USA > Massachusetts > Suffolk County > Professional and industrial history of Suffolk County, Massachusetts, Volume II > Part 16
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We must recall one event, however, perhaps the most momentous in the history of Boston as a city, and of its trade-the fire of the 9th and 10th of November, 1822. The territory devastated by this fire was about
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sixty-five aeres, comprising thirty streets and containing between seven and eight hundred buildings. With the exception of a few streets near the water, this area was wholly devoted to business purposes, and the buildings which covered it, in size and architectural effect, were unsur- passed, and perhaps unequaled, by those of any other city in the world. Here was concentrated the wholesale trade in hides, leather and shoes, in dry goods, domestic and foreign, in wool, in ready-made clothing, in hardware, and in part in earthenware and china. The value of the property destroyed was out of all proportion, therefore, to the extent of the land burnt over as compared with the great fires of other cities. The loss was variously estimated at from sixty to seventy mill- ion dollars, but there was a vast amount of property destroyed-papers, portraits, antiquities, libraries, on storage-the value of which could not be estimated in figures .. The blow was a terrible one to the busi- ness men of the city, but never for a moment did they lose heart. The work of rebuilding was entered upon without delay, and soon the terri- tory was built over again, but with wider streets and more stately warehouses than those which had been swept away. To many individ- uals and firms the loss was irretrievable, but the business community, as a whole, proved its inherent vitality and soundness by its recovery from the disaster in a marvelously short time. The terrible eclipse which shadowed the general prosperity soon passed off, and in a very few years hardly a trace remained " of that dark hour of destiny."
We enriched one of our earlier pages with a quotation from Emerson. In closing our sketch of the commercial enterprise and activity of our city, we cannot do better than to reproduce other words written by the same shrewd observer and profound thinker in the spring of 1861. The message was addressed to another generation of Bostonians, but it may not be altogether without meaning or value to the ear of that upon which the responsibility rests for what the eity is to become in the twentieth century :
"And thus our little eity thrives and enlarges, striking deep roots and sending out boughs and buds, and propagating itself like a banyan over the continent. Greater eities there are that sprang from it, full of its blood and names and traditions. It is very willing to be out- numbered and outgrown, so long as they carry forward its life of civil and religious freedom, of education, of social order, and of loyalty to law. It is very willing to be outrun in numbers and in wealth, but it is very jealous of any superiority in these its natural instincts and
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privileges. You cannot conquer it by numbers, or by square miles, or by counted millions of wealth. For it owes its existence and its power to principles not of yesterday, and the deeper principle will always prevail over whatever material accumulations.
"As long as she cleaves to her liberty, her education, and to her spiritual faith as the foundation of these, she will teach the teachers and rule the rulers of America. Her mechanics, her farmers, will toil better; she will repair mischief; she will furnish what is wanted in the hour of need; her sailors will man the Constitution, her mechanies re- pair the broken rail, her troops will be the first in the field to vindicate the majesty of a free nation, and remain last in the field to secure it. Her genius will write the laws, and her historians record the fate of nations. "
THE FINANCIAL HISTORY OF SUFFOLK COUNTY.
COMPILED BY OSBORNE HOWES, JR., and MOSES WILLIAMS.
Two hundred and sixty-two years have passed away since the foundation of Boston, and although this seems a long time, yet if a human life is taken as the term of measurement, it is found that the period since Boston was first settled is no more than five successive human lives of fifty-two years each. Viewed in this way the changes which have been brought about during the interval are both wonderful and enormous.
These have been the results of human effort exerted at first under conditions of great difficulty and hardship, but later under the extra- ordinary stimulus of public education, free institutions, and admirable opportunities for the acquisition of wealth.
It is proposed in this paper to briefly review the progress of our city in its financial aspect, bearing in mind that the results of human effort for any long period of time are best measured as the fruits of successive human lives, and that in this way it is possible to secure some guide to the probable Boston of the future.
