|History of the Early Settlement and Progress of Cumberland County By L. Q. C. Elmer - Chapter 6|
CURRENCY OF NEW JERSEY.
THE character and amount of the money circulating in a community is always an important element in determining its true condition. It is, however, exceedingly difficult to ascertain what were the facts of the case a few centuries back in any part of the civilized world, and this difficulty is not diminished, but is greatly increased, when we inquire into the situation of a now settled country. None of the historians of the American colonies seem to have given much attention to this subject, so that they afford us but little information in regard to it. All accounts, however, agree in showing that money was very scarce during the first century after their settlement. The money of account, as soon as the Dutch government was relinquished, was universally the same as that in England, namely, pounds, shillings, and pence. A limited amount of English coin, brought over by the immigrants, and a few Spanish and Portuguese gold coins were in circulation, but the most common coins were the "pieces of eight," as the Spanish milled dollars were called, and their subdivisions into halves, quarters, and eighths. It appears by some proceedings of the Assembly o( Pennsylvania that pewter and lead coins were used for small change in 1698, and there is some reason to believe that a small leaden coin was used at a somewhat earlier period in New York. Gold and silver coins cut into parts were resorted to, and were a source of much inconvenience and loss up to the period of the Revolution, and since.
All the coins in use, it would seem, passed in the colonies at a higher rate than their actual value in England and elsewhere. They would naturally pass for something above the rate of foreign exchange which varied at different places and times. But legislators in those days, as well as some now, supposed that the value of coins or other money might be arbitrarily established by law. The Assembly of West Jersey, by an act passed in 1681, declared
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that old England money should advance in country pay, viz: The shilling to eighteen pence, and other English coins proportionably, and a New England shilling to fourteen pence, but they declared the next year that this act should be null and void. In 1693 the same Assembly, after reciting that it had been found very inconvenient that money in the province bath differed in value from the same coin current of our neighboring province of Pennsylvania, to prevent which inconveniency for the future, it was enacted that all pillar Mexico and "Sivil" pieces of eight, of twelve pennyweight, should pass current for six shillings; thirteen pennyweights, six shillings and two pence, and so on, advancing in nearly the same proportion up to seventeen pennyweights for seven shillings, smaller pieces in proportion; all "dog dollars"* at six shillings. In 1686 the Assembly of East Jersey passed an act establishing the value of a piece of eight, weighing fourteen pennyweights, at six shillings, and other coins in that proportion, but it was repealed in less than a year. The two governments were surrendered to the crown in 1702, and the value of money, so far as a law could regulate it, was established by Queen Anne's proclamation. There is reason to believe that in 1700, or within a few years after that date, the ordinary rate of the piece of eight, weighing not less than seventeen pennyweights, was in Boston six shillings, in New York eight shillings, in New Jersey and Pennsylvania seven shillings sixpence, and in Maryland four shillings sixpence.
This variance was much complained of by the English merchants, so that in 1704 Queen, Anne issued a proclamation for settling and ascertaining the currency rates of foreign coins in the American plantations. After reciting the inconveniences occasioned by the different rates of the coin, and that the officers of the mint had laid before her a table of the value of the several foreign coins which actually pass in payment in the plantations, according to the weight and assays thereof, viz., Seville pieces of eight, old plate, seventeen pennyweights, twelve grains, four shillings and sixpence; Mexican and pillar pieces of eight, and the "old rix dollars of the empire," the same value; and various other enumerated coins at a value stated, according to their weight and fine
… Dog dollars were Dutch thalers, which had on them a figure intended to represent a lion, but more resembling a dog, and hence were popularly called dog dollars.
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ness. She declares, by the advice of her council, that after the first of January next, no Seville, pillar, or Mexican pieces of eight, though of the full weight of seventeen pennyweights and a half; shall be passed or taken in the colonies or plantations at above the rate of six shillings per piece, and other silver coins in the same proportion. A few years later these same provisions were embraced in an act of Parliament, but the proclamation was referred to as fixing the standard up to the Revolution.
Bills of credit were afterward issued by this, standard, each denomination being stated to be of the value of a specified number of ounces, pennyweights, and grains of plate, six shilling bills, the equivalents of pieces of eight or dollars, being of the value of seventeen pennyweights and twelve grains of plate; the word plate being apparently used as equivalent to coin.
When, and how pieces of eight, came to be commonly called dollars, does not distinctly appear. The name was derived from Germany, there called thaler, in Denmark daler, and early translated in England, into dollar. The German reicht thakr was of the same value originally as the Spanish piece of eight reals, a real being the unit of the Spanish money of account. The Spanish and Mexican pieces of eight, the coin most in use, were probably soon spoken of as dollars. The first mention of them that has been discovered, occurs in the sixth volume of the Records of the Province of Rhode Island, where, in 1758, the pay of some troops ordered to be raised, is stated in dollars, and this designation is repeated in subsequent years. In 1763 a petition was presented to the legislature of Pennsylvania, from which it appears that a person living in Maryland had given his bond to a Philadelphia trader, for the payment of a sum of money in "Spanish dollars." There is no reason to doubt that this designation was in common use at an earlier date than these records indicate, and it is certain that .in Philadelphia and elsewhere, a "Spanish milled dollar" was the standard of value until after the new coinage by the Federal government.
