obtain, that on the balance of this extensive commerce, there is now due from the colonies in North America to the said city only, 2,000,oool. sterling, and upwards; and that, by the direct commerce with the colonies, and the circuitous trade thereon depending, some thousands of ships and vessels are employed, and many thousands of seamen are bred and maintained, thereby encreasing the naval strength and power of Great Britain; and that in the year 1765, there was a great stagnation of the commerce between Great Britain and her colonies, in consequence of an Act for granting and applying certain stamp-duties and other duties, in the British colonies and plantations in America, by which the merchants trading to North America, and the artificers employed in the various manufactures consumed in those countries, were subjected to many hardships; and that, in the following year, the said Act was repealed, under an express declaration of the legislature, that the continuance of the said Act would be attended with many inconveniences and might be productive of consequences greatly detrimental to the commercial interests of these kingdoms; upon which repeal, the trade to the British colonies immediately resumed its former flourishing state; and that in the year 1767, an Act passed for granting certain duties in the British colonies and plantations in America, which imposed certain duties, to be paid in America, on tea, glass, red and white lead, painters' colours, paper, paste-board, mill-board, and scale-board, when the commerce with the colonies was again interrupted; and that in the year 1770, such parts of the said Act as imposed duties on glass, red and white lead, painters' colours, paper, paste-board, mill-board, and scaleboard, were repealed, when the trade to America soon revived, excepting the article of tea, on which a duty was continued, to be demanded on its importation into America, whereby that branch of our commerce was nearly lost; and that, in the year 1773, an Act passed to allow a drawback of the duties of customs on the exportation of tea to his Majesty's colonies or plantations in America, and to empower the commissioners of the Treasury to grant licenses to the East India Company to export tea, duty free; and by the operations of those and other laws, the minds of his Majesty's subjects in the British colonies have been greatly disquieted, a total stop is now put to the export trade with the greatest and the most important part of North America, the public revenue is threatened with a large and fatal diminution, the petitioners with grievous distress, and thousands of industrious artificers and manufacturers with utter ruin; under these alarming circumstances, the petitioners receive no small comfort, from a per

suasion that the representatives of the people, newly delegated to the most important of all trusts, will take the whole of these weighty matters into their most serious consideration; and therefore praying the House, that they will enter into a full and immediate examination of that system of commercial policy which was formerly adopted, and uniformly maintained to the happiness, and advantage of both countries, and will apply such healing remedies as can alone restore and establish the commerce between Great Britain and her colonies on a permanent foundation; and that the petitioners may be heard by themselves, or agents, in support of the said petition."

F. Petition of West India Planters for Reconciliation, 17751

The effects of the non-importation agreements of the colonists were felt not only by London merchants, but also by West India planters, who were deprived at the same time of needed supplies and of a market for their products. They also brought pressure to bear upon Parliament to repeal the obnoxious legislation which had led to this situation.

Petition of the West India Planters to the Commons respecting the American Non-Importation Agreement. Feb. 2 [1775]. A Petition of the planters of his Majesty's sugar colonies residing in Great Britain, and of the merchants of London trading to the said colonies, was presented to the House, and read; setting forth,

"That the petitioners are exceedingly alarmed at an Agreement and Association entered into, by the Congress held at Philadelphia in North America, on the 5th of Sept. 1774, whereby the members thereof agreed and associated, for themselves and the inhabitants of the several provinces lying between Nova Scotia and Georgia, that from and after the 1st of Sept. 1774, they would not import into British America any melasses, syrups, paneles, coffee, or piemento, from the British plantations; and that after the 10th of Sept. 1775, if the Acts and the parts of the Acts of the British parliament therein mentioned, are not repealed, they would not directly, or indirectly, import any merchandize or commodity whatsoever to the West Indies; and representing to the House that the British property in the West India islands amounts to upwards of 30 millions sterling; and that a further property of many millions is employed in the commerce created by the said islands, a commerce comprehending Africa, the East Indies and Europe; and that the whole profits and produce of these

