that coin. The same act of parliament which
suppressed ten and five shilling bank notes,
suppressed likewise this optional clause, and
thereby restored the exchange between England
and Scotland to its natural rate, or to
what the course of trade and remittances might
happen to make it.
In the paper currencies of Yorkshire, the
payment of so small a sum as 6d. sometimes
depended upon the condition, that the holder
of the note should bring the change of a guinea
to the person who issued it; a condition
which the holders of such notes might frequently
find it very difficult to fulfil, and which
must have degraded this currency below the
value of gold and silver money. An act of parliament,
accordingly, declared all such clauses
unlawful, and suppressed, in the same manner
as in Scotland, all promissory notes, payable
to the bearer, under 20s. value.
The paper currencies of North America
consisted, not in bank notes payable to the
bearer on demand, but in a government paper,
of which the payment was not exigible till
several years after it was issued; and though
the colony governments paid no interest to the
holders of this paper, they declared it to be,
and in fact rendered it, a legal tender of payment
for the full value for which it was issued.
But allowing the colony security to
be perfectly good, L.100, payable fifteen years
hence, for example, in a country where interest
is at six per cent., is worth little more than
L.40 ready money. To oblige a creditor,
therefore, to accept of this as full payment
for a debt of L.100, actually paid down in
ready money, was an act of such violent injustice,
as has scarce, perhaps, been attempted
by the government of any other country which
pretended to be free. It bears the evident
marks of having originally been, what the honest
and downright Doctor Douglas assures
us it was, a scheme of fraudulent debtors to
cheat their creditors. The government of
Pennsylvania, indeed, pretended, upon their
first emission of paper money, in 1722, to
render their paper of equal value with gold
and silver, by enacting penalties against all
those who made any difference in the price of
their goods when they sold them for a colony
paper, and when they sold them for gold and
silver; a regulation equally tyrannical, but
much less effectual, than that which it was
meant to support. A positive law may render
a shilling a legal tender for a guinea, because
it may direct the courts of justice to
discharge the debtor who has made that tender;
but no positive law can oblige a person
who sells goods, and who is at liberty to sell
or not to sell as he pleases, to accept of a shilling
as equivalent to a guinea in the price of
them. Notwithstanding any regulation of this
kind, it appeared, by the course of exchange
with Great Britain, that L.100 sterling was
occasionally considered an equivalent, in some
of the colonies, to L.130, and in others to so
great a sum as L.1100 currency; this difference
in the value arising from the difference
in the quantity of paper emitted in the different
colonies, and in the distance and probability
of the term of its final discharge and
redemption.
No law, therefore, could be more equitable
than the act of parliament, so unjustly complained
of in the colonies, which declared,
that no paper currency to be emitted there in
time coming, should be a legal tender of payment.
Pennsylvania was always more moderate in
its emissions of paper money than any other
of our colonies. Its paper currency, accordingly,
is said never to have sunk below the
value of the gold and silver which was current
in the colony before the first emission of
its paper money. Before that emission, the
colony had raised the denomination of its coin,
and had, by act of assembly, ordered 5s. sterling
to pass in the colonies for 6s. 3d., and
afterwards for 6s. 8d. A pound, colony currency,
therefore, even when that currency was
gold and silver, was more than thirty per
cent. below the value of L.1 sterling; and
when that currency was turned into paper, it
was seldom much more than thirty per cent.
below that value. The pretence for raising
the denomination of the coin was to prevent
the exportation of gold and silver, by making
equal quantities of those metals pass for
greater sums in the colony than they did in
the mother country. It was found, however,
that the price of all goods from the mother
country rose exactly in proportion as they
raised the denomination of their coin, so that
their gold and silver were exported as fast as
ever.
The paper of each colony being received in
the payment of the provincial taxes, for the
full value for which it had been issued, it necessarily
derived from this use some additional
value, over and above what it would have
had, from the real or supposed distance of the
term of its final discharge and redemption.
This additional value was greater or less, according
as the quantity of paper issued was
more or less above what could be employed in
the payment of the taxes of the particular colony
which issued it. It was in all the colonies
very much above what could be employed
in this manner.
A prince, who should enact that a certain
proportion of his taxes should be paid in a paper
money of a certain kind, might thereby
give a certain value to this paper money, even
though the term of its final discharge and redemption
should depend altogether upon the
will of the prince. If the bank which issued
this paper was careful to keep the quantity of
it always somewhat below what could easily
be employed in this manner, the demand for
it might be such as to make it even bear a