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Currency
An evaluation of the economic situation of Connecticut is fur- nished by the scarcity of coinage which was difficult to attract and impossible to retain. Instances of large sums of money in hand were rare. Theophilus Eaton, who was worth £4,000, invested about £3,000 in the colony, and when he died was worth £1,440, yet had only about $2.00 in money. Only 11 inventories of estates before 1649 showed the presence of money. This scarcity was derived from the exchange of money for provisions at the time of settlement, from the lack of com- modities to balance trade or to enable a direct trade with Europe, and from the undervaluation of coins as compared to commodities in official public transactions.97
The lack of coins led to the use of commodities in simple barter and to the designation of certain of them as a currency media. Wam- pum, or shell beads valued by the Indians, circulated as currency as long as the Indian trade was significant. Beaver, grains, livestock, prepared
PROPERTY OF HOLMES SCHOOL DARIER, CONIL
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HISTORY OF CONNECTICUT
meats and dairy products were also made receivable, by law, for taxes and all other public debts. These items were known as "country pay." Their acceptance in public transactions was compulsory and they alone could be so received and disbursed. At times it was required that they be acceptable in certain private transactions. New Haven, for example, in 1641, ordered that purchases and wages could be paid in corn or labor, at rates settled by the court. or in cattle. At least for one year, 1640-41, Connecticut made debts payable in Indian corn at 3 and 4 pence per bushel. Regularly, when prices, such as wages for labor, were fixed by the court, they were made payable in designated commodities. Custom, as well, required that commodities be accepted in private pay- ments unless contracts specified a different currency.98 Other items might by conventional use serve as well as currency even though they lacked official designation. Bullets, for example, apparently fulfilled this role for a period, especially in New Haven. The position of the officially designated commodities differed from others, for their acceptance by the government always assured a means of disposal: and the role of com- modities accepted primarily for exchange purposes differed from those used in simple barter to effect an exchange. In the latter case commodi- ties which each party expected to consume could be used.99
The intrinsic worth of the commodities employed as a medium of exchange had to be ascertained before they could be used as a standard of value. The designated products were assigned a legal price, at first in terms of the English pound and later in terms of the Massachusetts pine shilling. The commodities passed at legal values in public payments. As a general rule no one was forced to accept in private payments the products at the values set by the colony. The legal prices were higher than the market value. Although the Court attempted to control the supply of products used for money, there were variations in supply of these commodities as well as in the supply of others. These variables, as well as the price fixed by the court. affected market values. It was im- possible for the commodities to provide a fixed standard of value.100
The prices of commodities were governed according to the cur- rency offered in payment. The General Court conventionally fixed the prices of commodities fifty per cent higher than the money price. When country pay was offered for goods, then, the prices were proportionately
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higher than when metallic currency was used. English coins, the Massa- chusetts shillings, Spanish pieces-of-eight, and Spanish milled dollars, or talers, were used in securing the money price. By the end of the cen- tury the pieces of money were customarily weighed before acceptance, because clipping, washing, scaling, filing and the like had so reduced the intrinsic value. Apparently a third price, a trusting price, prevailed in credit transactions.101
The lack of currency was offset, in part, by a number of arrange- ments which obviated its use. At times, land was substituted by the government in payments to soldiers, ministers, and magistrates. In part, labor replaced money in the payment of taxes. Compulsory military service, with each citizen supplying his arms and stores, avoided money pay in most cases. Forced labor for road maintenance, again, avoided the necessity of a currency collection for this item. When forced labor was criticized because laborers did not always appear at the appointed time and because it burdened the poor disproportionately, either money or labor were allowed to meet these obligations. At times, exemptions of certain groups from rates reduced the need of currency, as in the case of the iron-workers exempted. It seems noteworthy that in 1658, in New Haven, it was requested that the deputies request the Court to provide another allowance for public service so that rates might be paid by all men. The feeling that all should contribute to the support of the government was strong. At times, labor was made a means of paying for purchases, also.102
The use of credit avoided the use of money. Occasionally several bills were cancelled by one payment, as when a debtor would pay a creditor's bill and so avoid multiple exchange of commodities. This was not restricted to private instances as is shown when the New Haven colony was indebted to the keeper of the town inn, the town was in- debted to the colony, and the citizens were indebted to the town for taxes. All of these debts were ordered cancelled if the taxpayers fur- nished the innkeeper with about forty bushels of wheat and rye. The use of commercial paper was significant, too. Bills of exchange, usually drawn by colonists on deposits lodged with an English agent, circulated widely. Local promissory notes were also used. These were especially prominent in New Haven. They were generally under £50 and fre-