Several of the colonies established mints for themselves. In Massachusetts, shillings, sixpence, and threepence, were coined as early as 1652, by a reduction of weight, made to be of two pence in the shilling less value than the English coin, but expected to pass for the same. Maryland issued some silver coins in 1662, and copper half pennies were coined in Carolina, Virginia, and New Jersey,
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besides a few penny and two penny pieces. The British Crown stopped all this coinage except that of copper.
The laws of Great Britain and the provincial acts punishing counterfeiters of coin, applied only to gold and silver coins, so that copper coins were frequently made by private individuals. One Mark Newbie was an early immigrant who settled in Gloucester County, and was a member of the Assembly and councillor in West Jersey. A law in that province, passed in 1682, provided that Mark Newbie's half pence, called Patrick's half pence, should pass for a half pence, current pay of this province. A large number of them had been coined in Ireland, and he continued the coinage in New Jersey. A report to the New York Assembly in 1T87, states that various kinds of copper coins were in circulation of very different intrinsic values, viz: a few genuine British half pence, a number of Irish half pence, a very great number of very inferior and lighter half pence, called Birmingham coppers, made there, and imported in casks, and, lately introduced, a very considerable number of coppers of the kind that are made in New Jersey, many of them below the proper weight of the Jersey coppers.
American traders, especially in the Middle States, were as much dissatisfied with Queen Anne's proclamation, as the English merchants were with the colonial rates. Gov. Cornbury suspended its operation in New York, and the other colonies practically disregarded it. In fact it appeared then, as it is well known now, that no proclamation or statute can prevent the sale of coin for what it is worth for the purposes of trade, be that more or less than the legal rates. In 1708 the legislature of New York passed a law fixing the value of silver coins at eight shillings per ounce troy; but, notwithstanding the law and proclamation, the dollar weighing seventeen and a quarter pennyweiglns passed for eight shillings, and with some immaterial fluctuations this remained the current rate.
Such, indeed, was the scarcity of coin that there was a great call in the colonies for the issue of paper money, the doing of which was resisted by the British Board of Trade, to which all questions relating to the currency were commonly referred by the crown. It was only on special emergencies, that the governors, who were restrained by stringent instructions, would sanction them. The first act passed in New Jersey was in 1709, and authorized the issue of bills to the amount of three thousand pounds, for his majesty's
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service, some of which remained in circulation six or eight years, but were sunk by being paid in for taxes. In 1716 an act passed for the currency of bills of credit to the amount of eleven thousand six hundred and seventy-five ounces of plate, or about four thousand pounds proclamation money, which were soon paid in and redeemed.
After much controversy between the Assembly and £governor Burnet, the former refusing to provide for the support of the government, unless bills of credit were allowed, an agreement was come to in 1723, by which, as the governor wrote to Lord Carteret, the Assembly "provided for ten years to come for supporting the government, in order to obtain paper money, which their necessities made inevitable." This act authorized the issuing of forty thou. sand pounds in bills of various denominations, from three pounds down to a shilling. The preamble makes a long recital of the hardships of his majesty's good subjects within this colony, and states that though they had enough of the bills of credit of the neighboring provinces, yet to pay the small taxes for the support of the government, they have been obliged to cut down and pay in their plate (including: as is believed, silver coin), ear-rings and other jewels. Four thousand pounds of these bills were directed to be paid to the Treasurers of East and West Jersey, for the redemption of old bills of credit and other purposes. The rest were put into the hands of loan commissioners in each county, who lent the money on mortgage of real estate, and on deposits of plate, at an interest of five per cent, per annum, for periods not exceeding twelve years. The bills were made a. legal tender, and heavy penalties were denounced against those refusing them on a sale of lands or goods; and a stay of execution was provided for, until the bills had been six weeks in the hands of the commissioners All the bills were to be redeemed and cancelled within twelve years.
