mercial intercourse with Britain as forced the men of the North to provide for the carrying trade. Planters sometimes owned their own vessels, but they were usually content to rely on the ship sent out by their London factor, or the chance visits of the Yankee trading sloops. The Enumerated Articles. The Cavalier Parliament went Beer, a step farther than the Roundheads in securing the domi- 341-363. nance of British interests. A clause was added (1663) to the Macdonald, Navigation Acts requiring that certain enumerated com- 133-136. modities might be exported from the British colonies to Great Britain and her dominions only. Cotton, indigo, fustic and other dyewoods used in the making of cloth were limited to the home market, in the interests of manufactures. Sugar, tobacco, and ginger might not be exported direct to the Continent, but must pass through a British port that the government might secure the customs duty and the merchants a commission on the transfer. Thus far the limitation affected the West India trade chiefly, since none of the commodities but tobacco was produced on the mainland. Other products were added to the list from time to time as British interests seemed to demand: molasses, rice, and naval stores in 1705; copper, beaver and other furs in 1722; whale fins, hides, iron, lumber, raw silk, and pearlashes in 1764. Vessels laden with enumerated goods must give bond to land the cargo in an English port whence it might be shipped to the Continent. The legislation of 1663 restricted also the import trade. Not only were the staple products of the colonies limited to the English market, but goods imported from Europe must be brought via England that duties and commissions might be collected before the cargo was reshipped to America. As a concession to colonial interests certain essential commodities were exempted from this requirement. Salt for the fisheries of New England might be imported direct from Spain and Portugal. Wines from the Western Islands need not make the roundabout journey to an English port. Provisions, horses, servants, and (later) linen might be shipped from Ireland without paying toll to the English merchants. G Docs. Col. Hist. N.Y., Weeden, Weeden, II, 556-559. Docs. Col. Hist. N.Y., III, 44. Beer, 405-420. Macdonald, 248-251. Smuggling. The object of this commercial policy was evident. The English shipmaster was enabled to charge high freights because of his exclusive privilege of carrying colonial goods. The English merchant was insured his profits on colonial trade since the major part of exports and imports, whether from Europe or the Orient, must pass through British warehouses. The English manufacturer was enabled to get his raw materials cheap and sell his finished goods dear by his practical monopoly of the colonial market. That this policy, if actually put into execution, must work injury to America by adding to the costs of transportation, reducing the price of what the colonists had to sell, and advancing the price of what they must buy, was perhaps not quite so apparent to the comprehension of the statesmen who devised these regulations. Colonial industries escaped ruin only because the acts were evaded by a well-developed system of smuggling. Many a hogshead of tobacco. found its way to Holland and France without paying tribute at an English port. Vessels laden with freight from the Continent lay offshore in the neighborhood of Cape Ann for weeks together. Dories and fishing smacks and lumber scows plied to and from, conveying the contraband goods to Gloucester and Salem. In 1700 one third of the trade at Boston and New York was in direct violation of the law. Royal governors and revenue officers protested in vain. Smuggling was upheld by public opinion and some of the most reputable men of the colonies were engaged in this illicit business. The Molasses Act. More irritating still to the men of New England was the legislation that concerned the West India trade. Merchants had found greater profit in commerce with the French islands and Dutch Guiana than with the Barbadoes and Jamaica. The English islands could not take all the goods offered by the Yankee traders, and profits declined. Furthermore, the French sugar and molasses could be had at lower prices than the Jamaican. The French planter was the more economical producer, and his molasses was a drug in the home market because of a law excluding rum from France. A brisk trade with these foreign colonies had developed to the prejudice of Great Britain's sugar islands. Protests were forwarded to the home government, and Parliament undertook to remedy the grievance of the English planters. A bill passed the House of Commons (1731) that prohibited the importation of sugar, molasses, and rum from any foreign colonies into Great Britain, Ireland, or any of the American colonies; also the exportation of horses and lumber to foreign plantations. The House of Lords rejected the bill, arguing that the Northern colonies could not afford to buy English manufactures if this market for their agricultural products was cut off. The result of the debate was a compromise measure that passed both houses in the year following. "For the better securing and encouraging the trade of His Majesty's sugar colonies in America," practically prohibitory duties were imposed on foreign sugars. Rum and spirits were to pay ninepence per gallon, molasses and sirup sixpence, sugar five shillings per hundredweight. Trade