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quently prescribed the commodity to be used in payment. They bore no interest, but the creditor could collect damages if they were not paid at a certain time. The payment of the signer to the final endorser was obligatory, with the intermediate endorsers guarded. So where the signer was highly regarded these circulated widely.103
The money required for wages was minimal. Indian and negro slaves were not paid wages. An initial expenditure for passage money may have been required to secure an indentured servant, but this was small and sometimes paid in England. Beyond this outlay and perhaps a small sum at the end of the service, the wage was the keep of the person. The same was true of the apprenticed laborer, which not only saved a monetary expenditure for wages, but reduced, too, the necessity of collecting taxes for poor relief.104
Although the lack of money was mitigated in these ways, its scarcity was felt to be an impediment to trade and attempts were made to increase the amount in circulation. Mercantilistic thought emphasized the need and value of having "treasure," and English thought105 in gen- eral and individuals such as Antonio Serra of Naples106 came to the con- clusion that this depended on commerce. Many, however, thought that commerce itself depended upon circulation, and that by increasing the quantity of the circulating medium manufactures and trade would be correspondingly increased.107 This idea was accepted in New England.
It was hoped to prevent specie from leaving the country, and, at the time, it was widely held that this could be accomplished by adjusting exchange rates. That exchange was responsible for a scarcity of coinage had been refuted by Serra in a treatise written and published in 1613. apparently while he was in prison in Naples-for coining.108 His argu- ment received approbation later, but received little attention from his contemporaries. In a brochure published in Boston and in London. however, John Blackwell had argued, as Serra, that adjusting the ex- change would not relieve a scarcity caused by an unfavorable balance of trade.109 Since prices merely adjusted to the rate, the country would continue to be drained of coinage. The colonists continued to regulate and adjust exchange hopefully. Connecticut continued the over-valua- tion "for the incouragemt of bringing in and keeping of money" until 1697, when such legislation was repealed as detrimental.110
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(Courtesy Conn. State Lib.)
MONTVILLE-MONUMENT IN HONOR OF LIEUT. THOMAS LEFFINGWELL IN FORT SHANTOK STATE PARK
Some attention was given, also, to increasing the circulating medium by the issue of paper money. The problem was to find a basis for it. The gamut of ideas included the use of personal credit, land, and deposits of goods as bases. This line of reasoning again arose from the mercantilistic emphasis on "treasure" but was later repudiated as a false extension that really contradicted its emphasis on specie. The proposals arose through a confusion of the meaning of specie and the considera-
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HISTORY OF CONNECTICUT
tion of it as synonymous with any circulating medium.111 Of influence in New England was the discussion, by William Potter in his The Key of Wealth, published in 1650, of a bank based on personal credit on de- posits of goods.112 This book was familiar to John Winthrop, Jr., of Connecticut who considered a land bank scheme for Connecticut in the 1660's, and elaborated the idea in correspondence to friends in the Royal Society. He believed that a currency needed for an enlarged volume of trade should take the shape of securities, based on property, and issued by a group of individuals forming a bank. The securities would not be redeemable until the end of a stated period. They might be issued for fairly large amounts and possibly would bear some relation to the property increase within the colony. Winthrop's suggestion was not implemented in Connecticut, although as late as 1668 he still hoped to proceed with it.113 His idea is important, however, for the insight it gives into the colony's economic problems and economic reasoning and for its contribution in the chain of ideas in the branch of theory advocating paper money based on something other than specie.114
Taxation
The duty of every Admitted Inhabitant to pay civil and ecclesiasti- cal taxes was explicitly stated in the Code of 1650. Theory held that the duty of every Inhabitant to contribute was derived from the benefits re- ceived from the government, and every able bodied male, sixteen years old and above, except magistrates and Elders of Churches, was required to pay a specified poll tax. The additional amount one paid was de- termined by ability, as gauged by the amount of land and other property possessed. One of the most significant features of the taxation lay in this broadening of the land tax base used in England and on the continent into a property tax upon all real and personal property. In the Code of 1650, a scale of rates was established for the taxation of cattle, and the rate of one penny for every twenty shillings held for "all other knowne estate whatsoeuer." Specifically included were the posses- sions of merchants "visible ... at sea or on shore," such as ships, merchantable goods, cranes, and wharves. Skilled craftsmen were rated, too, for their "returnes and gaines."115
Land, however, was the primary source of revenue. Frederick R.
