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themselves almost worthless, from the remoteness of
the day of payment, were made a lawful tender.
The borrower, who received them, paid annual interest on his debt to the state; and this interest constituted a public revenue, obtained, it was boasted, without taxation.
The system spread rapidly.
In 1712,
South Carolina issued, in this manner, ‘a bank’ of fortyeight thousand pounds.
Massachusetts, which for twenty years had used bills of credit for public purposes, in 1714, authorized an emission of fifty thousand pounds in bills, to be put into the hands of five trustees, and let out at five per cent. on safe mortgages
Felt's Mass.
Currency, 68. |
of
real estate, to be paid back in five annual instalments.
The debts were not thus paid back; but an increased clamor was raised for greater emissions.
In 1716, an additional issue of one hundred thousand pounds was made, and committed to the care of county trustees.
The scarcity of money was even more and more complained of: ‘all the silver money was sent into
Great Britain to make returns for what was owing there.’
Yet the system was imitated in every colony but
Virginia.
Franklin, who afterwards perceived its evil tendencies, assisted, in 1723, in introducing it into
Pennsylvania, where silver had circulated; and the complaint was soon heard, that, ‘as their
money was paper, they had very little
gold and
silver,
and, when any came in, it was accounted as merchandise.’
Rhode Island, on one occasion, combined the old system of payments, made in the staple products
of industry, with the new system of credit, and, in 1721, ‘issued a bank of forty thousand pounds,’ on which the interest was payable in hemp or flax.
In
Massachusetts, a struggle ensued for a new application of the credit system, by the establishment of