Subsequent laws provided for other issues, amounting in all, previous to the Revolution, to about six hundred thousand pounds. The last act, which was passed in 1774, was not assented to by Governor Franklin until an interval of ten years had withdrawn most of the previous issues from circulation, and not without great difficulty. The bills under this last act bore date March 26th, 1776, and constituted the principal part of the circulation of the State at the commencement of the war. Had the loan system, which had been adopted about the same time in Pennsylvania with
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signal success, been rigidly adhered to, the bills would probably have never depreciated, and would have been easily redeemed. But some of the acts authorized bills for the expense of the war with France and other exigencies, and these were only redeemable by taxes which often bore bard on the resources of the colony. Many of the laws proposed by the Assembly were refused the assent of the governor, without which no act could pass, and some that were assented to by him, the crown refused to sanction. It is said by Gordon, in his History of New Jersey, that at one time these bills were at a discount of sixteen per cent, in exchange for the bills of New York, and contracts in East Jersey were therefore commonly based on New York currency. Ebelin, a German historian, whose work has not been translated, states, in reference to New Jersey, "Paper money was first issued in 1709; it had a double value; that which circulated in East Jersey had the New York value, and in the western part of the State it was the same as in Pennsylvania. In the former, the guinea was valued at one pound fifteen shillings; in the latter, one pound fourteen shillings. This paper money circulated in New York as well as in Pennsylvania, therefore debts could be paid with it in either province." According to this statement, New Jersey bills passed for a higher rate in York than in Philadelphia. And this is corroborated by the correspondence of Gov. Morris, who also several times mentions the difficulty he had in negotiating bills of exchange on London, for want of a sufficient quantity of currency in specie or in bills to supply the ordinary necessities of Pennsylvania and New Jersey. He says, bills for one hundred pounds sterling sold for sixty per cent, in 1741, which was the most he could get in Jersey money. It may be, however, that at one time the New Jersey bills were at a discount in both cities. In 1760 an act was passed authorizing the Treasurers (for until after the Revolution there were always two) to receive the taxes in money as it should pass in the western division of the colony; and in 1769 an act was passed reciting that 347,500 pounds in bills had been struck for the use of the crown in the last war against France, and that the sum of one hundred and ninety thousand pounds remained due, therefore directing this amount to be levied in proportionate taxes yearly till 1783, the payment to be made in money as it now passes in the western division of the colony. As the bills were all proclamation money and receivable for taxes in all parts of the State, this provision
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must have been applicable to payments in coin, requiring them to be received at the rate of seven shillings sixpence to the dollar, and not at the rate of eight shillings.
The bills of 1709 were in the form following, viz: "This indented bill of- shillings, due from the colony of New Jersey to the possessor thereof, shall be in value equal to money, and shall be accordingly accepted by the Treasurer of this colony, for the time being, in all public payments, and for any fund at any time in the Treasury. Dated New Jersey the 1st of July, 1709. By order of the Lieutenant-Governor, Council and General Assembly of the said Colony." They were signed by four persons named in the law, or any three of them.
The bills authorized by-the act of 1723 differed from those before issued. They commenced, "This indented bill of ounces of plate due, &c." Three pounds were declared equal to eight ounces fifteen pennyweights of plate, and one shilling equal to two pennyweights twenty-two grains of plate, and others in the same proportion. Afterwards the form was, "This bill by law shall pass current in New Jersey for ounce pennyweights and grains of plate."
The bills issued by virtue of the act of 1774 were of the following form: "This bill of one shilling proclamation, is emitted by a law of the colony of New Jersey passed in the fourteenth year of the reign of his Majesty King George the third. Dated March 26, 1776," and were signed by any two of seven persons named.
The bills of 1780 were as follows, viz: "The possessor of this Bill shall be paid - Spanish milled dollars by the 31st day of December, 1786, with interest of like money, at the rate of five per centum per annum, &c.,' and had an indorsement that the United States insured the payment.
The bills issued pursuant to the act of 1781 were of the following form: "State of New Jersey. This bill shall pass current for agreeably to an act of the legislature of this, State passed January 9, 1781."
All the varieties were printed on coarse paper, with common type and various devices including, previous to 1780, the arms of Great Britain, and were easily counterfeited, which the penalty of death was found ineffectual to prevent.
The market price of silver in Philadelphia, which until within the last century was a more important emporium of trade and had
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more capital than New York, and, therefore, gave its law in this matter to the greater part of this State, is stated to have been per ounce from 1700 to 1739 various rates from 68. 10d. to 88. 9d. The full weight of a dollar, according to Queen Anne's proclamation, was 17 pennyweights; but the provincial usage, finally sanctioned by law, was to. reckon it at 171 pennyweights. If 17 pennyweights were worth 7s. and 6d., an ounce was worth something over 8s. 8d. Most of the dollars in circulation did not weigh more than 17 pennyweights.
Paper money was issued in Massachusetts as early as t690; in New York and New Jersey 1709; and in Pennsylvania in 1723; but the subject was a constant source of controversy with the government in Great Britain. The lieutenant-governor of New York wrote to the Duke of New Castle in 1740, that the proclamation and act of Parliament were not enforced; paper bills are the only money circulating in New York. In 1746 Alexander and Morris wrote to the duke, that the officers of the government of New Jersey had been without any support or salaries to enable them to execute their offices ever since September, 1744, which they conceived was chiefly occasioned by the council and late governor's refusal to pass an act for making forty thousand pounds in bills of credit, which was at several times, passed by the Assembly, and often refused by the council or governor, because they conceived it would tend greatly to the destruction of the properties of the people of New Jersey and of all his Majesty's subjects, and because at that time the frauds and abuses of paper money in the plantations were under the consideration of the British Parliament.