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Jones concludes that New Haven introduced the principle of rating land, not by its value, but upon its probable revenue, and that this principle prevailed throughout the colonial period.116 It was in this manner that the French land tax, the taille, was levied in contrast to the English system where the rating of land according to acreage was re- placed by the system of rating it by value, which came to mean, rental value. Rented value would have had no validity in early Connecticut as a basis of estimated value. It would seem that Connecticut taxation might be interpreted as resting upon an estimate of capital valuation rather than upon revenue, but with the values determined, perhaps, with some view of expected productivity in mind. This seems implicit in the provision that the returns and gains of craftsmen would be rated "pro- portionably unto other men for the produce of their estates."117 Here the two rates seem to be balanced in terms of value received. This was not made explicit, however, in the Code. It was provided that all land, whether tilled or untilled, was taxable in accordance with a valuation estimated by three or four elected "able Inhabitants" of each town "according to juste valuation."118
The system of taxation was not affected by the charter of 1662, and alteration of the system was not considered until 1670. The rough man- ner of rating land had entailed much inequality in the land tax and pressure for reform led to the appointment, on October 13, 1670, of a committee of seven prominent men of the colony to recommend a just and equal appraisement to the General Court. No action seems to have been taken until October 23, 1678, when the report of a committee composed of entirely different personnel was adopted. By this, there were different rates for each town in the colony, and, in each, the valuation of land varied according to use, quality, location, and position. This complicated classification was not disturbed by Andros and con- tinued in effect through the end of the century.119
The early settlers of Connecticut were dedicated men who hoped to realize on earth eternal and immutable principles as they applied their theories of providence to the immediate problems at hand. The practical application to the realities of daily engagement in agriculture, trading, and industry represented an adjustment of the previously developed rationale to Connecticut conditions as certain regulations
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HISTORY OF CONNECTICUT
became unenforceable and new schemes were proposed. "As to the number of acres settled or unsettled or how much is manurable, we cannot guess," but it was understood that theirs was a "country, full of rocks, swamps, hills, and vales. Most that is fitt for planting is taken up. What remaynes must be subdued, and gained out of the fire as it were, by hard blowes and for small recompense." There recommendations for improvement were specific: adventures, money, and labor.120
NOTES-CHAPTER V
1 See R. H. Tawney, Religion and the Rise of Capitalism (New York, c. 1926), esp. pp. 3-9, 91 ff.
2 See Max Weber, The Protestant Ethic and the Spirit of Capitalism (Talcott Parsons, translator) (London, 1930).
3 Joseph Dorfman, The Economic Mind in American Civilization, 1606-1865, I (New York, 1946), pp. x, 3 ff .; Crane Brinton, Ideas and Men, p. 308.
4 For a summary discussion of mercantilism, see Lewis H. Haney, History of Economic Thought (New York, 1949), pp. 111 ff.
5 Bailyn, "New England Merchants," pp. 5-8, 44-52.
6 Dorfman, Economic Mind, I, p. 5.
7 Ibid.
8 Frederic Austin Ogg and Walter Rice Sharp, Economic Development of Modern Europe (New York, 1927), pp. 28 ff .; Andrews, Colonial Period, I, p. 387.
9 Dorfman, Economic Mind, I, pp. 11 ff .; Perry Miller, The New England Mind, from Colony to Province (Cambridge, Mass., 1953). pp. 40-43: Weber, The Protestant Ethic, P. 177.
