CHAPTER XIII.

MONEY IS MADE ABUNDANT IN THE NEW STATE.

THE new State was now in the Union, and it was enjoying the benefits of an immigration almost unparalleled in the history of mankind. It was not the movement of men in tribes or aggregate bodies, impelled by necessity or by political considerations to abandon their country for another; but it was an immigration of individual families, influenced by motives which affected them severally, and by an expectation that they would benefit their condition in so doing. Yet the aggregate number was enormous, and it seemed like the migration of a nation coming with radiant hopes to take possession of a land of promise. Their coming seemed to make the State rich; for though very few of them were persons of considerable means, the most of them came as producers, and if they brought nothing else they brought a capacity for labor and an expectation that by labor they were to make their fortunes. Their coming had rendered necessary many new facilities for travel and business; and the legislature had been prompt to recognize the fact.

LAND SPECULATIONS.

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During the short period while Michigan had been a State but not in the Union, there had been legislation providing for the organization of fifty-seven townships, and the laying out of sixty-six state roads; eleven railroads had been chartered and nine banks; and permission had been given to construct thirteen dams upon navigable waters for manufacturing purposes. Much of this legisla tion was premature, as we can very plainly see now; but it did not then seem so to the people. General causes were inflating prices and inciting to speculation all over the country; the market values of land were rapidly increasing, and the imaginations of men were so far excited by the great changes which were taking place on every side, that it seemed impossible to suggest a scheme so wild or so improbable that it should be without plausibility in some minds. Speculators were eagerly making entry of all the government land for which they could raise money; and in illustration of the spirit in which this was done, an instance is given in which two brothers made purchase together in a single day of upwards of two hundred and forty quarter sections of land, without even taking the precaution to have them first visited and examined. But sales by individuals were quite as active as sales by government; the great majority being made upon small payments down and the purchasers expecting to make fortunes from the rapid rise in prices. Thus every

body seemed to be growing rich; and though much of the appearance was fictitious, even the coolest heads could see that the apparent prosperity had some foundation, and that in the rapid settlement of the State there was reason for a steady and considerable increase in values.

The currency of the country naturally and necessarily demanded early attention. At this time it consisted almost exclusively in issues of state banks. President Jackson's famous specie circular had made it necessary that payments for government lands should be made in gold and silver, but what was made use of for this purpose did not readily find its way into the channels of trade, and if it had done so, the amount of coin in the country would have been found wholly inadequate to the demands of business. Nearly all financial transactions were therefore necessarily carried on with bank paper, and the most of this had its origin outside the State. A hasty glance at the condition of the currency in territorial times seems a necessary introduction to any account of early state legislation.

The people of Michigan had had an experience in currency as extensive and diversified perhaps as that of any other people in the world. Much of the earliest trade was with wampum; and when this proved insufficient for the wants of the trade, furs and peltry became a substitute, the beaver and other skins commonly dealt in having each a

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recognized value in the market, by which flour and other provisions, liquors, etc., were bought and sold. But these primitive devices were found quite insufficient to meet the demands of trade during the period of the American Revolution, and merchants made their due-bills which were received as change in business transactions, under an expectation that they would pass from hand to hand as currency. In 1779 an appearance of legality was given to this practice by the governor, who permitted the merchants to issue bills expressly designed for currency; the quantity issued being limited to the estimated value of their stocks on hand. The merchants all received each other's bills, and had a set time in which to make their exchanges; and though losses sometimes occurred from bankruptcy, the percentage was not great, and the system answered for the time a very good purpose. All the while there was some coin in circulation; and this consisted largely in Spanish dollars, which for convenience in change were cut into halves, quarters, and eighths. The subdivision invited cheating, which became after a time so general and so serious that in 1798 the grand jury presented the cut money as a nuisance, and it was driven out of circulation.

The attempt made in 1806 to establish a bank at Detroit has already been referred to. The men concerned in this scheme and who were to supply the capital had ample means, and there is no

reason for the belief that anything fraudulent, or which seemed to them improper, was contemplated. But the local needs required no such bank; and if it acquired a circulation at all commensurate to its capital, it must find it in distant parts of the country. Congress disapproved of the charter, and the bank was forced to discontinue business, which it did without, so far as we know, any considerable loss to creditors. A few of the bills failed to be returned for speedy redemption, and Judge Woodward, the first president, was annoyed some years afterwards by threats of suits upon them. He was' more annoyed by bitter and unscrupulous newspaper attacks upon him for his connection with the scheme, which, though published at Pittsburgh, circulated freely among

enemies in Detroit.

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The presence of the army in Detroit caused a considerable expenditure of government money, which ceased with the capture by the British. Colonel Proctor, the British civil governor, then undertook to supply to some extent the want of local currency by issuing a proclamation making army and commissariat bills legal tender, under penalty of two hundred dollars for refusal to receive them as such; but this was in the nature of a forced military loan, and the bills disappeared when the British occupation ceased. After the war much money was brought in from other states to meet government expenditures, but there was