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"The enterprizing colonists being generally destitute of families, Sir Edward Sandys, the treasurer, proposed to the Virginia Company to send over a freight of young women to become wives for the planters. The proposal was applauded, and ninety girls, young and uncorrupt,' were sent over in the ships that arrived this year (1620,) and the year following, sixty more, handsome and well recommended to the company for their virtuous education and demeanor. The price of a wife at the first was one hundred pounds of tobacco; but as the number became scarce, the price was increased to one hundred and fifty pounds; the value of which in money was three shillings per pound. This debt for wives it was ordered should have the precedency of all other debts, and be first recoverable."
The Rev. Mr. Weems, a Virginian writer, intimates that it would have done a man's heart good to see the gallant young Virginians hastening to the water side, when a vessel arrived from London, each carrying a bundle of the best tobacco under his arm, and taking back with him a beautiful and virtuous young wife.
So late as in the year 1732, an act was passed at Maryland, making tobacco a legal tender at one penny a pound, and Indian corn at twenty-pence a bushel.
Afterwards gold and silver became more plentiful. In 1652, a mint was established in New England, for coining shillings, sixpences, and three-penny pieces. In 1645, Virginia prohibited dealings by barter, and established the Spanish piece of eight, as six shillings, as the standard currency of that colony. In all the colonies the money of account was the same nominally as in England, but the coin was chiefly Spanish and Portugueze. But different colonies affixed various values to the dollar. In South Carolina, the dollar was estimated at 4s. 8d.-in Virginia and New England, at 6s.-in Pennsylvania, New Jersey, and Maryland, at 7s. 6d.—and in New York and North Carolina, at 8s.
Paper money was first issued by the State of Massachusetts in 1690. A public bank was established
in South Carolina in 1702, and issued £48,000 in bank bills, to be lent at interest, and sunk at the rate of £4,000 a year. Pennsylvania first issued paper money in 1723. The province of Virginia does not appear to have issued any paper money previous to the revolutionary war.
At the commencement of that war, paper money was issued upon the authority of Congress. This money was called continental money. The first issue was dated May 10, 1775, but the notes were not actually in circulation until the following August.
"The paper money issued by Congress during the war of the American independence, experienced no sensible depreciation before the year 1776, and so long as the amount did not exceed nine millions of dollars. A paper currency, equal in value to that sum in gold and silver, could therefore be sustained so long as confidence was preserved. The issues were gradually increased during the ensuing years, and in April, 1778, amounted to thirty millions. A depreciation was the natural consequence; but had the value of the paper depended solely on its amount, the whole quantity in circulation would have still been equal in value to nine millions, and the depreciation should not have been more than 3 to 1; instead of which, it was then at the rate of six dollars in paper for one silver dollar, and the whole amount of the paper in circulation was worth only five millions in silver.
"It is obvious that the difference was due to lessened confidence. The capture of Burgoyne's army was followed by the alliance with France, and her becoming a party to the war against England. The result of the war was no longer considered as doubtful, and sanguine expectations were formed of its speedy termination. The paper accordingly rose in value; and in June, 1778, although the issues had been increased to more than forty-five millions, the depreciation was at the rate of only four to one. From the end of April of that year, to the month of February, 1779, although the issues had been increased from thirtyfive to one hundred and fifteen millions, the average value in silver of the whole amount of paper in circulation exceeded ten millions, and it was at one time nearly thirteen millions, or considerably more than that which could be sustained at the outset of the hostilities. But when it was discovered that the war would be of longer continuance, confidence in the redemption of a paper money daily increasing in amount was again suddenly lessened.
"The depreciation was increased from the rate of six to that of thirty to one in nine months.
"The average value in silver of the whole amount of paper in circulation, from April to September, 1779, was about six millions, and it sunk below five during the end of the year. The total amount of the paper was at that time 200,000,000; and although no farther issues took place, and a portion was absorbed by the loan offices and by
taxes, the depreciation still increased, and was at the end of the year 1780, at the rate of eighty dollars in paper for one in silver. The value in silver of the paper currency was then less than two and a half millions of dollars; and when Congress, in March following, acknowledged the depreciation, and offered to exchange the old for new paper, at the rate of forty for one, the old sunk in one day to nothing, and the new shared the same fate."-Considerations on the Currency and Banking System of the United States, by Albert Gallatin, Philadelphia,
According to an estimate by the register of the treasury in 1790, the issues of continental money were as follows:
On the 31st May, 1781, the continental notes ceased to circulate as money, but they were afterwards bought on speculation at various prices, from 400 for one, up to 1,000 for one.