10 Miller, New England Mind, pp. 40-43: Dorfman, Economic Mind, I, pp. 12-13; Bailyn, "New England Merchants," pp. 66, 73.
11 Ibid., pp. 52-122; Andrews, Col. Period of Am. Hist., I, p. 354.
12 Anthony N. B. Garvan, Architecture and Town Planning in Colonial Connecticut (New Haven, 1951), pp. 8-10; Bailyn, "New England Merchants," p. 102.
13 Ibid., pp. 65-69, 73-81, 125-26.
14 Garvan, Architecture and Town Planning, p. 10; Andrews, Col. Period of Am. Hist., I, 384, 387; Dorfman, Economic Mind, I, pp. 60-61.
15 Bailyn, "New England Merchants," pp. 96-97, 122; Dorfman, Economic Mind, I, pp. 5-8; Andrews, Col. Period of Am. Hist., II, pp. 146-47; Curtis Nettels, The Beginnings of Money in Connecticut (reprinted from the transactions of the Wisconsin Academy of Sciences, Arts, and Letters, Vol. XXIII, January, 1928), p. 1; Calder, The New Haven Colony, pp. 7-13, 29-30.
16 Bailyn, "New England Merchants," pp. 126-134 and passim.
17 Bidwell and Falconer, History of Agriculture, pp. 51, 52; Labaree, "Milford," Conn. Ter. Comm. Publ., pp. 4-9; William Haller, Jr., The Puritan Frontier, Town-Planting in New England Colonial Development, 1630-1660 (New York, 1951), pp. 23-27.
18 Bidwell and Falconer, History of Agriculture, pp. 53-54. 19 Labaree, "Milford," p. 10.
20 Bidwell and Falconer, History of Agriculture, p. 56.
21 Ibid., p. 55-
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22 Weeden, Economic and Social History, I, p. 405. 23 Haller, The Puritan Frontier, p. 105.
24 Bidwell and Falconer, History of Agriculture, p. 58; Weeden, Economic and Social History, I, pp. 50-60; Charles M. Andrews, The Connecticut Intestacy Law, Conn. Ter. Comm. Publ., p. 2.
25 Bidwell and Falconer, History of Agriculture, p. 58; Andrews, "Intestacy Law," p. 3.
26 Weeden, Economic and Social History, I, pp. 61 ff .; Conn. Col. Rec., I, p. 558.
27 Bidwell and Falconer, History of Agriculture, pp. 23-24.
28 Ibid., p. 58.
29 Conn. Col. Rec., II, pp. 200-201.
30 Bidwell and Falconer, History of Agriculture, pp. 54, 59.
Andrews, "Intestacy Law," pp. 5-7.
32 Deuteronomy, xxi, 17.
33 Andrews, "Intestacy Law," pp. 5-7; Collections, Conn. Hist. Soc., IV, p. 144.
34 Haller, The Puritan Frontier, p. 50; Stiles, History of Ancient Windsor, p. 42; Conn. Col. Rec., I, p. 12.
35 Andrews, Col. Period of Am. Hist., I, pp. 95-96; Conn. Col. Rec., I, pp. 11, 13, 16, 19; Dorfman, Economic Mind, I, pp. 48-50; Victor S. Clark, History of Manufactures in the United States, 3 Vols. (New York, 1929), I, p. 47.
36 Haller, The Puritan Frontier, pp. 16, 50; Weeden, Economic and Social History, I, pp. 38-43, 139; Miller, New England Mind, p. 44.
37 Conn. Col. Rec., I, pp. 58-61.
38 Ibid., p. 58.
39 Ibid., pp. 58-59; Miller, New England Mind, p. 50.
40 Clark, History of Manufactures, I, p. 82; Thomas Jefferson Wertenbaker, The First Americans, 1607-1690, A History of American Life, II (New York, c. 1927), p. 76; Conn. Col. Rec., I, pp. 61, 64.