In 1743, Gov. Lewis Morris, of New Jersey, wrote to Gov. Shirley, "Our paper bills being to be destroyed at stated times every year, and the interest to be paid in that specie every year, makes it necessary for the borrowers to have them, and if they have them not, to give an extraordinary price for them. The mercantile folks in York and Pennsylvania, and those that keep money in Jersey, have found their account in this. One effect has been that those in Y. and P. choose to be paid for what they sell rather in Jersey currency than their own; a second that the Jersey people rather choose their own currency than that of their neighbors; and as N. Y. and Pennsylvania cannot well manage their trade without the help of Jersey, so they must have in many cases Jersey currency to its nominal value, with respect to New York, it being now
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between 12 or 13 per cent, better than that, and likely to rise higher. But with respect o gold and silver its real value is much short of its nominal value, and probably always will be so while it is in the power of merchants to put what value they think proper upon gold and silver. In a Pennsylvania Gazette of Sept. 1742, the merchants of Philadelphia, to the amount of seventy-five, published at what rates they will take gold and silver, and after mentioning at what prices they will take gold (which not being fixed by act of Parliament they may perhaps have the liberty of doing), they set the value of French crowns and Spanish milled pieces of 8, at Is. 6d and all good coined Spanish silver at Ss. 6d. the ounce. Tho' I believe by the merchants' private agreement amongst themselves, they have always done the same thing since the existence of a paper currency, yet I do not remember so public an instance of defying an act of Parliament."
The amount of bills issued in Pennsylvania was never excessive. The greatest amount in actual circulation was about 1759, when it was stated to be 185,000 pounds. The early notes and indeed all that were issued up to the Revolution, maintained their credit very well, and but for the expense of the war they would have been redeemed at par. In 1753 a struggle began between the Assembly and the Governor which lasted many years. Iii 1775, Governor Morris, son of Lewis Morris, states in an angry message to the Assembly of Pennsylvania, "I said the act of the 6th of Queen Anne for ascertaining the rates of foreign coins in America was shamefully slighted and disregarded in this province, and I say so still. It is known to you and every one that Spanish pieces of eight, do now and for a number years have passed and been current at 7s. 6cL, when that act requires that they should pass for six shillings only; and that other coins are current nearly in the same proportion; from whence it appears that though you call your paper bills, money according to Queen Anne's proclamation, it is really not so, but twenty-five per cent. worse."
In 1764 the Board of Trade in London made a report to the Crown, in which they assigned six reasons for restraining the emissions of paper bills of credit in America, as a legal tender, one of which was that an act of Parliament restraining and regulating the practice in New England had a good effect. Dr. Franklin, who was then the agent in London for Pennsylvania and New Jersey, published a paper, entitled remarks and facts relative to the American
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paper money, in which, with his usual ability, he attempted to answer those reasons, it must be confessed, however, with but indifferent success. He refers to the difficulties that had been occasioned by the want of a sufficient amount of coin, and the growth that had resulted from the use of paper money. In answer to the sixth reason, which was that in the middle colonies, where the paper money had been best supported, the bills had never kept to their nominal value in circulation, he remarks: "The fact in the middle colonies is really this, on the emission of the first paper money, a difference soon arose between that and, silver; the latter having a property, the former had not, a property always in demand in the colonies, to wit, its being fit for a remittance. This property having soon found its value, by the merchants bidding on one another for it, and a dollar thereby coming to be rated at eight shillings in paper money of New York, and seven shillings six pence in paper of Pennsylvania, it has continued uniformly at those rates in both provinces, now near forty years, without any variation upon new omissions; though in Pennsylvania, it has at times increased from 15,000 pounds the first sum, to 600,000 pounds or near it. Whenever bills of exchange have been dearer, the purchaser has been constantly obliged to give more in silver as well as in paper for them." It is apparent from these remarks that silver fluctuated less in value, during the times specified, and commanded a less price in paper than is common now; a fact which may be attributed perhaps in part to the much less activity of trade and to the greater expense and risk of sending it abroad. It is manifest, too, from this history of the currency, that the rates of eight shillings in New York, and seven shillings sixpence in New Jersey and Pennsylvania for a dollar, instead of four shillings sixpence, its real value, or six shillings its proclamation value, originated before paper was issued and in part from other causes.
The first notice of money that appears in the minutes of the general Congress of the colonies, which sat in Philadelphia, occurs June 14, 1775, when six companies of riflemen were ordered to be raised, and the monthly pay of the officers and privates is stated in dollars and thirds of a dollar. At subsequent times various amounts of money are specified in dollars and ninetieth parts of a dollar. This shows that a dollar was then understood to be equivalent to 7s. &L or 90 pennies. Cents or hundredths of a dollar had not yet been introduced. At this time the appropriations, paper bills and
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accounts of money in all the States were in pounds, shillings, and pence, and they so continued until the Federal Government established a mint. The provincial Congress of Massachusetts Bay, in May of this year, had ordered 100,000 pounds to be borrowed, and requested Congress to recommend to the several colonies to give a currency to their securities, which were bills for sums not less than four pounds, promising to repay on the first of June, 1777, the money "in Spanish milled dollars at six shillings each." What influences induced the Congress at Philadelphia to keep their accounts and make their appropriations in dollars and ninetieths does not appear, and can only be conjectured.
