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the vessels were sloops or brigantines. and Albany. In 1687 Governor DonIt was not unusual for the port of gan reported that New Yorkers owned New York or the port of Boston to 9 or 10 vessels of from 80 to 100 tons have weekly clearances to the number each, 2 or 3 ketches and barks of about of twenty or more. At this time the 40 tons each and some 20 sloops of war of the Spanish succession was from 20 to 25 tons each. Newport, raging and French privateers were R. I., rivalled Boston and distanced harassing American vessels trading New York in its shipping. For the to the West Indies and to England. calendar year 1764 the custom house Consequently, the merchantmen went books of that port recorded 180 vesback and forth under convoy of men sels there owned, engaged in foreign of war, and from the accounts of these trade, and 352 in coasting from Newsailings we have some idea of the pro- foundland to Georgia. On these vesportions to which the colonial marine sels 2,200 seamen were employed. In had then attained. For example, in the West India trade alone 150 vessels May, 1704, 35 vessels cleared to- were engaged and 14,000 hogsheads of gether from Barbadoes for New York, molasses were annually brought Philadelphia, Rhode Island and thither. Boston. On June 7 of the same year When the Revolution broke out, the Virginia fleet of 143 vessels sailed colonial built vessels to the aggrefor English ports under convoy. In gate of 398,000 tons were employed in August, 1706, a fleet of 200 vessels the general commerce of Great Brisailed from Virginia to England tain. In the carrying trade between under convoy of five men-of-war. Great Britain and the American colIn September, 1706, a fleet of 60 mer- onies alone at this time, there were chantment sailed on a single day from 662 vessels, having an aggregate tonBarbadoes for England and various nage of 86,744; of these, 497, with a American ports. A colonial merchant tonnage of 65,058, belonged to Britfleet of from 100 to 200 vessels sailing ish merchants, and 165, with a tonunder convoy to or from England was nage of 21,686, to merchants of the not unusual.*

colonies. At the same time there A list of the vessels owned in New were in the intercolonial merchant York City in 1684 showed 3 barks, 3 marine, including the West Indies, brigantines, 26 sloops and 46 open 136 British vessels, with a tonnage of boats. In the same year, from March 6,358, and 781 colonial vessels, of a to November, there were 86 clear tonnage of 37,032.*

tonnage of 37,032.* In number of ances up the Hudson River to Esopus vessels the colonies were far ahead


* Lyman H. Weeks and Edwin M. Bacon, An Historical Digest of the Provincial Press, vol. i., passim.

Report of the Lords of the Committee Privy Council for Trades anil Plazıtations, p. 74 and Appendix (London, 1791).




of the mother country, but in tonnage erally levied by all the colonies, while they were behind. Their almost com- almost as many imposed tariff duties plete monopoly of the intercolonial on both exports and imports. The and West India trade, where the ves- revenues collected in these ways, sels were of small size, instead of however, were for the most part inocean-going ships, accounts for this.* significant. The oppression of taxa

tion, forming as it did one of the most Banking and Currency.

dominant causes in impelling the colThe perfection of a financial system onists to throw off the yoke of Great of any sort is one of the last steps in Britain, had embittered the whole the governmental development of any country to such an extent that the new country. In the stern business people were suspicious even of taxaof nation-building the matters of tion from within. Furthermore, the banking and currency are apt to re- newly appointed Continental Conmain in a rather chaotic condition gress had vested in it no power for for some time, and this was preëmi- the collection of revenue, and this nently the case with the American fact, coupled with the lack of availcolonies during their early days. able loan agencies, left that body Public credit for all practical pur- almost penniless when hostilities were poses was then non-existent, nor did finally opened with the mother counbanks, in the modern acceptance of try in 1775. the term, have any place in the co- In an effort to overcome this emlonial scheme of things. For this barrassing situation and raise the reason it was at that time impossible absolutely indispensable funds for to secure any large loans in this coun- carrying on the war, the Continental try through influential or really re- Congress decreed an issue of bills of liable sources. A few of the local credit. Altogether, forty emissions of powers demanded excise duties on notes occurred in the interval from articles which were then deemed lux- June, 1775, to November, 1779, their uries, and a property tax was gen- aggregate face value amounting to

$241,000,000, in addition to which the * Willis J. Abbot, American Ships and Sailors (New York, 1902); William W. Bates, The

various States put out $209,000,000. American Marine (Boston, 1903); E. L. Bo- All of these pledges had only the faith gart, Economic History of the United States (New York, 1908); William W. Bates, Ameri

of Congress as security and, although can Navigation Its Rise and Ruin (Boston, that body called upon the individual 1902); Winthrop S. Marvin, The American

States again and again to provide Merchant Marine (New York, 1902); Weeks and Bacon, An Historical Digest of the Provin- means for making good, the issues cial Press (Boston, 1911); Adam Seybert, Statis- were never redeemed. The logical retical Annals (Philadelphia, 1818); V. S. Hill,

York, Ilistory of American Shipping (New

sult was that, from the beginning, a 1883).