In the year 1781, the Congress granted a charter to be called the "Bank of North America." It was accordingly established in Philadelphia, and commenced business on Jan. 7, 1782. It obtained a charter of incorporation upon the ground that it would offer assistance to the States in carrying on the war. So profitable was the business that the early dividends were at the rate of 12 to 16 per cent. per annum. Upon an allegation that the bank had produced evil effects, its charter was repealed in Sept. 1785, by the state government of Pennsylvania; but it continued its business, claiming the right to do so under the act of Congress. In 1787, the bank was re-incorporated, and has been continued to the present day. Its operations are confined however to the state of Pennsylvania.
After the conclusion of the war it was provided by the constitution of the United States, that no state should coin money, emit bills of credit, make any thing but gold and silver coin a tender in payment of debts, or pass any law impairing the obligation of contracts; and the power to coin money, and to regulate the value thereof, was vested exclusively in Congress.
This article of the constitution has given rise to considerable discussion, as it involves the question whether Congress has the power to constitute a national bank. The following summary of the arguments on both sides is taken from Mr. Justice Story's "Commentaries on the Constitution of the United States."
"One of the earliest and most important measures, which gave rise to a question of constitutional power, was the act chartering the Bank of the United States in 1791. That question has often since been discussed; and though the measure has been repeatedly sanctioned by Congress, by the executive, and by the judiciary, and has obtained the like favour in the great majority of the States, yet it is, up to this very hour, still debated upon constitutional grounds, as if it were still new and untried. It is impossible, at this time, to treat it as an open question, unless the constitution is for ever to remain an unsettled text, possessing no permanent attributes, and incapable of having any ascertained sense; varying with every change of doctrine and of party, and delivered over to interminable doubts.
"The reasoning, upon which the constitutionality of a national bank is denied, turns upon the strict interpretation of the clause, giving auxiliary powers necessary and proper to execute the other enumerated powers. It is to the following effect. The power to incorporate a bank is not among those enumerated in the constitution. In the next place, all the enumerated powers can be carried into execution without a bank. A bank therefore is not necessary, and consequently not authorized by this clause of the constitution. It is urged that a bank will give great facility or convenience to the collection of taxes. If this were true,
yet the constitution allows only the means which are necessary, and not merely those which are convenient for effecting the enumerated powers. If such a latitude of construction were allowed, as to consider convenience as justifying the use of such means, it would swallow up all the enumerated powers. Therefore, the constitution restrains Congress to those means, without which the power would be nugatory.
"The reasoning by which the constitutionality of the national bank is sustained is, in part, contained in the following summary. The powers confided to the national government are unquestionably, so far as they exist, sovereign and supreme. It is not, and cannot be disputed, that the power of creating a corporation is one belonging to sovereignty. But so are all other legislative powers; for the original power of giving
the law on any subject whatever is a sovereign power. If the erecting of a corporation be an incident to sovereignty, and it is not prohibited, it must belong to the national government in relation to the objects entrusted to it. The true difference is this: where the authority of a government is general, it can create corporations in all cases; when it is confined to certain branches of legislation, it can create corporations only as to those cases. It cannot be denied, that implied powers may be delegated as well as express. It follows that a power to erect corporations may as well be implied, as any other thing, if it be an instrument, or means of carrying into execution any specified power.
"It is true, that among the enumerated powers we do not find that of establishing a bank or creating a corporation. But we do find there the great powers to lay and collect taxes, to borrow money, to regulate commerce, to declare and conduct war, and to raise and support navies. Now if a bank be a fit means to execute any or all of these powers, it is just as much implied as any other means. If it be 'necessary and proper' for any of them, how is it possible to deny the authority to create it for such purposes? There is no more propriety in giving this power in express terms, than in giving any other incidental power or means in express terms.
That a national bank is an appropriate means to carry into effect some of the enumerated powers of the government, and that this can be best done by erecting it into a corporation, may be established by the most satisfactory reasoning. It has a relation, more or less direct, to the power of collecting taxes, to that of borrowing money, to that of regulating trade between states, and to those of raising and maintaining fleets and armies. And it may be added, that it has a most important bearing upon the regulation of currency between the States. It is an instrument, which has been applied by governments, in the administration of their fiscal and financial operations; and in the present times it can hardly require argument to prove, that it is a convenient, a useful, and an essential instrument in the fiscal operations of the United States."
The constitution of the United States was adopted in 1789, and shortly after the government was organized. On the 14th of December, 1790, the then secretary of the treasury, (General Hamilton) reported to Congress the plan of a bank. In February, 1791, the bill passed, and was presented to General Washington for his approval. In the progress of the bill it was opposed by Mr. Madison, (subsequently president) Mr. Giles, and others, on the ground that the States had not delegated the power to create such an institution, and therefore that it was unconstitutional. It was supported by Mr. Ames, Mr. Boudinot, &c., who were members of what was termed, in those days, the high-toned federal party.