And as there are already in all the old colonies many thousands of families that are ready to swarm, wanting more land; the richness and natural advantage of the Ohio country would draw most of them thither, were there but a tolerable prospect of a safe settlement. So that the new colonies would soon be full of people; and, from the advantage of their situation, become much more terrible to the French settlements, than those are now to us. The gaining of the back Indian trade from the French, by the navigation of the lakes, &c. would of itself greatly weaken our enemies: it being now their principal support, it seems highly probable, that in time they must be subjected to the British crown, or driven out of the country.

Such settlements may be better made now, than fifty years hence, because it is easier to settle ourselves, and thereby prevent the French settling there as they seem now to intend, than to remove them when strongly settled.

If these settlements are postponed, then more forts and stronger, and more numerous and expensive garrisons must be established to secure the country, prevent their settling, and secure our present frontiers; the charge of which may probably exceed the charge of the proposed settlements, and the advantage nothing near so great.

The fort at Oswego should likewise be strengthened, and some armed halfgallies, or other small vessels, kept there to cruise on lake Ontario, as proposed by Mr. Pownall in his paper laid before the commissioners at the Albany treaty.'

If a fort was also built at Tirondequat on lake Ontario, and a settlement made there near the lake side, where the lands are said to be good, (much better than at Oswego); the people of such settlements would help to defend both forts on any emergency.*

See his work above quoted, Vol. II. p. 234, et seq. and p. 179, et seq.

2 The whole proposal was neglected, though the French thought a considerable settlement very practicable, in order to get at the Ohio. See Governor Pownall, Vol. II. p. 236. B. V.

VOL. III.

E

REMARKS AND FACTS RELATIVE TO THE AMERICAN

PAPER-MONEY,' 1764.

[Referred to in MEMOIRS, Part III. p. 178. 4to. Ed.]

In the REPORT of the BOARD of TRADE, dated February 9, 1764, the following Reasons are given for restraining the emission of paper-bills of credit in America, as a legal tender.

1. “That it carries the gold and silver out of the province, and so ruins the country; as experience has shown, in every colony where it has been practised in any great degree.

2. "That the merchants trading to America have suffered and lost by it. 3. "That the restriction [of it] has had a beneficial effect in New England. 4. "That every medium of trade should have an intrinsic value, which papermoney has not. Gold and silver are therefore the fittest for this medium, as they are an equivalent; which paper never can be.

5. "That debtors in the assemblies make paper-money with fraudulent views. 6. "That in the middle colonies, where the credit of the paper-money has been best supported, the bills have never kept to their nominal value in circulation; but have constantly depreciated to a certain degree, whenever the quantity has been increased."

To consider these Reasons in their order; the first is,

1. "That paper-money carries the gold and silver out of the province, and so ruins the country; as experience has shown, in every colony where it has been practised in any great degree." This opinion, of its ruining the country, seems to be merely speculative, or not otherwise founded than upon misinformation in the matter of fact. The truth is, that the balance of their trade with Britain being greatly against them, the gold and silver is drawn out to pay that balance; and then the necessity of some medium of trade has induced the making of

During the war, there had been a considerable and unusual trade to America, in consequence of the great fleets and armies on foot there, and the clandestine dealings with the enemy, who were cut off from their own supplies. This made great debts. The briskness of the trade ceasing with the war, the merchants were anxious for payment; which occasioned some confusion in the colonies, and stirred up a clamor (in England) against paper-money. The board of trade, of which Lord Hilsborough was the chief, joined in this opposition to paper-money, as appears by the report. Dr. Franklin being asked to draw up an answer to their report, wrote the above. B. V.

paper-money, which could not be carried away. Thus, if carrying out all the gold and silver ruins a country, every colony was ruined before it made papermoney. But, far from being ruined by it, the colonies that have made use of paper-money, have been, and are, all in thriving condition. The debt indeed to Britain has increased, because their numbers, and of course their trade,. have increased; for all trade having always a proportion of debt outstanding, which is paid in its turn, while fresh debt is contracted, the proportion of debt naturally increases as the trade increases; but the improvement and increase of estates in the colonies has been in a greater proportion than their debt. New England, particularly, in 1696, (about the time they began the use of papermoney,) had in all its four provinces but 130 churches or congregations; in 1760 they were 530. The number of farms and buildings there is increased in proportion to the numbers of people; and the goods exported to them from England in 1750, before the restraint took place, were near five times as much as before they had paper-money. Pennsylvania, before it made any paper-money, was totally stript of its gold and silver; though they had from time to time, like the neighboring colonies; agreed to take gold and silver coins at higher and higher nominal values, in hopes of drawing money into, and retaining it, for the internal uses of the province. During that weak practice, silver got up by degrees to 8s. 9d. per ounce; and English crowns were called six, seven, and eight shilling pieces, long before paper-money was made. But this practice of increasing the denomination, was found not to answer the end. The balance of trade carried out the gold and silver as fast as it was brought in; the merchants raising the price of their goods in proportion to the increased denomination of the money. The difficulties for the want of cash were accordingly very great, the chief part of the trade being carried on by the extremely inconvenient method of barter; when in 1723 paper-money was first made there; which gave new life to business, promoted greatly the settlement of new lands, (by lending small sums to beginners on easy interest, to be repaid by instalments,) whereby the province has so greatly increased in inhabitants, that the export from hence thither is now more than tenfold what it then was; and by their trade with foreign colonies, they have been able to obtain great quantities of gold and silver to remit hither in return for the manufactures of this. country. New York and New Jersey have also increased greatly during the same period, with the use of paper-money; so that it does not appear to be of the ruinous nature ascribed to it. And if the inhabitants of thosé countries