On the 23d of June, 1775, the Congress resolved to issue paper bills, from one dollar to twenty dollars each, to the amount of two million of dollars. They entitled the bearer to receive Spanish milled dollars, or the value thereof in gold or silver. July 29th they fixed the quotas of tax each colony was directed to provide to sink its proportion of the bills. Bills of a less denomination than a dollar were first directed to be issued Feb. 21, 1776, and were for one sixth, one-third, one-half and two thirds of a dollar. Various measures were from time to time adopted to keep up the credit of the continental currency. In June, 1776, Congress requested the several legislatures of the colonies to pass laws punishing counterfeiters. January 14, 1777, they recommended the legislatures of the States to pass laws to make the bills issued by Congress legal tenders; that debts payable in sterling, money be discharged with continental dollars at the rate of 4s. 6d. per dollar, and all other debts at the rate fixed by the respective States for the value of Spanish milled dollars. The legislature of New Jersey, as early as September 20, 1776, had made the continental bills a legal tender, and made it a felony punishable with death to counterfeit them or the bills of the United States of North America. This law said nothing about the rate at which they were to pass, so that they became legally a tender at the rate of a dollar for six shillings. But an assembly which sat at Haddonfield, Feb. 11, 1777, provided that in all payments and dealings, Spanish milled dollars weighing 17 pennyweights, 6 grains, should pass at the rate of seven shillings and sixpence lawful money of this State a dollar, and that continental paper bills should be deemed in value equal to the same, except in debts due and payable in British or sterling money, in which case they should pass at the rate of four shilling and, six
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pence. The legislature of Pennsylvania passed a similar law, January 29, 1777. Up to this time, the rate at which the bills of both provinces were legally to pass was six shillings the dollar; but coin was always worth more. When bills nominally for dollars came to be made a legal tender as well as those in pounds and shillings, it became absolutely essential to designate the relative value they should bear. Neither kind would purchase coin at its nominal rate, and very soon the continental money declined in value, even relatively to the provincial money.
The New Jersey act of 1777 declared that the Portugal gold half Johannes, weighing nine pennyweights. should pass for three pounds or eight dollars. This half joe, as it was familiarly called, which began to be coined about 1727, must have by this time become the most common gold coin in circulation. The provincial attorney-general, Cortland Skinner, was in the habit of selling a nolle prosequi in assault and battery cases for one of them, and lawyers reckoned their fees in the same coin, until long after the Revolution.
In December, 1777, Congress, by way of aiding the circulation of the continental bills, after reciting that it was the uniform practice of our enemies to pursue every measure which may tend to distract, divide, and delude the inhabitants of these States, to effect which they have promoted associations for supporting the credit of the public money, struck under the authority and sanction of the King of Great Britain, and thus sap the confidence of the public in the continental bills, they resolved, that it be earnestly recommended to the legislative authorities of the respective States forthwith to enact laws, requiring all persons possessed of any bills struck on or before the 19th of April, 1775, to exchange them for continental bills or bills of the respective States. This recommendation was not complied with in New Jersey until June 8, 1779, when an act was passed declaring that the colonial bills should continue to be legal tenders until the first day of September then next, and no longer except for taxes, and that all such bills not brought into the treasury before the first day of January then next, should be forever after irredeemable. In consequence of this act some of the bills issued under the act of 1774, became valueless in the hands of the holders, and were never redeemed.
At the commencement of the war Congress had no money, and no resource but a resort to japer bills. For a year these were
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nearly equal to gold and silver, but the quantity they were obliged to emit exceeded what had been the usual quantity of the circulating medium. They began therefore to depreciate, as coin would, had it been thrown into circulation in equal quantities. But not having, like gold and silver, a value in the markets of the world, the depreciation was more rapid and far greater than could have happened with them. Legal tender acts, and all other extraordinary measures for the support of excessive issues of paper money, were found to be worse than useless. In two years the continental paper money had fallen to two dollars for one, in three years to four for one, and in the six months following, that is to say, in 1779, it had fallen to twenty for one. At this time a circular letter was addressed by Congress to their constituents, signed by their President, John Jay. It dwelt on the future resources of the country, and insisted upon their ability to make good all their engagements, and even went so far as to urge "that paper money is the only kind of money which cannot make itself wings and fly away. It remains with us, it will not forsake us, it is always ready and at hand for the purpose of commerce or taxes, and every industrious man can find it. On the contrary, should Great Britain, like Nineveh, and for the same reason, yet find money, and escape the storm ready to burst upon her, she will find her national debt in a very different situation. Her territory diminished, her people wasted, her commerce ruined, her monopolies gone, she must provide for the discharge of her immense debt, by taxes to be paid in specie, in gold or silver, perhaps now buried in the mines of Mexico or Peru, or still concealed in the brooks or rivulets of Africa or Hindostan."