1 Parliamentary History of England. By Hansard (London, 1813), XVIII, 219-221.

capitals ultimately center in Great Britain, and add to the national wealth, while the navigation necessary to all its branches, establishes a strength which wealth can neither purchase nor balance; and that the sugar plantations in the West Indies are subject to a greater variety of contingencies than many other species of property, from their necessary dependence on external support; and that therefore, should any interruption happen in the general system of their commerce, the great national stock thus vested and employed must become unprofitable and precarious; and that the profits arising from the present state of the said islands, and that are likely to arise from their future improvement, in a great measure depend on a free and reciprocal intercourse between them and the several provinces of North America, from whence they are furnished with provisions and other supplies absolutely necessary for their support and the maintenance of their plantations; and that the scarcity and high price, in Great Britain and other parts of Europe, of those articles of indispensible necessity which they now derive from the middle colonies of America, and the inadequate population in some parts of that continent, with the distance, danger, and uncertainty, of the navigation from others, forbid the petitioners to hope for a supply in any degree proportionate to their wants; and that, if the first part of the said Agreement and Association for a non-importation hath taken place, and shall be continued, the same will be highly detrimental to the sugar colonies; and that, if the second part of the said Agreement and Association for a non-exportation shall be carried into execution, which the petitioners do firmly believe will happen, unless the harmony that subsisted a few years ago between this kingdom and the provinces of America, to the infinite advantage of both, be restored, the islands, which are supplied with most of their subsistence from thence, will be reduced to the utmost distress, and the trade between all the islands and this kingdom will of course be obstructed, to the diminution of the public revenue, to the extreme injury of a great number of planters, and to the great prejudice of the merchants, not only by the said obstruction, but also by the delay of payment of the principal and interest of an immense debt due from the former to the latter; and therefore praying the House, to take into their most serious consideration that great political system of the colonies heretofore so very beneficial to the mother country and her dependencies, and adopt such measures as to them shall seem meet, to prevent the evils with which the petitioners are threatened, and to preserve the intercourse between the West India islands and the northern colonies, to the

general harmony and lasting benefit of the whole British empire; and that they may be heard, by themselves, their agents, or counsel, in support of their Petition."

Ordered to be referred to the consideration of the committee on the Petition of the merchants of London, concerned in the commerce of North America.

III. CONTINENTAL PAPER MONEY

A. Continental Paper Money, 1775-17801

When the Revolution began the Continental Congress had no authority to levy taxes, nor power to borrow money by issuing bonds. It was therefore compelled to resort to the issue of paper money as practically the only financial resource at their command. Under the pressure of their necessities, however, they issued too much, and as soon as it was overissued it began to depreciate, until finally it became worthless and was ultimately repudiated. A defense by Franklin of the use of this continental currency is here given.

Much conversation having arisen lately on the subject of this money, and few persons being well acquainted with the nature of it, you may possibly oblige many of your readers by the following account of it.

When Great Britain commenced the present war upon the colonies, they had neither arms nor ammunition, nor money to purchase them or to pay soldiers. The new government had not immediately the consistence necessary for collecting heavy taxes; nor would taxes that could be raised within the year during peace, have been sufficient for a year's expense in time of war; they therefore printed a quantity of paper bills, each expressing to be of the value of a certain number of Spanish dollars, from one to thirty; with these they paid, clothed, and fed their troops, fitted out ships, and supported the war during five years against one of the most powerful nations of Europe.

The paper thus issued, passed current in all the internal commerce of the United States at par with silver during the first year; supplying the place of the gold and silver formerly current, but which was sent out of the country to purchase arms, &c., or to defray expenses of the army in Canada; but the great number of troops necessary to be kept on foot to defend a coast of near five hundred leagues in length, from an enemy, who, being masters at sea, could land troops where

1 Of the Paper Money of the United States of America. By Benjamin Franklin. In Works (Sparks edition, Boston, 1840), II, 421-4.

they pleased, occasioned such a demand for money, and such frequent additional emissions of new bills, that the quantity became much greater than was wanted for the purposes of commerce; and, the commerce being diminished by the war, the surplus quantity of cash was by that means also proportionately augmented.

It has been long and often observed, that when the current money of a country is augmented beyond the occasions for money, as a medium of commerce, its value as money diminishes.

Paper money not being easily received out of the country that makes it, if the quantity becomes excessive, the depreciation is quicker and greater.

Thus the excessive quantities which necessity obliged the Americans to issue for continuing the war, occasioned a depreciation of value, which, commencing towards the end of 1776, has gone on augmenting, till at the beginning of the present year, fifty, sixty, and as far as seventy dollars in paper were reckoned not more than equal to one dollar in silver, and the prices of all things rose in proportion. . . .

The general effect of the depreciation among the inhabitants of the States has been this, that it has operated as a gradual tax upon them, their business has been done and paid for by the paper money, and every man has paid his share of the tax according to the time he retained any of the money in his hands, and to the depreciation within that time. Thus it has proved a tax on money, a kind of property very difficult to be taxed in any other mode; and it has fallen more equally than many other taxes, as those people paid most, who, being richest, had most money passing through their hands.

B. Depreciation of Continental Paper Money, 1775-1779

The following table of depreciation by Thomas Jefferson shows that the depreciation did not begin until the year 1777, and after $14,000,000 had been issued. After that, however, it went on rapidly as a result of the great overissue by Congress, until the last emission brought in only 2 cents for every $1.00 issued.

1 Quoted in Historical Sketches of American Paper Currency, Second Series. By Henry Phillips (Roxbury, 1866), 199.