are glad to have the use of paper among themselves, that they may thereby be enabled to spare for remittances hither, the gold and silver they obtain by their commerce with foreigners; one would expect that no objection against their parting with it could arise here, in the country that receives it.

The 2d reason is, "That the merchants trading to America have suffered and lost by the paper-money."-This may have been the case in particular instances, at particular times and places; as in South Carolina about fifty-eight years since, when the colony was thought in danger of being destroyed by the Indians and Spaniards, and the British merchants, in fear of losing their whole effects there, called precipitately for remittances; and the inhabitants, to get something lodged in safe countries, gave any price in paper-money for bills of exchange, whereby the paper, as compared with bills, or with produce, or other effects fit for exportation, was suddenly and greatly depreciated. The unsettled state of government for a long time in that province, had also its share in depreciating its bills. But since that danger blew over, and the colony has been in the hands of the crown, their currency became fixed, and has so remained to this day. Also in New England, when much greater quantities were issued than were necessary for a medium of trade, to defray the expedition against Louisbourg; and, during the last war in Virginia and North Carolina, when great sums were issued to pay the colony troops, and the war made tobacco a poorer remittance, from the higher price of freight and insurance; in these cases, the merchants trading to those colonies may sometimes have suffered by the sudden and unforeseen rise of exchange. By slow and gradual rises they seldom suffer, the goods being sold at proportionable prices. But war is a common calamity in all countries, and the merchants that deal with them cannot expect to avoid a share of the losses it sometimes occasions, by affecting public credit. It is hoped, however, that the profits of their subsequent commerce with those colonies may have made them some reparation. And the merchants trading to the Middle Colonies (New York, New Jersey, and Pennsylvania,) have never suffered by any rise of exchange, it having ever been a constant rule there to consider British debts as payable in Britain, and not to be discharged but by as much paper (whatever might be the rate of exchange) as would purchase a bill for the full sterling sum. On the contrary, the merchants have been great gainers by the use of paper-money in those colonies; as it enabled them to send much greater quantities of goods, and the purchasers to pay more punctually for them. And the people

there make no complaint of any injury done them by paper-money, with a legal tender: they are sensible of its benefits, and petition to have it so allowed.

The 3d reason is, "That the restriction has had a beneficial effect in New England."-Particular circumstances in the New England colonies, made papermoney less necessary and less convenient to them. They have great and valuable fisheries of whale and cod, by which large remittances can be made. They are four distinct governments; but having much mutual intercourse of dealings, the money of each used to pass current in all; but the whole of this common currency not being under one common direction, was not so easily kept within due bounds; the prudent reserve of one colony in its emissions being rendered useless by excess in another. The Massachusets, therefore, were not dissatisfied with the restraint, as it restrained their neighbors as well as themselves; and perhaps they do not desire to have the act repealed. They have not yet felt much inconvenience from it, as they were enabled to abolish their paper-currency by a large sum in silver from Britain, to reimburse their expenses in taking Louisbourg, which, with the gold brought from Portugal, by means of their fish, kept them supplied with a currency, till the late war furnished them and all America with bills of exchange, so that little cash was needed for remittance. Their fisheries too furnish them with remittance through Spain and Portugal to England, which enables them the more easily to retain gold and silver in their country. The middle Colonies have not this advantage; nor have they tobacco, which in Virginia and Maryland answers the same purpose. When colonies are so different in their circumstances, a regulation that is not inconvenient to one or a few, may be very much so to the rest. But the pay is now become so indifferent in New England, at least in some of its provinces, through the want of currency, that the trade thither is at present under great discouragement.

The 4th reason is, "That every medium of trade should have an intrinsic value, which paper-money has not. Gold and silver are therefore the fittest for this medium, as they are an equivalent, which paper can never be."-However fit a particular thing may be for a particular purpose, wherever that thing is not to be had, or not to be had in sufficient quantity, it becomes necessary to use something else, the fittest that can be got, in lieu of it. Gold and silver are not the produce of North America, which has no mines; and that which is brought thither cannot be kept there in sufficient quantity for a currency.