steady depreciation in the value of the



notes took place. In 1780 the govern- totaling approximately $63,000,000 ment at length realized the futility were made, the specie value of which of further attempting to make good became $7,600,000 in 1780, according its pledges, and accordingly arranged to the scale of depreciation then defor the acceptance of paper currency cided upon by Congress. Two years in place of silver at the ratio of 40 to later, when Congress found itself 1. Despite this fact, the depreciation unable to meet the interest on these, continued so steadily that the notes indents were issued to the holders of were popularly considered as so much certificates. These became current in waste paper. Finally in 1790, when the payment of State taxes, following official estimates placed the total of which they could be turned back upon the issue then outstanding at about the national government when the $78,000,000, Congress

Congress passed the latter demanded its requisitions from funding act which included the pro- the several States. At the same time vision that all notes still outstanding the government made no progress in could be retired at the rate of 100 to 1.

its many attempts to impose national Meanwhile Congress was making taxation. desperate efforts to repair the na- The new government could untional fortunes. Loans were sought doubtedly have made better progress both at home and from foreign with its finances, had not the Articles

, powers; attempts to impose national of Confederation (which became taxation were made; and requisitions operative in 1781) so limited its scope both in specie and specific supplies as to leave it practically no financial were levied. The latter method was

powers. A common treasury, maina sorry failure.

The demand for tained by all the States proportionspecie netted only a little more than ately to the value of land and im$5,000,000, while that for supplies not provements in each and administered only failed to work out to practical by the States, was the original means advantage, but resulted in actual

of defraying expenses for the common waste.

defense or general welfare. When It was at this juncture, with the Congress tried to impose a 5 per cent. necessity of borrowing funds becom- tariff on all imports in the same year ing more and more urgent, that the that the Articles of Confederation first really important step in the took effect, it failed to receive the apestablishment of a national banking proval of the States.

. A similar system was taken by the establishment attempt, made two years subsequently of loan offices in many of the States. on a somewhat more elaborate scale, These sold indented certificates bear- was likewise unsuccessful. ing interests which ranged from 4 per The general fear of the results of cent. to 6 per cent. In this way loans any centralized power, which at that




time, not unnaturally, pervaded the Altogether, from 1777 to 1783, country, retarded, perhaps, as much $6,352,000 was secured in this way as anything else any fiscal systema- from France, $1,304,000 from Holtization in this country. The admin- land, and $174,000 from Spain. The

, istration of the nation's finances by country's first bankers' loans octhe Continental Congress

curred in 1782, being placed with Holdirected in the beginning by two sep- land and continuing, luckily for arate treasurers. These were fol

America, until after hostilities had lowed by a committee of thirteen been broken off and the new governcongressional delegates, who, in turn, ment of 1789 was fairly established. were superseded by a treasury board

In 1784 the national government which was empowered to manage all

was in debt to the extent of $39,000,public moneys. It was not until 1781

000, with an annual interest charge of that the financial system became cen

$1,875,000 — and this not includ. tralized under one head. In that year ing the still outstanding bills of credit. Robert Morris, who may really be

Coupled with the unavoidable govtermed the pioneer American banker, ernmental expenses, this was far more was selected to act as superintendent

than the slender resources of the of finance. From the time he came

nation could bear. When, in 1787, into office he labored zealously and

total bankruptcy appeared the cerefficiently to place the finance, bank

tain fate of the country, a national ing, and currency of the country on a

convention was called for the purfirmer basis; and although his efforts to secure national taxation proved of

pose of drawing up a constitution by no avail, he did succeed in stimulating

which the government might be vested

with the larger financial powers then the government to a great extent by borrowing moneys on the strength clearly seen to be imperatively needed

if disaster was to be averted. It was of his own personal credit. It was at his advice, too, and very largely through the Constitution, framed on

, through his unremitting efforts, that

that occasion, that the right to impose the Bank of North America was in

duties on exports and imports was stituted. Through the years of 1782 withdrawn from the individual States, and 1783 this institution was of great except in such cases where the enservice to the nation as a temporary

forcement of local inspection laws loan agency.

should make such action imperative, The nation's foreign loans began as and that empowered Congress to fix early as 1777, when comparatively the tariff and to both lay and collect small

sums were borrowed from taxes. This furnished the governFrance. Later Spain and Holland ment with the two financial supports also came to the aid of the colonists. of which it was just then in most des



perate need, and showed itself to be a them no attempt was made at engravvital force when the new government ing. When

When the new government took up its work in 1789.

came into being in 1789, except for the The action of the Continental Con- depreciated notes issued during the gress in 1776 marked one of the first course of the war, there was no curattempts to issue paper money in rency afloat, save an occasional Bank America. Prior to this some of the of England note, a few Spanish milled

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By a LAW of the Colony of
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received IN ALL PAYMents in the

in all Payments in tbe Treasury, for
Treasury, for Three Pounds.

Five Pounds. New-YORK,
New York, February 16, 177

February 16,

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individual colonies had issued a script dollars, and French five-franc pieces. in lieu of currency, but no real issue It remained for Alexander Hamilton, of paper had been previously floated. when he became finance minister These first notes were printed on com- under the new government, to set mon paper at the printing office of about giving the country an effective Paul Revere. Although almost all of financial standing and at the same them were nearly square in shape, time secure a stable and uniform . they were not of uniform size, and on currency.

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