USA > Rhode Island > Providence County > Providence > State of Rhode Island and Providence Plantations at the end of the century : a history, Volume 3 > Part 21
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1A survey was made of the Narragansett and Kingstown lands in 1707 and within the next two years about 80,000 acres seem to have been sold, part of them at the rate of 8d. per acre.
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PUBLIC AND PRIVATE FINANCE.
or sergeant was £4, but excuses were plenty and in many cases the pen- alties were remitted while in others it was impossible to enforce them.
Fines for non-performance of official duty seem to have been most frequent in the cases of the deputies and jurymen, the former paying three shillings perday, which was their rate of pay, and the latter at the rate of £1 for the term of court during which they should have served. Later the fines were increased to double daily wages received by the deputies. Fines for breach of the peace were usually devoted to pay- ing court expenses, but in 1702 all goods and sums of money forfeited to the colony by judgment of the court were appropriated to building fortifications and a battery. It is probable that this law applied espe- cially to the judgments in the admiralty court.
The sorts of income already described furnish a key to the character of both local and colonial expenditure during this period. The limited scope of the state function confined ordinary colonial expenditures wholly to payments for personal service. Until 1705 the colony took little share in public improvements, but left the care of highways and bridges, to which such improvements were confined, to the towns. In some of the unincorporated and outlying districts, such as Conanicut Island or the Narragansett Country, the colony authorities directed the layout and supervised through its own appointees the construction of necessary highways, but the charges were laid wholly upon the sur- rounding proprietors of lands. In the towns, both before and after incorporation, such functions broadened the scope of public expendi- ture, but as highways in Providence were maintained by adjoining land owners, and as the only important bridge seems to have been built by Roger Williams, partly assisted by voluntary subscription and for a short while was maintained by him partly from tolls exacted from non-residents and contributed by residents, neither caused any considerable public outlay. In 1699, with a view to aiding the postal system, established in that year, town councils were authorized to lay out highways as post roads and to submit their returns to the general assembly for approval.
The other extraordinary expenditures of the towns were confined to building pounds, occasionally stocks, and in this period to the prison built in Newport, after many years of ineffectual effort on part of the colony to have at least a "cage" in each town. Not until 1695 was a prison begun in Providence. In Providence and in Portsmouth as well, the fees of the sergeant or town sheriff were soon supplanted by wages, and the chief taxes levied were for the sergeant's wages, "house rent" and the poor-"house rent" being the money paid for the use of a room for public meetings-usually that of the leading local tavern- keeper. The maintenance of the poor was not a large item of expense, as but few during this period became chargeable-only those being
13-3
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STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS.
admitted to settle in any town who after rigid serutiny were seen to be possessed of sufficient property to eare for themselves.
Military service was required of all between the ages of 16 and 60, and besides the eost of powder, shot and his matchloek each soldier was required to train a few days annually. When actual military service was demanded the colony paid the cost of maintaining the forees. In 1676, during the Indian war, Arthur Fenner was commissioned as captain in command of the Providenee garrison, consisting of seven men with wages of "six shillings a week a man, money pay"-the captain had double pay. In a military law of 1701 all housekeepers, including widows, were required to furnish one man or pay for one. The fines imposed for negleet of duty were devoted to the use of the train bands at first, but in 1676 they were appropriated to paying for eolors and drums.
The expenditures of the colonial government, even more than those of the towns, were payments for personal serviee. The honor attaching to colonial serviee seems to have deprived it of that compulsory eharaeter which attached to loeal serviee. Of the general officials the governor and assistants, being not only legislative but judicial offieers, received only the fees attached to their latter duties until 1695. In 1650 the deputies, then officially known as eom- missioners, were allowed 2s. 6d. a day by the respective towns which they represented, and the next year the rate was raised to three shil- lings. Jurymen at first received 1s. 6d. a day, but in 1655 they were allowed 2s. for each case. With the impulse toward stronger govern- ment which oeeurred about 1670 there was a ehange made toward in- creasing the pay of the members of the general assembly, the aim being partly also to seeure thereby inereased attendanee-an end which the imposition of heavy fines had failed to aeeomplish. In that year the treasurer began to receive one shilling in the pound on all taxes paid in provisions, but he had no commission on taxes paid in money or on fines, and in 1672 the assembly that passed the sedition law provided for payment (presumably by the colony) of the governor, deputy- governor, assistants and deputies, by day wages at the rate of 6s., 5s., 4s. and 3s. respectively, but at the following session this law, like the sedition aet, was repealed. Again in 1679 the deputies and assistants were eneouraged to attend to their official duties by an order providing that their expenses for "diet and lodging" during their official service should be paid from fines and forfeitures, and in the same year a bill for twenty-two shillings for the convivial entertainment of the mem- bers of the assembly was ordered paid. In the following year they were allowed only seven shillings a week for their necessary expenses. The November session of 1685, in view of the "thinness" of the assem- bly, voted an annual salary to the governor of £10, which was raised at
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PUBLIC AND PRIVATE FINANCE.