But neither eloquence nor patriotism could hinder the operation of those laws of trade, which, like the law of gravitation, are the laws imposed by the wise Creator of the universe, and remain unchanged and unchangeable. The depreciation continued, so that in March, 1780, Congress, admitting that their bills had increased in quantity beyond the sum necessary for a circulating medium, and wanted specific funds, to rest on for their redemption, and were then passed by common consent, at least 39-40ths below their 'nominal value. recommended the States to bring them in by taxes or otherwise, at the rate of 40 dollars for one Spanish milled dollar, and that the States issue bills redeemable in six years, with
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five per cent, interest, their payment to be guaranteed by the United States.
This recommendation was followed partially by most of the States; by Pennsylvania in June, 1780. The legislature of New Jersey, by act of June 8, 1780, authorized the issuing of 125,000 pounds of bills in dollars, and in January, 1781, an act was passed reciting that great inconvenience and embarrassment may arise in consequence of none of the bills of 1780 being of less denomination than one dollar, and therefore directing that the sum of thirty thousand pounds of equal value should be issued in bills of credit, viz., twenty thousand each of ten different denominations, from seven and sixpence to sixpence each. Both these emissions were known afterwards as the issue of 1780, and remained for a long time of greater or less value, being receivable in taxes at par, and after a time at a discount.
The total amount of continental bills issued amounted in September, 1779, to two hundred millions of dollars. During the year 1780 they depreciated so rapidly, that at the beginning of the year 1781 they ceased to circulate and died in the hands of their possessors. The total loss to the community, although for the time great, was not so large as might be supposed. Allowing for the depreciated value of the bills when they were issued, it was estimated that the actual loss to the people did not much exceed thirty-six millions of dollars; and this loss fell, not suddenly, but by gradual depreciation through several years, so that it did not much, if at all exceed, what, had Congress possessed the power of taxation, would probably have been directly raised in that way. Mr. Jefferson calculated the actual expense of the eight years of war, from the battle of Lexington to the cessation of hostilities, to have been about one hundred and forty millions, or about seventeen and a half millions of dollars for each year. The contrast of this expenditure, with that incurred in suppressing the late rebellion (not less than a thousand million each year) is very suggestive.
An act of this State passed January 5th, 171, declared that the continental currency should be a legal tender only at its current rates; and in June, ,a scale of depreciation was established for the adjustment of debts previously contracted, which was somewhat altered in December. By another act, passed in June of this year, it was recited that the several compulsory acts heretofore passed to support the credit of the paper money have not answered the
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good purposes thereby intended, and the acts making the bills a legal tender were repealed. This act provided that in case of any suit before May lst,.1782, the debtor might tender in open court the bills of the State at their nominal value, which should be a good discharge of the debt provided that the creditor might demand security for his debt, and if the debtor neglected to give such security, he should be deprived of the benefit of the tender. It appears that the Continental as well as the State bills were very extensively counterfeited. The freeholders of this county, in 1781, allowed the several collectors eleven hundred and forty dollars for counterfeit money received.
In December, 1783, after the peace, the legislature, at the request of Congress, passed an act to raise a revenue of thirty-one thousand two hundred ad fifty-nine pounds, five shillings, equal to one million five hundred thousand dollars, yearly, for twenty-five years, to be applied in payment of the interest and principal of debts due by the United States. One of the sections of this act, after reciting that it will be impracticable to raise the whole or any considerable part of said sum in gold or silver, enacts that bills be printed to the amount of the aforesaid sum, of denominations. from two shillings and sixpence each, to six pounds, to be received as equivalent to gold and silver in payment of said taxes. The collectors and treasurers were directed to exchange gold and silver they might receive for said bills, and all bills paid into the treasury were to be cancelled. In 1786 these bills were made a legal tender, and were called lawful paper money.
In December, 1784, the sum of ten thousand pounds was required by law to be raised by tax, to be applied towards the sinking of *bills of credit, to be paid in gold or silver, or bills of 1780 and 1781, at the rate of three dollars of bills for one of specie. In 1786 bills to the amount of one hundred thousand pounds were issued, to be loaned out, interest to be paid annually for seven years, and then one-fifth to be redeemed yearly. In 1787, it was enacted that no money should be received by the commissioners of the loan offices, or the treasurer, except gold and silver, and bills under the acts of 1783 and 1766. In 1788 it was directed that money paid into the loan offices should not be re-loaned.
