USA > Massachusetts > Commonwealth history of Massachusetts, colony, province and state, volume 3 > Part 32
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The Massachusetts soldiers who, for the most part were merged into the Continental Army, could not be aided by any such direct method. Indirectly, many of the towns endeavored to increase the pay of soldiers by supplementary wages and . by bounties at time of enlistment. Braintree, for example, in 1778 voted to add to the state allowance, so as to make the minimum amount £6 per month. Shortly afterwards (1780), when paper money had little purchasing power, the town agreed to give a bounty of $1,000 and to add half a bushel of corn per day and forty shillings per month to the pay.
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EFFORTS TO CONTROL PRICES
The town records of Chelsea furnish an amusing illustration of the confusion which frequently arose in making these special grants. On January 29, 1781, this town voted to give to eight soldiers, that were to enlist in the Continental service for three years or during the war, eight calves each, to be raised, kept and delivered to each of the soldiers at the end of the three years. Again in the same year it voted to give John Sack 100 hard dollars and four heifer calves to be kept and delivered to him at the end of three years as a bounty. Later, January 17, 1784, it modified its original promise, the vote reading: "Not to give John Sack $30 in lieu of two of the heifers that the town owed to him."
EFFORTS TO CONTROL PRICES (1776 - 1779)
By January, 1776, public faith began to waver; and from then on the legislature endeavored, by ardent appeals to patri- otism, warnings, and threatened punishment, to check depre- ciation. Individuals were "marked" who declined to receive the bills; committees were appointed to detect these "enemies to the country"; detailed price lists were framed to govern the buying and selling of commodities; and wages were set by law.
Legislation as to prices to prevent monopoly and extortion was minute and specific in its provisions. The act of January 25, 1777, prescribed the maximum price of more than fifty staple articles: "Good well fatted grass-fed beef at 3d. a lb. and stall-fed beef well fatted at 4d. a lb. and beef of inferior quality in equal proportion"; "good merchantable imported salt, at 10sh. a bushel, salt manufactured from sea water within the state at 12sh. a bushel." A convention at Concord in 1779 established the prices of meals at taverns: an "extra good dinner, £1; common, 12sh .; best supper and breakfast, 15sh .; common, 12sh .; West India flip, 15sh. per mug."
Even before the independence of Massachusetts was de- clared, April 13, 1776, the legislature passed an act providing that a citizen who should receive as pay any of the bills for a less sum than that expressed on the notes, should be incapable for ever after of holding any civil or military office in the colony. A fine of £20 was imposed for offering merchandise
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for a less sum in silver or gold than in the currency of the United Colonies.
In 1779 the legislature took still more active measures to uphold the credit of paper money. Penalties of £50 to £500, or for want thereof imprisonment, were imposed upon any person who used any means "to hurt or destroy the credit of the public bills of this state or of the United States."
Those who raised prices were regarded in the words of a broadside poster, as "monopolizers and extortioners, who, like canker worms, are gnawing upon your vitals. They are re- ducing the currency to waste paper by refusing to take it for many articles. We have borne with such wretches but will bear no longer. Public examples are public benefits. You then that have articles to sell, lower your prices; you that have houses to let, refuse not the currency for rent; for, in- spired with the spirit of those heroes and patriots who have struggled and bled for their country, and moved with the cries and distresses of the widow, the orphan and the necessi- tous, Boston shall no longer be your place of security."
THE LAST STAGE (1780 - 1789)
After 1780, both the Continental Congress and the individ- ual states were more sparing in their issues of notes of small denominations which might pass into circulation; and if there had not been such large amounts already afloat, some progress might have been made in reestablishing public credit. A con- siderable quantity of specie drifted into the country from the British and French armies, and also from captures on the high seas. But it did the government little service. As one writer expresses it: "While it passed freely among the popula- tion, not a dollar of it could be found in the state treasury, because a thousand claims stood then unsatisfied, and ready to seize upon it, as soon as its sound was heard."
The return to paper money revived the practice of counter- feiting. Irredeemable bills of credit deranged business, but the disturbance was greatly increased by the circulation of illegal notes. Efforts were made to prevent this result, but the state government was ill-prepared in the early years of the war to cope with this evil, and appeal was made to local au- thorities. For example, a counterfeiter in one of the towns,
347
LEGAL TENDER FOR TAXES
convicted of raising a six-penny note to six pounds, was "whipped thirty and six stripes on the naked body" and con- fined in the town "with liberty to go one mile north from his house for the space of a year and a half."