The first element in a financial system is money; and in going back to the early days of our city we find that this was a subject of great in- terest and importance to its founders. These no doubt brought with them from the mother country a few of the stamped coins of the time, but in amounts evidently insufficient for the needs of a growing and trading community. They found on arriving here that Europeans who had visited America, trading along the coast for fish and peltry, had been accustomed to use in bartering with the natives, beads, knives, hatchets, blankets, and especially tobacco, powder, shot, guns, and al- coholie beverages. There were not only philanthropie reasons for a discontinuance of the latter practice, in consequence of its demoraliz- ing effect upon the Indians, but it was also evident that to supply their possible enemies with powder, shot and guns, was to jeopardize the future safety of the settlements. In trading among themselves the set-
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thers could resort in part to barter, exchanging hardware for boots and shoes, or household utensils for Indian corn, oats, and potatoes; but this method, although maintained for a long period of time, was unsatis- factory, and by unconscious consent wampum seems to have been adopted as a medium of currency with which trade transactions were carried on, not only with the Indians, but among the white people as well.
Roger Williams in his observations on the money of the Indians said : " This is of two sorts; one white, which they make of the stem or stock of the periwinkle when all the shell is broken off, and of this sort six of their small beads, which they make with holes to string their bracelets, are current for a penny. The second is black, inclining to blue, which is made of the shell of a fish which some English call . hens-poqua- hock,' and of this sort three make an English penny. One fathom of this string of money is worth 5 shillings."
This was a crude form of currency, but perhaps the best that could then be obtained. It was utilized in the same way that during the carly days of the war postage stamps were used by our people to make good deficiency in change. Apparently the Pequots and Narragansett In- dians, who manufactured this form of currency, prospered by it, for ac- cording to the chronicles of the times they grew rich and potent, whereas the rest, who were without these advantages, remained poor and beg- garly.
Besides this wampum and the occasional use of peltry, it was deemed desirable to make use of the products of the ground in payment for standard services. It was a custom when a surveyor ran the lines of a lot of land to compensate him with a peek of corn. The records of the Massachusetts Colony give a great number of instances where grain, salt fish, meal and other commodities were used in payment of taxes, official fees, and for other services. Thus in 1630 Sir Richard Salton- stall was fined six bushels of malt for his absence from court, while in the following year the Indian Chief Chickatawbut was fined a skin of beaver for shooting a swine of the same Sir Richard.
Great trouble was experienced by the carly settlers of Boston in keep- ing such coin as they had in this country. The Gresham law, which affirms that where several forms of eurreney exist, the most valuable will find its way into export, was apparently brought into play in these early colonial experiences. Thus on March 6, 1632, the magistrates enacted the following: " It is ordered, that no planter within this juris-
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diction returning for England shall carry money with him without leave from the governor under pain of forfeiting the money so intended to be transported." How far this acted as a restraint it is impossible to say, but it is known that traders, who were not planters, within the juris- dietion of the colony, preferred to take beaver skins or silver in return for their purchases, and that these two forms of currency were con- stantly tending to diminish both in Boston and the surrounding con- try.
It became necessary, as the use of perishable commodities in the way of barter tended to increase, to lay down some definite basis of ex- change; hence the price of corn was set at a certain rate per bushel, and the same restrictions applied to other commodities. Corn was at that time the leading farm product, and was thought to be better adapted than anything else as a substitute for specie. In view of its great de- mand for these purposes no person was, by order of the magistrate, al- lowed to feed his swine with it " except such as is surveyed by two of his neighbors and by them judged unfit for man's meat." Knowing that the prices for mechanical employments were likely to be disar- ranged by an inordinate charge for imported goods and thereby the currency depreciated, the Court of Assistance passed the following law :
"Whereas by order of Court, holden in October last, the wages of workmen were reduced to a certainty in regard of the great extortion used by divers persons of small conscience and the great disorder which grew thereupon by vain and idle waste of much precious time and ex- pense of those inordinate gains in wine, strong water, and other super- fluities, now lest the honest and conscionable workmen should be wronged or discouraged by excessive prices for those commodities which are necessary for their life and comfort, we have thought it very just and equal to set order also therein; we do therefore hereby order that after public notice hereof no persons shall sell to any of the inhabitants within this jurisdiction any provisions, clothing, tools, or other com- modities above the rate of 4 pence in a shilling more than the same cost or might be bought for ready money in England, on pain of forfeiting the value of the thing sold, except cheese, which in regard to the much hazard in bringing, and wine and oil, vinegar and strong waters, which in regard to leaking may be sold at such rates, provided the same be moderate, as the buyer and seller can agree."