Loan offices were first established in this State, in 1723, commissioners being appointed for each county, at first by the legislature, afterwards by the boards of justices and freeholders, in some 10
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counties two, and in others three, who were constituted corporate bodies. A specific amount of the bills was apportioned to each office, a certain sum being retained to replace those torn and defaced. The money was loaned at one time for twelve and at others for sixteen years, at five per cent, interest, on mortgage security, the interest and a portion of the principal to be returned on the 25th of March, yearly. The whole principal might be repaid on this day and re-loaned; but the annual payments of the principal were sent to the treasurer's office to be cancelled, or as was afterwards directed, cancelled by the Board of Freeholders. In 1735 wheat was authorized to be received at the rate of four pence less in value than market-price in New York, for the eastern division, and at Philadelphia for the western division, to be re-sold for bills. Gold and silver were to be received at the rates prescribed in Queen Anne's proclamation. The bills were not only made legal tenders, but heavy penalties were provided for refusing them in payment of debts or produce. Penalties were also enacted for asking or taking any advance or discount on these bills, for bills of New York and Pennsylvania. The business of the loan office in this county was not finally closed until the year 1801.
The act of 1783 was repealed in 1790, and the tax law of this year requires the taxes to be paid in gold and silver, or notes of the Bank of North America. In 1796 such of the bills as were receivable for taxes, were directed to be paid by the treasurer in. gold and silver.
It appears by the proceedings of the Board of Freeholders of this county, in 1792, that a settlement had been made with John Mulford, who had been the county collector, to a credit the sum of 144 pounds, 138. 4d. had been found due to him in old State money. Ebenezer' Elmer having been appointed by the board to procure this money, reported that he had obtained the same at the following rates, viz: 9s. 3d. old State money, at two for one, 92 pounds 128. 6d., at l0s. 6d. for 20s. and 51 pounds, us. 7d. of lawful money at 8s. the dollar; the cost of £144 13s. 4d. being 125 pounds 2d. It would seem that all the State bills were redeemed except some of the old emission of 1776, and a small part of the bills of 1780. As early as 1779 an act had been passed declaring that the old bills should not be a legal tender after September of that year, and if not brought into the treasury by the first of January next, then they should be irredeemable. The old State money referred to in the settlement
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with Mulford, comprised the bills of 1780, and the lawful money the bills of 1786.
The first bank established in the State was the Newark Banking and Insurance Company, incorporated in February, 1804, and authorized to have a branch in Jersey City. In December, 1804, The Trenton Banking Company was chartered. In 1807, the New Brunswick Bank, and afterwards banks were authorized, in other places. The notes of these institutions, together with those issued by the banks of Philadelphia, New York, and other cities, formed a large part of the circulating medium of the State. They maintained the specie standard until the war with Great Britain from 1811 to 1815, when they depreciated at one time to a discount of thirty cents on the dollar, but during all this time gold and silver remained the true standard of value, and no attempt was made to make the paper of the general government, or any other paper, a legal tender.
This very imperfect review of the state of the currency during our colonial state and afterwards, will aid us in appreciating the advantages we have derived from the currency established by our present general government, in freeing us from the complicated rates, and inconvenient moneys of account, prevailing in different sections, whatever may be the result of the recent renewal of a paper legal tender currency, as compared with gold and silver, or paper convertible into coin. Mr. Adams, in his report on the subject of weights and measures, made in 1820, remarks: "It is now nearly thirty years since our new moneys of account, our coins and our mint, have been established. The dollar, under its new stamp, has preserved it name and circulation. The cent has become tolerably familiarized to the tongue, wherever it has been made, by circulation, familiar to the hand. But ask a tradesman or shopkeeper in any of our cities what is a dime, or a mill, and the chances are four in five that he will not understand your question. But go to New York and offer in. payment the Spanish coin, the unit of the Spanish piece of eight, and the shop or market man will take it for a shilling. Carry it to Boston or Richmond, and you shall be told that it is not a shilling but a ninepence. Bring it to Philadelphia, Baltimore, or the city of Washington, and you shall find it recognized for an eleven penny bit, and if you ask how that can be, you shall learn that the dollar being of
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ninety pence, the eighth part of it is nearer to eleven than any other number; and pursuing still further the arithmetic of popular denominations, you will find that half of eleven is five, or at least, that half of the eleven penny bit is the fipenny bit, which fipenny bit at Richmond, shrinks to four pence half penny, and at New York swells to six pence."
One of the articles of the Confederation, which lasted from 177 to 1789, authorized Congress to regulate the alloy and value of coin struck by their own authority, or by that of the respective States. The Constitution vested the right of coinage solely in the general government. Early in 1782 a report on the subject of coinage was made to Congress, by Robert Morris, said to have been the work of his assistant, Governeur Morris. He proposed as the unit the fourteen thousand four hundred and fortieth part of a dollar, which was found to be a common division for the different currencies in use; ten units to be one penny, two pence one bill, ten bills one dollar (about two thirds of a Spanish dollar), ten dollars one crown.