TAXATION (1777 - 1780)
Beginning with 1777, more vigorous attempts were made to raise revenue by taxation. Two levies were imposed call- ing for $1,413,000; in 1778, two levies, $1,698,000; in 1779, three levies, $28,530,000; and in 1780, three levies, $37,670,- 000. These large amounts, however, had little significance, on account of the increasingly depreciated paper money in which taxes were paid. In 1780 the ratio of depreciation was at least forty to one, so that a tax of $38,000,000 amounted to less than $1,000,000 in specie.
The laying of taxes was unsuccessful for two reasons. In the first place it was difficult to collect the taxes. Business was so disordered by the war and by the continental changes in the value of the pound or dollar that taxpayers found it difficult to meet their obligations. The experience of the town of Truro, on Cape Cod, is typical. The inhabitants petitioned the legislature that it was impossible for them to pay their taxes. The harbor was open to the enemy to land and rob them of their stock and burn their buildings. For four years "our constables cannot gather enough to support our revered pastor"; the town treasury was empty; the schools had been closed for six months; necessary town charges were unpaid; poor families, widows and fatherless children de- pended on the charity of the town; and "the greatest part of our men have gone into the war." In the second place, as prices were continuously rising, the purchasing value of the taxes to be used by the state government was much less by the time they were collected.
LEGAL TENDER FOR TAXES (1780)
In 1780, the futility of taxes payable in worthless paper money was recognized, and the General Court ordered an an- nual tax of £72,000 ($240,000) running for seven years, pay-
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ECONOMIC CONDITIONS
able in specie, to be used to redeem outstanding notes and to pay interest on loans. This was a step in the right direction, but the imposition of the tax was easier than its collection. Tax collectors and constables appeared to be powerless. Again, an appeal was made to patriotism. The General Court, reorgan- ized under the new Constitution of 1780, on October 25, in an address to the people declared : "We conjure you by all the ties of honor and patriotism to give up every consideration of pri- vate advantage; and that, without delay, you assist in supply- ing the treasury, as it is impossible to support an army if the people withhold their taxes."
In the hope of securing more prompt payment of taxes, the legislature in 1780 permitted taxpayers to pay in fourteen different commodities, at certain fixed rates. For example, pork would be accepted at £4 per barrel and wheat at 8sh. per bushel. Taxpayers, however, tending such commodities, had to pay the charges of transporting the goods to a public store. This method of "easy payment" of taxes was continued for several years, and the list of accepted commodities ex- tended. In 1786, taxes could be paid in forty articles, includ- ing various sizes of nails, running from four-penny to twenty- penny. Eighteen public stores were distributed throughout the State.
DISTRIBUTION OF TAXABLE WEALTH (1781)
The distribution of the assignment of taxes to the several counties and towns throws light upon the valuation of prop- erty and taxable wealth in different sections of the state. In 1781, Essex County bore the largest amount of any county, £46,280. Suffolk County followed second, £44,866. A com- parison with the respective numbers of taxable citizens in the two counties, however, shows that the per capita wealth in Suffolk County was considerably greater than that of its northern neighbor. Worcester and Middlesex Counties ranked third and fourth in the distribution of taxes, with levies of £44,582 and £39,000 respectively. These four counties to- gether bore more than one half of the total tax.
Among the towns the share of Boston was the largest, £20,000; followed by Salem, £6,700; Dartmouth, £4,400;
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REVENUE FROM IMPORT DUTIES
Bridgewater, £4,300; Newburyport, £4,100; Ipswich, £3,900; Beverly and Newbury, £3,300 each; Middleboro, £3,200; and Andover and Sherburne (Nantucket) £3,100 each. No other town paid as much as £3,000. Boston was assessed more than all the twenty-five towns of Berkshire County, and more than either Plymouth County or Bristol County.