41 Roland Mather Hooker, "The Colonial Trade of Connecticut," Conn. Ter. Comm. Publ., pp. 5-10; Henry Bronson, A Historical Account of Connecticut Money and the Finances of the Revolution (New Haven, 1865).
42 Hooker, Colonial Trade, pp. 9-10.
43 Curtis P. Nettels, The Money Supply of the American Colonies before 1720 (University of Wisconsin Studies in the Social Sciences and History), (Madison, Wisconsin, 1934), p. 102.
44 Hooker, Colonial Trade, pp. 1-5; Conn. Col. Rec., I, p. 116.
45 Hooker, Colonial Trade, pp. 5-7; Andrews, Col. Period of Am. Hist., II, pp. 167-68, 177-78; Calder, New Haven Colony, pp. 162-69; Weeden, Economic and Social His- tory, I, pp. 137, 154, 252-53, 408; Nettels, Money System, p. 117.
46 Hooker, Colonial Trade, pp. 7-10 ff .; Conn. Col. Rec., III, p. 297; Nettels, Money Sup- ply, pp. 106-107.
47 Ibid.
48 Corn paid two pence per bushel; biscuit, six pence a hundred; cows and horses within the river district, and hogs killed for home consumption or export, 12 pence per year. Beaver skins were taxed two pence a pound when traded within the limits of the river and 20 shillings a hogshead when exported. There were provisions for the elimination of the beaver tax if conditions in the Indian trade changed to warrant it. See Hooker, Colonial Trade, p. 5.
49 The Commissioners of the United Colonies charged that this, in effect, was asking Springfield to pay for the purchase of the fort at Saybrook, and denied that Connecti- cut had the legal right to make such impositions. When Connecticut continued to
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HISTORY OF CONNECTICUT
collect the duty, William Pynchon of Springfield was called before the Commission and agreed to the duties as being a moderate charge. After "the matter was weighed and considered with due tenderness," the duties were accepted with the stipulation that they would not be advanced and that Springfield would have the right to review them at the end of a year. Ibid., pp. 4-5.
50 Ibid .; Records of the Colony of New Plymouth, I, pp. 89-93.
51 Conn. Col. Rec., III, pp. 292-303; Hooker, Colonial Trade, pp. 13-14.
52 Conn. Col. Rec., I, p. 391.
53 Conn. Col. Rec., III, pp. 292-303; Hooker, Colonial Trade, pp. 11-12.
54 Weeden, Economic and Social History, I, p. 341.
55 Ibid., pp. 208, 311.
56 Conn. Col. Rec., I, pp. 527-28.
57 Ibid., II, p. 87.
58 Ibid., I, pp. 533-35.
59 Weeden, Economic and Social History, I, p. 209.
60 Hooker, Colonial Trade, pp. 35-36.
61 Conn. Col. Rec., III, pp. 292-303.
62 Weeden, Economic and Social History, I, p. 200.
63 Conn. Col. Rec., III, pp. 435-36, 439, 441.
64 Hooker, Colonial Trade, pp. 37-8.
65 Weeden, Economic and Social History, I, p. 276.
66 Weeden, Economic and Social History, I, p. 172.
67 Ibid., p. 193.
68 Conn. Col. Rec., IV, pp. 43-44.
69 Calder, New Haven Colony, p. 158.
70 Ibid.
71 Conn. Col. Rec., Vol. II, p. 108.
72 Clark, History of Manufacturing, Vol. 1, 45.
73 Conn. Col. Rec., Vol. III, p. 196.
74 Nettels, Money Supply, pp. 149-50.
75 Weeden, Economic and Social History, Vol. I, p. 253.
76 Ibid., pp. 170, 176-77, 304-6, 392-94; Nettels, Money System, pp. 149-50.
77 Calder, New Haven Colony, p. 156; Weeden, Economic and Social History, I, p. 185.
78 Ibid., p. 175; Clark, History of Manufactures, p. 66.
79 Conn. Col. Rec., II, pp. 324-25.
80 Ibid., IV, p. 74.
81 Ibid., pp. 82-3.
82 Clark, History of Manufactures, I, p. 66.
83 Conn. Col. Rec., I, pp. 67-8; Henry R. Stiles, The History of Ancient Wethersfield, 2 Vols. (New York, 1904), I, p. 646.