As a sample of what coin or its equivalent would command at that time the following, taken from the colonial records in September of
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1663, afford a fair sample: " No person that keeps an Ordinary shall take above 6 pence a meal for a person, and not above 1 penny for an ale quart for beer out of meal time, under the penalty of 10 shillings for every offence, either of diet or of beer."
In 1635 it was ordered that musket bullets of a full bore shall pass currently for a farthing apiece, provided that no man shall be compelled to take above 12 pence at a time of them.
The currency troubles did not lessen as time went on. In October, 1640, the Legislature passed the following resolve: "Whereas many men in the plantation are in debt and here is not money sufficient to discharge the same, though their cattle and goods should be sold for half their worth, as experience hath showed upon some late executions, whereby a great part of the people in the country may be undone, and yet their debts not satisfied, though they have sufficient upon an equal valuation to pay all and live comfortably upon the rest, it is therefore ordered, that upon every execution for debts passed, the officer shall take land, houses, corn, cattle, fish or other commodities and deliver the same in full satisfaction to the ereditor at such prices as the same shall be valued at by three understanding and indifferent men, to be chosen, the one by the ereditor, another by the debtor, and the third by the marshal, and the creditor is at liberty to take his choice of what goods he will have. If he hath not sufficient goods to discharge it he is to take his house or land as aforesaid."
The elder Winthrop in referring to the condition of affairs at this time said: "The searcity of money made a great difference in all com- merce. Men could not pay their debts though they had enough. Prices of land and cattle fell soon to one-half and less, yea, to a third, and after to one-fourth part."
In 1641, to enlarge the funds of exchange and aid in canceling the public debt, the civil authorities let out the wampum trade as well as that of fur to a company. For this privilege the stockholders were to reserve one-twentieth of all their peltry for the colonial treasury, and also to purchase whatever wampum the college (Harvard College) might have paid to it, if not exceeding at one time the sum of 25 pounds ster- ling. The company was anthorized to collect wampum due the govern- ment as a tribute from the Indians.
The additions to the currency made in this way seem to have forced the authorities later on to make a new regulation as to its value, for it was ordered that wampum should henceforth be entire without breaches,
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both the white and the black, without deforming spots, and should be suitably strung in eight known parcels, 1d, 3d, 12d, and 5s in white, and ed, od, 2's and 10s in black. In 1949 the wampum came more into use than was considered expedient, and it was therefore enacted, "that it shall not be in the liberty of any town or person to pay wam- pum in their country rate nor shall the treasurer accept thereof." This example set by the government was quickly imitated by the people, who refused to take this form of money, and to prevent untoward conse- quences that would ensue, an order of the court was issued to the effect that wampumpeage shall pass current in payment of debts to the value of 40s, the white at 8 a penny, the black at 4, " so as they shall be en- tire and without breaches and deforming spots except in payment of country rates to the treasurer."
The only silver that found its way in any quantity to Boston seems to have been derived from commerce carried on with the West Indies, the bullion received in exchange for our exports being that taken by numerous buccaneers from the Spaniards. This, however, was in a form well calculated to encourage its exportation, and as a means of retaining it here it was thought advisable to establish some system of minting. The occasion was peculiarly fitting to undertake this work, as the English people had thrown off the yoke of royalty and were on the eve of establishing a commonwealth under Oliver Cromwell.