REVENUE FROM IMPORT DUTIES (1774 - 1784)
As early as 1774, Massachusetts showed a liberal spirit in establishing commercial relations with foreign countries, for in that year import duties were omitted in the laws for col- lecting revenue. The colony's experience with English duties had caused resentment, and freedom in trade was welcomed. Obviously commerce was restricted during the war; though foreign powers seized the opportunity to engage in trade which had been denied while the colonies were subject to English rule.
The financial difficulties of the new state, however, led to a change of policy. In 1782 the legislature, in seeking addi- tional revenue, reimposed tariff duties on imports. This was done with regret, for the preamble of the act declares that restrictions upon trade have been found to be highly inju- rious and good policy requires that the embarrassments thus arising should continue no longer than the necessities occa- sioned by war. Duties were therefore collectible only till six months after peace. The tariff rates were low: wines, tobacco, tea, sugar, iron, coaches, and a few other articles paid specific duties ; other commodities paid from 212 to 5 per cent on their value.
When peace came, the attitude of the legislature changed. English merchants, deprived of their colonial market for seven years, took quick advantage to reestablish trade with the United States and flooded the eastern ports with wares at prices which threatened to ruin domestic manufacturers. Tariff duties were increased in 1784. The rates on paper, candles, soap, linseed oil, leather, beef and pork were raised from 21/2 to 71/2 per cent; and on coaches, carriages, harness, saddles, boots, shoes, and plated ware, a duty of 121/2 per cent was placed.
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ECONOMIC CONDITIONS
POLICY OF PROTECTION (1785 - 1786)
Two years later the policy of protection to domestic in- dustry was more openly avowed. It was then held "highly necessary for the welfare and happiness of all States, and more especially such as are republican, to encourage agricul- ture, the improvement of raw materials and manufactures, a spirit of industry, frugality and economy, and at the same time to discourage luxury and extravagance of every kind." Additional duties were therefore imposed running as high as 25 per cent on some articles; and the schedule of specific rates was enlarged.
Restrictive legislature was to go still farther. The return of the loyalists, many of whom were well supplied with funds, while the colonists were making sacrifices for sustain- ing the war, contributed to large expenditures for English goods. In the words of a Boston patriot: "On their return from England every species of luxury was introduced here and every kind of gew-gaw imported into this town with a purpose to drain us of our specie. Do we not know that in almost every ship that sails for England large sums of solid coin are exported to pay for these goods? Do we not know that large duties are laid upon our goods sent thither which amount to nearly a prohibition and shall we be so infatuated as to continue our intercourse with that nation who endeav- ored to enslave us by the sword, but not succeeding, are now trying imperceptible but more sure means." The Boston newspapers of this period were filled with notices, advertising the sale of jewelry, silks, millinery, and broadcloths.
In a handbill in the Boston Independent Chronicle, April 8, 1785, is this passage: "Study to discourage the British traders as their Parliament have discouraged your commerce. Bid them depart in peace, their persons sacred, their property inviolate. But let them not remain to undermine the basis of our empire by silently sucking the blood of each individual. 10,000 suits of clothes have this day arrived from Halifax; 10,000 more are hourly expected. Your trade is dead, your mechanics are beggars. Then rouze in the moment. Awake or be forever lost."
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PLIGHT OF THE GOVERNMENT
PROHIBITION OF IMPORTS (1786 - 1789)
The agitation for further restriction was also promoted by British regulations governing trade with the British West Indies. Trade with these islands had been profitable before the war, but England now restricted it entirely to British shipping, a policy maintained until 1828. Massachusetts in particular suffered from this regulation.
Aroused by these influences, the legislature in 1786 entirely prohibited the importation of fifty-eight different commodities. In this list of contraband articles were fur and wool hats, boots and shoes, millinery, lace, leather gloves, shell combs, hairpowder, perfumery and other articles of personal luxury. Among prohibited food commodities were loaf sugar, beer and ale, butter, cheese, and mustard. Exclusion also applied to spelling books, novels and plays, toys, paper hangings, manufactured tobacco.
This policy had a twofold object: the protection of new manufactures and the restraint of extravagant expenditures. Massachusetts was therefore prepared, when the new federal Congress debated the first tariff act of 1789, to give support to the clauses which would protect her domestic industries.
