a session of the Court in November, 1646, we find the following entry:

“Whereas, it appeares by a note, und' ye Treasurers hand, yt there is due to Rich'd Saltonstall, Esq", nyne pound, pt of a debt due to Si Rich: Saltonstall for añunition, &c, & whereas he affirmes (wch we believe) yo he disbursed for ye Country, a good time since, some oth? monyes, ye C'u'te ord's hee shall have tenn pounds paid, in a small peece of ordinance (to be valued by ye Survey Gen",) he rends ye overplus (if any be) in ready mony."

It was at this session that the general tax act was brought into shape and the system for the assessment and apportionment of taxes for the general government which . prevailed during the days of the colony was inaugurated. The rates, even, were fixed, which were to govern from year to year—a poll tax of one shilling and eightpence per person and a tax on real and personal estate of one

1 Mass. Colonial Records, Vol. III., p. 54.
a Ibid., Vol. II., p. 165. See also Vol. III., p. 83.

3 Ibid., Vol. II., p. 173. Also recorded in Vol. III., p. 88; Colonial Laws, 1660 Ed., p. 14; Colonial Laws, 1672 Ed., p. 23.

penny in every twenty shillings of assessed value. The system prevailed and the "rate" remained the same, during the days of the colony, but as the functions of the government were magnified the treasurer was ordered to assess two rates or three rates, as the case might be, and during the Indian wars the assessment rose as high as ten of the rates fixed in 1646.

Succeeding the entry of the tax act in the record, the following illustration of the method of raising emergent supplies occurs:

“It is ord'ed, yt such Monyes as have been borrowed of divise men by yo Coʻte are to be & shalbe, repaid y", by ye first of ye 2d Mo next, in mon', beav", or Wheate at 3. 8d p bushell, & wtb all, yt yo Treasurer may engage himselfe for satisfaction accordingly."

With the growth of the colony, accompanied as it was with increased expenditures and an enlarged field of operation for the treasurer, we find that such items as the payment of a debt of nine pounds with a piece of ordinance, if such incidents continued to occur, are eliminated from the records and as is natural, we discover some evidence of greater formality in effecting loans than the mere issuance from time to time by the treasurer of his notes. In August, 1661, the borrowing was put in the hands of a committee of the general court and the treasurer was authorized “to engage in the name of the Court for theire repayment thereof, wtb due allowance for the same, to the satisfaction of such gent" as shall make supplyes thereof in moneyes, here & in England, for the occasions aforešd.” In December of that year the same course was followed, the action of the committee being at that date "confirmed and allowed" in advance, and the treasurer ordered to "engage for the same."

In August, 1664, the treasurer was authorized to borrow

1 Mass. Colonial Rocords, Vol. V., p. 81. * Ibid., Vol. II., p. 175. Ibid., Vol. IV., Pt. 2, p. 32. Ibid., p. 40.

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