No steps were taken to carry this proposition into effect. In 1784 Mr. Jefferson reported the plan afterwards adopted. He took the dollar as the unit, to be of silver, a tenth or dime of silver, and a hundredth of copper. In 1785 Congress unanimously resolved, that the money unit of the United States of America be one dollar; that the smallest coin be of copper, of which 200 shall pass for one dollar, and that the several pieces shall increase in decimal ratio. In 1786 they resolved that the money of account should be mills, of which 1000 shall be equal to the Federal dollar; cents, of which 100 shall he equal to the dollar; dimes, 10 of which shall he equal to the dollar; and dollars. Eventually, as is well known, this mode of keeping accounts was adopted throughout the Union, except that mills and dimes were dropped, and the accounts were simplified by being expressed only in dollars and hundredths. The final arrangements for establishing a mint and issuing coin were not adopted until 1192. The coins authorized were of gold, eagles of ten dollars, half and quarter eagles; of silver, dollars, half dollars, quarter dollars, dimes or ten cents, hale dimes; of copper, cents and half cents. At later dates one, three, twenty, and fifty dollar pieces have been coined in gold; also two cents in copper, the half cent having been discontinued.
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The adoption of the dollar was recommended by the circumstances that it was a very convenient value, was a familiar well known coin in all parts of the Union, with which the money of account in use was everywhere compared, and would therefore be well understood and readily adopted. The easy mode of reckoning by decimals was convenient, and capable of being soon understood by all classes. The origin of the mark $, for dollars, is still a subject of dispute. Some have supposed it to be an imitation of the pillars, circled by a wreath, others a combination of U S; and others, with more plausibility, the figure 8 crossed like the £, used for pounds. There seems no reason to doubt, however, that it was adopted in imitation of the same mark used in Portugal, and in some of the West India Islands. Its origin there we have no means of determining. It was not used in the United States until after the adoption of the Federal coinage. The Rhode Island minutes of the date 1758 are printed with this mark, but an examination of the original manuscript proved that it was not then employed, but the word dollars, or the contraction Drs. The earliest manuscript containing it, that has been discovered, was made in 1795, and the earliest printed book in 1801. After this it became universal; but how it was first introduced, and whether any special means were used to recommend it, seems unknown
Accounts were generally kept in this State in pounds, shillings, and pence, of the 7s. 8d. standard, until after 1799, in which year a law was passed requiring all accounts to be kept in dollars or units, dimes or tenths, cents or hundredths, and mills or thousandths. For several years, however, aged persons inquiring the price of an article in West Jersey or Philadelphia, required to be told the value in shillings and pence, they not being able to keep in mind the newly-created cents or their, relative value. Even now, in New York, and in East Jersey, where the eighth of a dollar, so long the common coin in use, corresponded with the shilling of account, it is common to state the price of articles, not above two or three dollars, in shillings, as, for instance, ten shillings rather than a dollar and a quarter. So lately as 1820 some traders and tavern keepers in East Jersey kept their accounts in York currency.
Towards the close of the Revolutionary War a considerable number of French crowns, worth $1.10, and smaller French silver coins, were introduced by the French army, and continued to circul-
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late for several years; and since, the French five-franc piece has circulated to some extent. The principal coins, however, in common use, continued to be the Spanish and Mexican dollars, and halves and quarters, especially the latter; Spanish and Mexican pistareens, which generally passed for twenty cents, although worth only about seventeen cents; the Spanish or Mexican real or bit, called an eleven penny bit or shilling; and its half called a five penny bit or sixpence. Prices of small articles were adjusted to these 12
and 6+ cent coins in use, and so continued until within a few years. About ten years ago these current coins had become so much worn as to be worth not much more than ten cents and five cents, and for a short time passed at those rates; but the American dimes and half dimes having been coined to a considerable amount, they came into common use, and prices were slowly adjusted accordingly.
During the present century the principal circulating medium has been bank notes and silver. The gold coin from the American mint having been made of a little more relative value than the silver, was used for exportation, so that very little was in circulation until after 1837, in which year the gold coins were reduced in comparative value, and a few years ago were quite plentiful. The banks were obliged to suspend the redemption of their bills during the war commenced in 1812, and for near ten years there was very little coin in use, small change being supplied at first by the bills of individuals, and then by those issued by banks and incorporated cities.
In 1815 a temporary law of this State was passed, which provided that unless the plaintiff in an execution would consent to receive current bills of a bank there should be a stay of the proceedings. It remained in force about eighteen months; would probably have been held contrary to the Constitution of the United States, but the question was not raised. The banks have suspended several times since for short periods of time. Shortly after the breaking out of the Rebellion the government of the United States issued large and small bills, and enacted laws declaring them to be a legal tender in payment of all debts.
The legal interest of money in this State was eight per cent., until 1738, when it was reduced to seven per cent, per annum. In 1774 an act was passed lowering the rate to six per cent., but it
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was disallowed by the crown. The change to six per cent., which now prevails in most of the State. was made in 1833. Some of the eastern cities and counties have special laws authorizing seven per cent.; and appearances indicate that the latter rate will have to be adopted in all parts of the State.
In 1866 an act passed raising the interest to seven per cent throughout the State.
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