FINANCIAL PLIGHT OF THE GOVERNMENT (1781 - 1787)
The financial plight of the new state seemed to be well-nigh hopeless. The debt in 1781 was $4,000,000 and the valuation of property subject to taxation was nominally only $11,000,- 000. Even the tax levied in 1781 was not sufficient for cur- rent expenses, and further debt must be incurred. Between 1780 and 1785, about a fifth of the taxes levied could not be collected. Popular opposition was so strong that the legis- lature suspended the collection of taxes for the retirement of notes which represented past indebtedness; and in 1785, neglected to levy any tax at all, even for meeting current ex- penses.
Although Governor Bowdoin besought the legislature at least to enforce taxation for payment of past debt, in accord- ance with the pledge made in 1780, the General Court ordered the treasurer to issue no warrants for the collection of taxes, and declared that the Commonwealth could not meet outstand-
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ECONOMIC CONDITIONS
ing liabilities, even if existing laws so demanded. The only redeeming feature in this policy of inaction was the refusal of the legislature to resort again to further issues of bills of credit. Again, in 1787, no tax was levied for current expenses, although Governor Hancock in his annual message stated that "the treasury is so far exhausted that the business of the government must cease its progress."
THE STATE DEBT (1781 - 1789)
Little headway could be made in establishing a sound sys- tem of state finance as long as the huge cloud of indebtedness hung over the treasury. Citizens refused to pay taxes when more than half the revenue disappeared to meet the interest, and there appeared to be scant opportunity to decrease the principal of this debt. The outstanding securities or notes of the state, which were evidences of the debt, were selling below their face value.
In many cases, they were now in possession of those who did not make the original loan to the state, but who had pur- chased them in the hope of making a speculative profit if redeemed at par. The sanctity of state credit was as yet little understood; and the citizens were not inclined to assist in an undeserved profit to those who traded in government securities. The soldiers had received their pay in money which was almost worthless; their families had suffered and many of them were plunged into debt. Why should those who had been wealthy enough to loan to the state government be repaid in full, particularly when a large part of the taxes to repay the loans fell upon these soldier families?
The state debt, in 1786, amounted to £1,632,000 ($5,440,- 000, reckoning $3.33 to the pound) in specie value; and in addition there was an estimated liability to the Continental Government of nearly as much more. Reckoned in terms of dollars, the total debt was $11,600,000. To carry this debt would require an annual interest of less than $2 per capita. Judged by modern methods of public financing, this was not an overwhelming burden, but to the citizens of that first dec- ade of independence it appeared to be a staggering load.
Even as late as 1790, there was difficulty in collecting taxes for current expenses, to say nothing of taking care of the debt.
3 Exchange Li30.3.8 fry e Boston Jany 16.4/66
Thirty Days after Sight of this my Third Bill (Sist Buona of the same Jenon & date unpaid ) Phase to pay to Med Barnards Harrison Merchants in London of their order One Thousand three Hundred Forty Sounds three Shillings Flight pence curling being for bash advanced by The Handckie: I myself for purchasing Provisions you your Virtualling Contract in Nova Scotia & Charges attend? in to 25 th Juneblad the Time I took your Contract bis the balance of account due to us to that Time as by particular uht of the whole transmitted you of this date from
your
0
our most obed Servant John Hancock revon of the HamachiGo
Matthew Woodford Eg
at Southampton
From an original
Courtesy of Massachusetts Historical Society
BILL OF EXCHANGE
353
SALE OF LAND IN NEW YORK
Taxes were in arrears, and the legislature asked the governor to remove county sheriffs who failed to force town collectors of taxes to do their duty. So strained was the treasury that the legislature once more resorted to authorizing a lottery.
FINANCIAL RELIEF (1790 - 1800)
Fortunately relief soon came. The new federal govern- ment, established in 1789 recognized that existing state in- debtedness was largely incurred in a common cause and that equity demanded that the state debts be pooled together, as- sumed and finally liquidated by the nation as a whole. This action lifted $4,000,000 from the shoulders of Massachusetts. Moreover, the final settlement of accounts between the state treasury of Massachusetts and the former Continental Con- gress, disclosed a balance due to the state, amounting to $1,240,000.
The State treasury was also strengthened by dividends which it received from investment in the stock of the Union Bank (1794) and by sale of lands in Maine and western New York. By the end of the century, the State was practi- cally free from debt; and then its financial worries created by the Revolution were at an end.