In 1652 the General Court voted, that "it is ordered, and by the authority of this court enacted, that from and after the first of Sept- ember next, and no longer, the money hereafter appointed and expressed shall be current money of this commonwealth and no other, unless English, in pursuance of the intent of this court herein. Be it further ordered and enacted by the authority of this court, that all persons what- soever have liberty to bring in unto the mint house at Boston all bullion, plate or Spanish coin, there to be melted and brought to the allay of sterling silver, by John Hull, master of the said mint, and his sworn officers, and by him to be coined into 12 penny, 6 penny, 3 penny pieces, which shall be for form flat and square on the sides, and stamped on the one side with N. E. and on the other side with the figure XIl, VI, and 1II, according to the value of each piece, together with a privy mark, which shall be appointed every three months by the governor, and known only to him and the sworn officers of the mint."
The master of the mint was therefore required to coin all the money of good silver of the alloy of new sterling English silver, but to have
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the shilling pieces of 2 pence less value than the then English com and the lesser pieces in the same proportion. For his services the mint master was to receive one shilling out of every 20 shillings which he should stamp. It will thus be seen that our forefathers hit upon the plan of keeping the money that they coined at home by making it of a less value than equivalent English money, although they attempted to give to it a purchasing power in the colony, the same as that possessed by sterling silver. The English financiers, when the coin was brought to their attention, through exchange, valued it at a discount of 25 per cent., this growing ont in part of the somewhat ernde way in which the bullion was alloyed at the Boston mint. This was the first attempt made in the English colonies to coin money, and, curiously enough, al- though it was continued for a number of years the coinage all bore the date of the first mintage, that is, 1652. The act was looked upon with not the least favor by the English authorities.
Shortly after the accession of Charles HI, royal commissioners were sent here on the ground that the right to coin money was a royal pre- rogative, and that the people at Boston had no right to usurp this func- tion. To pacify the home authorities the General Court ordered that two very large masts be transported to London for His Majesty's navy, something which in his war with the Dutch he was likely to need, and they furthermore sent a petition to the king stating that they did not believe that those who had been sent as royal commissioners to Boston properly represented his views. They still continued to coin the money in spite of objections, one of which, made by the officers of the London mint to the commissioners of the Royal Exchequer, was that if the king should continue the Boston mint he should order its emissions to be of equal value with his own specie so as to have unanimity throughout the empire. Shortly after, however, the charter of the colony was suspended, greatly to the regret of the colonists, an event growing largely ont of this attempt on their part to better supply their financial needs.
With the closing of the mint the project was started of organizing a bank. President Dudley and his eouneil stated in a memoir: "Upon the consideration of the great decay of trade, obstructions to manu- facture and commerce in this country, and multiplicity of debts and suits thereupon, principally occasioned by the present seareity of coin, and for that it is not visible how the same may be remedied unless some other secure medium be approved than the species of silver
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which very injuriously have been transported into other parts hence. And for as much as it hath been suggested and may appear to us that the defects aforesaid may be supplied with bank bills or credit given by persons of estate and known integrity and repute, which may pass with greater ease and security in all payments twenty shillings or above than moneys coined, and that other countries have found their banks useful to their great flourishing in trade and wealth. And bank credit or bills are of greater value than ready money there. Also that His Majesty's revenues in this country cannot be so well answered by the present species of silver without a great straining, impairing and damage to the merchandising trade and dealings of His Majesty's good subjects in these his territories and domains, and having perused and considered a proposal made to us by John Blackwell, of Boston, Esquire, on behalf of his own and divers other his participants, as well in England as in this country, liberty is granted for the directors or conservatives of the bank to commence the issuing of bills on security of real and personal estate and imperishable merchandise."