various times until 1701, when it was fixed at £40; gratuities were fre- quently voted to him, sometimes amounting to sum as large as his annual salary. In 1695 also the deputy-governor and assistants were allowed salaries of £6 and £4 respectively. The deputies were thence- forth to be paid by the general government. The payment of these salaries and day wages was not always prompt. Of the governor's salary £19 was paid in 1699. Many of the assistants were creditors for three years' salary, and although in 1698 the towns were again ordered to pay their deputies, the latter in 1699 were paid £125 8s. 9d. of wages which seem to have accrued during the two years 1696-97 and the first five months of 1698. After a change to payment by the colony again in 1703 towns were finally in 1706 required to pay their deputies.
The general sergeant or high sheriff was then as now one of the most highly paid officials in the service of the colony. In 1673 his bill for salary and fees was £27 18s., and the assembly declared that the "debts of the collony are very much by reason of the sergeant's great wages". In the future he was to receive only 3s. a day for attending on the assembly and fees only for attending on the courts of trial.
The cost for the agent who was employed in England to care for the colony's interest was a heavy charge. In 1700 he received £80 a year and expenses, and in the same year he drew on the colony for £270. The salary was reduced later and in 1708 Wharton, who had succeeded William Penn in the duties of agent, was allowed £80 a year including ordinary expenses.
A clearer picture of the finances of the period can be had by refer- ence to the treasurer's book which Peter Easton bought in Boston for fourteen shillings in silver in 1672. The transactions of the colony were previously kept on loose sheets of paper. Easton kept a system of quadruple entry, the first column containing "What is to pay in", the second "What is paid in", the third "What is to pay out" and the fourth "What is paid out". Accounts were kept in terms of Eng- lish coin, New England silver and country products. English coin was valued at double the local value of products, while Boston silver was valued at one and one-half times the nominal value of products. Captain Morris received for serving dinners to the grand jury, 21 1-2 pounds of pork and veal and 41 pounds of pork. Walter Nuberry for similar service was paid 9s. in the form of "meat, buter and eggs", while Henry Palmer for auditing the treasurer's accounts received 136 pounds of pork. Of 20 shillings expended for refreshment of the members, 16s. 4d. was paid for wine and brandy. The executioner of the Indian Punnean and one Thomas Cornell received £2 for each service, and 16s. was expended for "rum" for the guard. A messen- ger to Plymouth received £2 5s. and two "posts" were paid £1 10s. for bringing news about the Hollanders from Boston and Plymouth. The transportation of members from the mainland to the island cost £2 11s.
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STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS.
During the period from the third month, 6th day, 1672, to the eighth month, 28th day, 1675, the total payments, of which these are typical instances, seem to have been £96 6s. 3d. The treasurer seems to have received during the same period £94 1s. 10d., of which £63 12s. were fines, £14 15s. were received from the forfeited estate of the mur- derer, Cornell, and £16 14s. 10d. from miscellaneous sources.
The books of the treasurer were not balanced annually, but accounts were kept with each separate tax until after 1700. The expenditures of the period can be illustrated by the payments made from the £800 rate for general purposes. The period covered is from January 19 to October 12, 1699.
£
S.
d.
Salaries
322
00
09
Fees for assessing and gathering rate including
£37 10s. treas. commissions and auditing £2 14s ...
110
10
8
Military services including Block Island £75 06s ...
90
1
Entertaining Lord Bellomont.
74
15
4
Entertaining Connecticut men.
19
07
Wolf bounty
16
10
Transcribing laws.