with the French West Indies would have received a serious check but for the general practice of smuggling. Credit Money Hist. Am. Currency, As the population of the colonies grew and business Weeden, interests multiplied, the demand for capital with which I, 379-387. to develop the latent resources of the country and for Sumner, money to use in trade steadily increased. Neither wampum, bullets, nor staple products could serve the money 14-43. need of these thriving communities. In 1690 Massachusetts Bullock, hit upon what seemed to men of that day an inexhaustible Pt. I, Ch. IV. fountain of wealth in the issue of credit money. The expedition against Louisburg had failed, and the soldiers, who were to have been rewarded out of the booty, returned home clamorous for pay. The treasury was empty, and the government determined to meet its obligations in promises. Bills of credit were issued to the amount of £40,000. The Dewey, notes bore no interest and were made payable at no fixed time. There was some skepticism as to their ultimate value, 18-30. Davis, Currency and Banking, Pt. I. Financial Weeden, II, 473-491. and they were received in exchange at but twelve and fourteen shillings in the pound. The government succeeded in bringing this paper money up to par by making the bills receivable for taxes at five per cent advance over silver coin. The public was assured that the notes would be redeemed in silver at the end of twelve months, but the date of redemption was extended repeatedly until holders of the notes became discouraged, and the bills were reissued as soon as redeemed. In 1711 another expedition to Canada rendered necessary a new issue of bills of credit. Massachusetts became responsible for notes to the amount of £40,000. New York and Pennsylvania, joining in this expedition, met their proportion of the expense by issues of £10,000 and £2000 respectively. In 1733 Rhode Island, Connecticut, and New Hampshire had resort to this attractive expedient for meeting expenditures to which income from taxation was inadequate, and the Southern colonies soon followed the same pernicious example. The issue of paper money by a fully established government is a legitimate device for meeting a financial emergency when resort to immediate taxation is impracticable and when the obligation incurred is guaranteed out of the revenue of subsequent years, but the expedient is attended with grave dangers. It is always easier to contract a debt than to cancel it. The needy colonial governments deferred payment from time to time until public confidence in the issue was weakened and the bills began to depreciate in value. The loss fell on bankers who held the notes and on merchants who were obliged to receive them in exchange for goods. Farmers, on the other hand, who were purchasing implements and stock, thought the country needed more of this inexpensive money. The supply of capital was far short of the demand, and borrowers were obliged to pay interest as high as eight and ten per cent. It was urged that the government might suitably meet the emergencies of individual citizens by issuing bills of credit for the purpose of making loans at a reasonable rate of interest on real estate security. This seemed a brilliant plan, since it would meet three crying needs. It promised to furnish an income to the government, capital to landowners, and currency to the people. The argument was amply convincing to the legislators of that day. In 1714 the General Court of Massachusetts directed the issue of £50,000 to be loaned to private persons at five per cent. The loan was to run for five years, and the borrower undertook to pay back one fifth each year, giving a mortgage on his land as security. Subsequent issues brought the amount of these Massachusetts loans up to £260,000. The other colonies quickly adopted similar measures for meeting the general demand for capital. The results were disappointing. The farmers were usually unable to meet their payments, the governments got into financial difficulties and failed to redeem their obligations. The bills soon fell into disrepute, and the whole country from New Hampshire to Georgia was flooded with a depreciated paper currency. The several issues of twelve distinct legislatures were mingled in hopeless confusion. The Board of Trade had advised the colonial governors to veto the bills authorizing the issue of credit money, but their opposition was vain. The irate legislators refused to vote supplies, withheld the governors' salaries, and so forced their approval of the popular measures. Effort was made to restore full purchasing power to the discredited currency by declaring the notes legal tender in payment of private debts and imposing heavy penalties on creditors refusing to receive them. Business men of the colonies and merchants in London made vehement protest against these force laws. In 1750 the paper money of Massachusetts exchanged for sterling at one eleventh of its face value, that of New Hampshire at one twenty-fourth, that of Rhode Island at one twenty-sixth. The depreciation was less in the Middle and Southern colonies, but everywhere the injustice done to capitalists and to widows and minors dependent on invested funds was great and increasing. The year following Massachusetts redeemed her outstanding bills in silver accruing from the Louisburg indemnity, and soon after declared gold and silver the only legal tender in payment of debt. The |