84 Dorfman, Economic Mind, I, pp. 11-12.
85 Conn. Col. Rec., I, pp. 105, 539.
86 Weeden, Economic and Social History, I, pp. 274-75; Dorfman, Economic Mind, I, p. 43; Conn. Col. Rec., I, pp. 105, 222.
87 Weeden, I, p. 274, note.
88 Conn. Col. Rec., I, p. 316.
89 Dorfman, Economic Mind, I, pp. 11-12.
90 Weeden, Economic and Social History, I, p. 103.
91 Conn. Col. Rec., II, p. 308.
92 Ibid., pp. 308-9.
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93 Weeden, Economic and Social History, I, p. 403.
94 Ibid., p. 149, note.
95 Ibid., pp. 104, 166-67; Dorfman, Economic and Social History, I, pp. 45-46; Conn. Col. Rec., I, pp. 61, 65-66, 205.
96 Weeden, Economic and Social History, I, p. 83.
97 Nettels, Beginnings of Money, pp. 1-4; Nettels, Money Supply, pp. 106-7.
98 Ibid., pp. 209-11; Nettels, Beginnings of Money, pp. 5, 7-10; Bronson, Connecticut Money, pp. 4-8.
99 Nettels, Beginnings of Money, p. 5; Alice Morse Earle, The Sabbath in Puritan New England (New York, 1891), p. 117.
100 Bronson, Connecticut Money, pp. 3, 19; Nettels, Money System, pp. 209-11; Nettels, Beginnings of Money, pp. 10-11, 16-18.
101 Bronson, Connecticut Money, pp. 20-23 ff.
102 Nettels, Beginnings of Money, pp. 24, 28; Nettels, Money Supply, pp. 224-226.
103 Nettels, Beginnings of Money, p. 25; Nettels, Money Supply, pp. 224, 250.
104 Ibid., p. 225; Nettels, Beginnings of Money, pp. 18-24.
105 Early advocates in England included Thomas Mun, Sir Josiah Child, and Sir William Petty.
106 Antonio Serra, "A Brief Treatise on the Causes which can make Gold and Silver Plentiful in Kingdoms Where there are no Mines," (1613), extract quoted in Arthur Eli Monroe, Early Economic Thought (Cambridge, 1951), pp. 154-167.
107 Haney, Economic Thought, p. 126.
108 This had been written in answer to de Santis' argument that high exchange we re- sponsible for the scarcity of money.
109 Dorfman, Economic Mind, I, pp. 98 ff., 102.
110 Conn. Col. Rec., IV, pp. 166, 176, 180, 197-98.
111 Haney, Economic Thought, pp. 126-27.
112 Weeden, Economic and Social History, I, pp. 317-20; Dorfman, Economic Mind, I, pp. 93-94.
113 Weeden, Economic and Social History, I, pp. 317-20; Nettels, Beginnings of Money, p. 26; Nettels, Money Supply, p. 252.
114 In Massachusetts, such a bank seems to have been in operation for a short period, 1681-82, as a result of the efforts of Reverend John Woodbridge, a personal friend of Potter's, and involving Adam Winthrop, half-brother to John Winthrop, Jr., of Con- necticut. In 1686, a new project was proposed by John Blackwell and was sanctioned by the Council, but never actually got underway, possibly becoming involved in Andros' fall. A similar scheme was established in the Barbados in 1661 as an ex- periment. Perhaps the most famous implementation of the idea was that of John Law in France much later. Nettels, Money Supply, p. 252; Dorfman, Economic Mind, I, pp. 93-111; Haney, Economic Thought, pp. 126-27; Weeden, Economic and Social History, I, pp. 317-20.
115 Conn. Col. Rec., I, pp. 547-551.
116 Frederick Robertson Jones, History of Taxation in Connecticut (Baltimore, 1896), pp. 11, 15-16.
117 Conn. Col. Rec., I, p. 549.
Ibid., p. 548.
119 Jones, History of Taxation, p. 17.
120 Conn. Col. Rec., III, pp. 294-300.
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