Heads of a Bill to Authorize Paper Currency, [31 March–5 April 1766]
Heads of a Bill to Authorize Paper Currency
MS not found; facsimile of ad: Parke-Bernet Galleries, Catalogue 223, The John Gribbel Sale, October 31, 1940, no. 252; photostat: American Philosophical Society
Franklin’s belief that a viable system of paper currency was essential to the colonial economy goes back to 1729, when he published a pamphlet he called A Modest Enquiry into the Nature and Necessity of a Paper-Currency.1 His most recent proposal was the scheme he and Thomas Pownall had presented to George Grenville in February 1765 as an alternative to the Stamp Act.2 In March 1766 that act was repealed, and he and his friends and associates in England could turn their attention to other matters relating to the colonies that would require parliamentary action. High on his list of priorities was the repeal, or at least the considerable modification, of the Currency Act of 1764, which extended from New England to the other colonies a complete ban on issuing paper money that would serve as legal tender.
On Jan. 14, 1766, the Pennsylvania Assembly approved a petition to the House of Commons asking for the repeal of the Currency Act, and ordered the Committee of Correspondence to send the petition to the agents, Jackson and Franklin, in London.3 The Committee’s first letter of transmittal and instruction has not been found, but on April 12 Franklin acknowledged its receipt and reported the presentation of the petition.4 In his letter he also told the Committee of Correspondence that “last Week at the Request of one of the Members” he had drawn a bill to repeal the Currency Act and provide a new system of colonial currency.5
The document in Franklin’s hand printed below is undated, but it appears to fit the description he gave the Committee and is probably the outline of this proposed bill. It provides for the repeal of all the acts restraining colonial paper currency and substitutes a parliamentary authorization for such issues by the assemblies with what Franklin seems to have believed would be adequate safeguards against runaway inflation and with protection of the interests of British merchants. In strong contrast to the scheme he and Pownall had presented to Grenville the previous year, the proposed measure was permissive, not mandatory, and it did not assign to the British government the interest arising from loans of the bills of credit, but specified that this income was “to be applied to the current Service of the Year in each Colony.” No one in America, therefore, could assert that Franklin was here offering a plan, however disguised, by which Parliament would impose internal taxes on the colonies against the will of the people as expressed through their elected representatives, or by which the money produced would go to support British troops in the colonies or any other service normally paid for from British revenues.
A motion was made in the House of Commons, May 14, for leave to bring in a bill for repealing the acts of 6 Anne, 24 George II, and 4 George III, relating to coinage and bills of credit in the colonies, and the Rates of Silver and Gold, in all Payments, in His Majesty’s Colonies and Plantations in America,” which sounds very much like the present proposal. The motion was negatived, however, without a record vote.6
[March 31–April 5, 1766]7
| Preamble, Necessity of an equal Currency for all America. | |
| 2. | Acts of 6 Anne, 24 Geo. II. 3 Geo. III to be repeal’d after Sept. 1. 1766.8 |
| 3. | All present P. Money to sink at its present Periods, no more to be issued but as follows |
| 4. | After Sept. 1. 1766 it shall be lawful for any Colony Legislature, to issue any Sum they find necessary for the Revenue, Trade Business Agriculture of each Colony, each Bill to express Sterling Money, or Silver at 5s. 2d. Gold at £3 17s. 10½d. per oz., which Bills to be received in any and every Colony in all public and private Payments. Provided, Taxations laid on all Estates for calling in and sinking the same 1/6 per Annum. Bills not brought in in 6 Years to be destroyed, void, after 3 Months. Deficiency in Taxes to be paid in Gold and Silver, Bills to be redeem’d with Gold and Silver if brought in Time. Profit of Bills lost to be applied to the current Service of the Year. In Emergencies, War, &c. may issue to be sunk 1/12 each Year. |
| 5. | All Debts, Specialties &c. contracted or commencing after Sept. 1. 66 to be estimated in Gold and Silver at aforesaid Rates and recoverable accordingly, payable in Bills equivalent at the price of Gold and Silver at the Time, according to Certificate upon Oath of the Majority of any 5 of the most eminent and judicious Merchants of the Town or Colony.9 |
| 6. | Legislatures of each Colony may lend the Bills on Securities at 4 per Cent per Annum taking care to make the Colony responsible by Taxation for the same in due and proper time, for all Deficiencies of Security. Interest to be applied to the current Service of the Year in each Colony. |
| 71 | To counterfeit, Death. |
| 8 | Governors contravening this Act, cashiered. Laws contrary to be void. |
1. Above, I, 139–57.
2. Above, XII, 47–59.
3. 8 Pa. Arch., vii, 5824–7. For the Committee’s second letter, Jan. 21, 1766, transmitting a duplicate of the address, see above, pp. 51–2.
4. For BF’s letter, see below, pp. 236–40. The Commons Journal, xxx, 676, records the receipt of this petition on March 20 and its referral to the Committee of the Whole already charged with considering colonial affairs.
5. The member who requested BF to draft the bill may have been his fellow agent, Richard Jackson. BF elaborated on the background of this proposal in his letter to Galloway, Oct. 11, 1766, below, pp. 448–50.
6. Commons Journal, xxx, 822.
7. In his letter of Saturday, April 12, to the Committee of Correspondence BF said that he had drawn the bill “last Week,” which would place the date between Monday, March 31, and Saturday, April 5.
8. These three acts were: An Act for Ascertaining the Rates of Foreign Coins in Her Majesty’s Plantations in America, 6 Anne, c. 57 (1707); An Act to Regulate and Restrain Paper Bills of Credit in His Majesty’s Colonies or Plantations of [New England] and to Prevent the Same being Legal Tenders in Payments of Money, 24 Geo. II, c. 53 (1751); and An Act to prevent Paper Bills of Credit, hereafter to be issued in any of his Majesty’s Colonies or Plantations in America, from being declared to be a legal Tender in Payments of Money; etc., 4 Geo. III, c. 34 (1764). In listing these acts BF gave the regnal year of the last one incorrectly.
9. This clause appears to be the one BF told the Committee of Correspondence in his letter of April 12 that he had inserted to satisfy the British merchants.
1. In the margin of the paper reproduced by photostat, next to the numbers 7 and 8, is drawn a conventional pointing hand, possibly added at a later date.