12
Physician's services for soldiers
8
10
7
Dinners
5
07
Pension to soldier's widow
10
Miscellaneous
100
09
8
Still due from towns
39
18
-
£800
Rhode Island took no part in the world-wide wars previous to 1702, her exposed coast, especially the situation of Block Island, requiring that the whole of her expenditures in service and money should be devoted to protecting her own territory. In Queen Anne's war con- siderable sums were spent and for many of the years 1702-10 the taxes on Block Island were remitted because of heavy military expenses. The Queen's tenths of Captain Wanton's prizes, amounting to £170, were expended in 1703 on great guns and other utensils of war. Wes- ton Clarke in 1705 reported to the English government that £6,000 had been spent in the previous seven years for military and other govern- mental expenses, and of this sum more than one-third seems to have been devoted to the former purpose. A fort mounting fifteen guns was built on the island in front of Newport harbor for which taxes were levied amounting to £700. Governor Cranston stated in 1708: that the cost of the Block Island garrison was about £100 a year and the treasurer's accounts confirm the assertion. During the active period of the war 1708-10 the cost of the soldiers at the fort was about an equal sum. The colony equipped and maintained 200 men for
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PUBLIC AND PRIVATE FINANCE.
more than four months in 1709 for the intended expedition to Canada, at a cost of £2,238 12s. 8d., and £840 paid for the two sloops, Diamond and Endeavor, subsequently resold for £461. When in July, 1710, the expenditures for the Port Royal expedition reached £5,033 19s.1 the colony voted to issue £5,000 bills of credit, and a new phase of finan- ciering was entered upon.
The attempts of Dudley to interfere with the charter rights of the colony in 1702-1705 caused heavy legal expenses for the agent in Eng- land, and during the years 1699-1708 about £1,500 seems to have been paid to Jahleel Brenton, William Penn and William Wharton for that purpose.
An approximate estimate of the general uses of taxation during the sixty years 1650-1710 can be had by reference to the fact that taxes were usually laid for some specific object, and, except in one or two cases, carefully applied to that particular purpose. Of the £17,300 levied, £3,920 was devoted to diplomatic service abroad, £6,200 to military purposes, £450 to public buildings and £6,730 to general purposes.
In the years 1698-1702 the average annual expenses of the colony were about £550; in the three years 1709-10-11 they averaged over £4,250.
PART II. 1710-1800.
The Colony as a Banker .?
During the period of agricultural development, the meager financial transaction of which we have just traced, exchanges of goods between individuals were made by processes of barter and by means of peage and gold and silver coins of England, Spain and Portugal, but the standard of value and the fundamental money of account was gold and silver of the weight and fineness of New England coin. These coins were worth about three-fourths as much as the corresponding English coin. A brief account of the money media of the first two generations of settlers therefore will furnish a fitting introduction to the period 1710-1800, when the subject of money was the chief economic and
1In the next year upwards of £3,500 more was spent for the same purpose.
2 The sources for this period are the Rhode Island Colonial Records, vols. iv-x; the acts, resolves and reports of the general assembly; documents, re- "ports and letters in the archives of the secretary of state; American state papers, volume on Finance, account books of the treasurer; newspapers of Providence and Newport beginning in 1763; Staples's R. I. in the Continental Congress; the works of Paine, Hamilton, Madison and the Federalist and the letters of Robert Morris.
As to paper money and lotteries, see especially- the Providence Town Papers.
!
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STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS.
political topic of discussion, when taxation was almost wholly resorted to as a war expedient and when, in the issue of paper bills of credit, the colony itself performed some of the functions of banking.
In the earliest days of the settlements coin was scarce, partly because its exportation from England was forbidden, partly because the colo- nists had little money to bring with them when they came, and partly because the products of the country did not suffice to pay for the goods imported and the local stock of the precious metals was exported to balance the foreign trade. Rhode Island seems to have followed the precedent set by Massachusetts in declaring peage a legal tender, and the early government of Newport and Portsmouth, as we have seen, had used corn as money. Under clauses of certain tax acts also agri- cultural products and livestock were received at stated prices in pay- ment of public dues. Usually the prices set for such articles were those current in the local market, but at times products were over- valued and the treasury was filled with goods which could only be sold at a loss. Articles received in payment of taxes were kept in the colony store-house and the treasurer was not inaptly known as the "keeper of the public stock". The law that the cheaper money invar- iably drives the dearer from circulation was early illustrated by the tax paying money quality conferred upon products. As such products were receivable at fixed prices, according to measure or weight, the tax payers turned in only inferior qualities in payment of public dues. "Lank kine" were barred by law in Massachusetts, but in Rhode Island the thrifty citizens at times paid their taxes in goods that were "not merchantable."