SALE OF LAND IN NEW YORK
The claim of Massachusetts to the ownership of land lying in western New York went back to the terms of the early royal charters, and is elsewhere considered in this volume as a ques- tion of boundaries and sovereignty. Financially the story is brief and simple. Under the settlement with the United States and New York, under date of April 1785, ownership rights of considerable value remained in Massachusetts. It was unsettled country; few white men, except soldiers and trappers, had visited it. Those were days of risk and adventure, and speculation in land was one of the chief outlets of business enterprise. In 1788, two citizens of Massa- chusetts, Nathaniel Gorham of Charlestown and Oliver Phelps of Granville, agreed to purchase the rights which the State held to the western land. The price was $1,000,000 flat; but
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ECONOMIC CONDITIONS
payment could be made in certain forms of state securities which were much below par.
The new owners immediately by purchase extinguished the Indian titles to nearly half of the total area, and opened the land to settlement. Many emigrated from Sheffield, North- ampton and Springfield. Phelps and Gorham, however, were unable to meet their obligations to the State, for the state securities or scrip, in which payment was permitted, rapidly rose in value. Soon after the land purchase was made, Gor- ham and Phelps therefore reconveyed back to the State that portion on which Indian titles had not been extinguished. This was later sold to Robert Morris, the former treasurer of the Continental Congress. The whole transaction furnished a striking illustration of the uncertainties of business trans- actions when credit was unstable and the population was seek- ing new homes.
MATERIAL PROGRESS (1778- 1781)
The foregoing description of the financial operations of the state governments presents a dark and depressing picture, and does not do justice to the brighter aspects of the social and economic life of the Commonwealth. During this period, notwithstanding the financial blunders made by citizens when associated together for handling the affairs of government, the community as a whole made marked progress in material prosperity. War stirred the population to new efforts and set in motion activities which extended business enterprise.
Only a small portion of the state, Boston and its immediate vicinity, was the scene of actual warfare; and after the first two years, even that limited area was free from the destruc- tive ravages of war. As early as 1777 a leading Boston mer- chant wrote to a correspondent in England: "Though our money has depreciated, the internal strength of the country is greater than when the war began; and there is hardly a town that has not more ratable polls than at that time. And though many individuals suffer, yet the farmer and the bulk of the people gain by the war." Before describing some of the characteristics of this development of business activity, a brief statement should be made in regard to the changes in population.
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POPULATION
POPULATION (1781 - 1790)
When Massachusetts entered upon the Revolutionary strug- gle, its population was nearly 300,000 (excluding Maine), or about one-tenth of the total number of inhabitants in the thirteen colonies. Only Virginia and Pennsylvania contained a greater number. The Indian population had nearly disap- peared; it could not have been more than 1500, and these were for the most part located in the coast towns south of Boston and on Cape Cod. Of negroes there were about 5000; many of these were slaves, but the state constitution adopted in 1780 did away with bondage; and in the census of 1790, Massachusetts was the only state which returned no slaves. The white population was largely of British stock, making a homogeneous group, with common traditions, simi- lar habits of thought and economic aptitudes.
The population in 1781 was scattered over 236 townships. It reached what is now the New York border, but the greater number was concentrated at the eastern end of the state. In the counties on the coast lived 170,000; 90,000 in the counties of Middlesex and Worcester; and 33,000 west of the Connec- ticut River.
Just before the Revolution, Boston, the largest town, in- cluded nearly 15,000 inhabitants. Next came Dartmouth, in Bristol County, with about 7,000; and then there was Salem with a little over 5,000. Seven towns-Ipswich, Marblehead and Gloucester in Essex County ; Bridgewater and Middleboro in Plymouth County; Rehoboth in Bristol County, and Sher- burn (Nantucket) in Nantucket County-lay within the 4,000 to 5,000 stratum.
Although Massachusetts furnished more troops in propor- tion to her population than any other state, suffered more in casualties of war, and lost a considerable number by the emi- gration of Tories, the population increased during the Revo- lution; and in the later years of the war showed more men of military age than at the beginning. Young men in their military campaigns travelled far in those days; new oppor- tunities for settlements were discovered, and the spirit of enterprise inspired the establishment of new homes when the war was over.
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