This is the charter under which the first bank of Boston was started. It was in form and regulations like one established in London in 1683, and like that was a short lived institution. The notes were chiefly founded on land security; but at the time of the revolution of 1689, which appears to have occasioned more or less of a panic in the colo- nies, the bank proved unequal to the strain imposed upon it and passed ottt of existence. With its failure passed away, also, the hope of our ancestors to obtain a larger circulating medium than they possessed. That the effect of the stoppage of the mint and the failure of the bank was a severe blow is found in the fact that at about this time the royal governor, Sir Edmund Andros, permitted the people of Hingham to pay their taxes in milk pails, the only commodity they had which seemed to possess any exchangeable value; while the report of the colonial treasury was given in this way: "Value of corn remaining in the treasury unsold, £938 11s ld. Money, £1, 340 10s 3d."
In the year 1690 matters reached a crisis which made decisive action of some kind imperative. Sir William Phips returned unexpectedly from an unsuccessful expedition against Canada. There was absolutely no money in the treasury with which to pay the soldiers, who became mutinous in consequence of this failure on the part of the authorities. The General Court saw no other course open to it but to issue paper currency on its own account, and on the 10th of December, 1690, the
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following was adopted: "Whereas, for the maintaining and defending of their Majesty's interests against the hostile invasions of their French and Indian enemies, who have begun and are combined in the prose- cution of a bloody war upon the English of their Majesty's colonies and plantations of New England, this colony hath necessarily contracted sundry considerable debts, which this court, taking into consideration and being desirous to prove themselves just and honest in the dis- charge of the same, and that every person who hath credit with the country for the use of his estate, disbursements or services done for the the public, may in convenient time receive due and equal satisfaction ; withal considering the present poverty and calamities of the country, and, through scarcity of money, the want of an adequate measure of commerce, whereby they are disadvantaged in making present pay- ments as desired, yet being willing to settle and adjust the accounts of said debts, and to make payment thereof with what speed they can, a committee are empowered to made an immediate issue of £2,000 in bills from 5s to £5." The form of these notes was as follows:
No. (4980) 5s
This indented bill of 5s, due from the Massachusetts colony to the possessor, shall be in valuc equal to money, and shall be accordingly accepted by the treasurer and receivers subordinate to him in all publie payments, and for any stock at any time in the treasury.
Boston in New England, Dec. 10th, 1690.
By order of the General Court PENN. TOWNSEND ADAM WINTHROP TIM. THORNTON, Committee.
With this issue began the system of paper currency on government credit, which continued for sixty years with all of the evils incident to an irredeemable circulation of this class. Although the government had expressed its desire to deal justly, and although the people were in great need of a medium of circulation, the notes that it issued were re- ceived with great suspicion. To aid in preventing a panic, Sir Will- iam Phips exchanged at par value a large amount of silver that he had obtained from successful ventures in the Spanish Main for this provincial paper money. But the soldiers who came back from the expedition to Canada, and the widows and orphans of those who perished in that disastrous enterprise, were compelled to part with the money they had obtained at a discount of about one-third.
SUFFOLK COUNTY.
It was ordered by the General Court, that the bills out and to be emitted should not at any time exceed 640,000, but this was on the assumption that the war was not to continue, and it was also assumed that such bills as were redeemed would be destroyed. That this was not the case is made evident by the fact that by a report made to the House of Representatives in 1202 it was shown that there had been emissions and re-emissions of paper money to the amount of £110,000.
In order to create greater confidence in its money the General Court decreed in 1692 that the notes issued by the colony should be equiva- lent to money in making all payments within the province, and that in . all public payments there should be a credit of five per cent. accorded to them. This means of restoring paper to a par with specie was efficacious for the time being. The bonus of five per cent. was allowed as often as the bills were brought to the exchequer, although several times in a year, which frequently occurred, because they were repeat- edly issued.
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