The Indian money first used was called peage, wampum and wam- pumpeage, but was of two sorts only-the black, properly called wampum and the white properly called peage. The black wampum was made from the dark eye of the quahog shell and the white peage from the thick neck of the perrywinkle shell. Each piece of shell was disc shaped or tube shaped, about an eighth of an inch in diameter, a hole being bored through the center to facilitate its use in strings or for embroidery. The edges, both inside and out, were rounded and the whole surface was more or less polished. The so-called "black peage" seems to have been rather dark blue, purple or variegated purple and dark reddish in color, and probably there was no black peage until counterfeiters began to dye the white peage black in order to enhance its value. For the purpose of large transactions the discs were strung together, 360 constituting a fathom. Wampum was twice as valuable as peage, the shell of the quahog being more scarce and more difficult to work than that of the perrywinkle. The Narragansett Indians were most skillful makers of this money. Rhode Island and the eastern end of Long Island were the centers of production, and peage was used as far west as the country of the Mohawks. To the
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PUBLIC AND PRIVATE FINANCE.
Indians it was both a money media and a means of ornament, just as silver and gold were among more civilized peoples. "With it", says Lawson, "they buy off murderers, and whatever a man can do that is ill, this wampum will quit him of and make him in their eyes good and virtuous though never so black before". By means of it when sewn or strung together on belts in imitation of their picturesque language they preserved the most sacred records of the tribe. Thus peage had many of the qualities of real money. Among the aborigines its value was fixed partly by the cost of production and partly by the demand for it to satisfy their desires. To the colonists, however, it was rather a representative money. It had value to them chiefly because it could always be exchanged for furs, and was therefore redeemable in an article of useful and salable merchandise. Among the Dutch traders a beaver skin was at first worth 960 peage and in Massachusetts about six shillings per pound, which was approximately an equal price. Probably nearly the same value prevailed in early Rhode Island. Williams says that a fathom of white peage was at first worth ten shillings, that is, three for a penny ; but by 1647 a fathom was valued at five shillings seven and three-fifths pence. Other records would indicate that peage was reckoned at the rate of three black or six white for an English penny. As early as 1649 the decline in the beaver trade had begun. The skins fell in value, and as they were the basis of the value of peage among the English, peage fell in value also. The commissioner's court declared that peage should be rated at four and eight per penny for the black and white respectively. In 1662 wampum had fallen so low in value that the general court declared it no longer legal tender and directed fines and forfeitures to be there- after paid in current pay. Nevertheless peage continued to be re- ceived in local public dues and to be used among individuals for many years.
The periods of the paper money issues may be roughly divided according to the technical name of the kinds of money emitted. The first period lasted until 1740, when new tenor bills were first issued and all previous issues were called old tenor bills ; the second period lasted until 1756, when the first issue of lawful money bills was made. The third period lasted until 1786, the date of the last issue of paper money.
The latter part of the seventeenth century was a period of wide- spread financial unrest and to England, involved in the costly wars on the continent and struggling for commercial supremacy, the value of a well-defined monetary system was of the highest importance. But while the transition from the system of barter economy of the middle ages to the modern system of money economy was nearly complete, banks having been already established in Genoa and Amsterdam, the nature of the new system was not clearly understood. England was
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STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS.
wedded to the "Mercantile theory", which emphasized the money forms of wealth and a favorable trade balanee. The exportation of eoin was prohibited. The landed interests, in bitter antagonism to the merehant elasses, whose rising power they could not cheek, dallied with the notion of paper money issued against landed security by private companies, and King William himself, in 1696, subseribed £5,000 to a land bank scheme in which the notes were to be issued to the full value of the land pledged.
Thus the seareity of eoin as a money medium, notieed in Massaehu- setts in 1650 and in Rhode Island a few years later, was not an isolated phenomenon. With the true spirit of Mereantilism, many of the colonists attributed the absence of money to an unfavorable bal- anee of trade, but instead of trying to remedy that condition by increased industry and decreased consumption of foreign produets, they sought to stop the natural exportation of the precious metals by debasing the eoinage. This was one of the reasons for the fact that under the mint aet of Massachusetts of 1652 the value of the eoins struck was about three-fourths of that of the corresponding English coins.1 This attempt to prevent the exportation of eoin as well as other laws passed by Massachusetts, giving legal values to foreign coins in exeess of their bullion value, was a failure. In 1686 the paper money advocates first issued a private bank, and in 1690 the colony issued bills of credit to pay the expenses of the expedition to Canada. The bills at onee depreciated to about two-thirds of their value, but legal tender laws were soon passed. In 1692 the bills were receivable for publie dues at five per eent. premium, and their redemption was promised in one or two years. By these means they were raised to and maintained at about par. Thus England and Massachusetts had run the whole course of financial experienee previous to 1700, and by 1710, when Rhode Island first issued paper money, New Jersey, New York, Connecticut and South Carolina were added to the list.
In 1704, at the request of Queen Anne's government, Sir Isaac Newton assayed the eoins then eurrent in colonies and set the value of the Spanish milled dollar at 4s. 6d. sterling or 6s. New England eur- rency. Governor Cranston, when requested by the Board of Trade to legalize these values of foreign eoins, explained that the trade of Rhode Island was so elosely related to that of Massachusetts that the eolony could do nothing effectively until the assembly should learn
'The following facts will be of value to the reader in converting the various money media during this period: An ounce of silver was worth in the sterling coin of England 5s. 2d .; in New England coin 6s. 8d .; the par of exchange between New England and old England was 133 1-3 to 100. The Spanish silver dollar or piece of eight was worth 4s. 6d. sterling and 6s. New England coin. In converting lawful New England money into Spanish dol- lars calculate 3 1-3 dollars to the pound. The Spanish silver dollar was worth a little more than $1.07 of the present United States standard.
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PUBLIC AND PRIVATE FINANCE.
what attitude the neighboring colony intended to adopt toward the request. He claimed that Rhode Island bought foreign goods from Massachusetts annually worth £20,000, and if the statement is approxi- mately true the drainage of coin from the local field must have been very considerable in amount.
Although, therefore, the more intelligent members of the community at least must have known of the evil economic effects of a depreciating currency, yet, when in 1710 the colony took an important part in the operations against Canada, the expenses arising in connection with the expedition and the alleged scarcity of currency furnished somewhat plausible economic grounds for the first issue of bills of credit. At the July session of the general assembly in 1710 the first issue of £5,000 bills of credit was authorized ; at subsequent sessions in the same year £2,000 more were ordered, and in the following year £6,000 more. The laws authorizing these issues or soon passed as amendments to them, had they been observed, would have gone far toward maintaining the bills at or near parity with coin. The bills were made legal tender for all payments public and private except where "specialities" or other specific forms of payment were agreed upon. They did not bear interest, as did some of the Massachusetts issues, but by an act of October they were receivable for taxes at five per cent. premium ; they were redeemable at the end of five years and the funds for their re- demption were to be raised by taxes payable £1,000 each year. But the specific and implied pledges of the laws were unavailing. The tax- ing power of the central government was weak and those who possessed property, doubting both the colony's ability and intent to redeem the bills, received them only at a discount. Their suspicions of the integ- rity of the legislature were soon confirmed. The marvelous art of enriching one's self by running into debt was contagious and no sense of moral obligation availed to restrain the general assembly when once its members had tasted of the sweets of inflation. In any new com- munity the debtors usually outnumber the creditors and the law making body here soon began to feel their influence. The first tax of £1,000 levied to redeem a portion of the bills was due on June 30, 1711. At a session of the assembly, convened on the 28th of that month, the tax was ordered to be used for the expenses of the second expedition to Canada. The taxes due in 1712 were delayed and in 1714 those of Providence and Newport had not been paid. Meanwhile the mone- tary question had become political. By 1713 distinct political parties were formed of those in favor and those opposed to fiat money. In that year a Providence town meeting issued a vigorous protest against the further issue of such bills. Queen Anne's war was over, and the hard money party then in power made some efforts to redeem the emis- sions. Unused military stores were sold and a proposition to burn £500 made by the house of deputies was laid aside pending an audit of
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