Page:A History of Banking in the United States.djvu/29

 and all subscriptions or cases of acting as corporations, without legal authority so to do, were to be illegal and void. Such organizations were to be deemed public nuisances, and those who made them would incur a premunire. Brokers were forbidden to deal in such shares. There was some doubt in law whether this statute extended to the colonies, but there was sufficient fear that it might do so to create alarm in the private bank, which had circulated notes in spite of the prohibition of the provincial authorities. The Governor was strictly enjoined by the authorities in England not to consent to any further issue of bills of credit. On this account, the treasury notes having been cut off, in 1733, "a number of merchants and others of Boston, in order to supply the deficiency of such a medium of trade, had recently engaged in a project of issuing paper to the value of £110,000. Rhode Island had also ordered a large emission of their bills, which, as usual, were expected to have their chief circulation in Massachusetts. With these facts laid before them, and concluding that by such causes their own bills would proceed from bad to worse, the General Court appointed a committee to examine them and make report." "Notified of such action, Governor Wanton replies, that the Rhode Island Assembly had enacted, in July last, to issue £100,000 loan, at five per cent. on land security. He adds, 'I do assure the General Assembly of the Province, we had an especial regard for the welfare of the public in said emission, and hope' that they 'will take care that trade may not be injured by a private emission now coming out without their sanction, as I am informed.'"

"The committee raised about the paper money in circulation make their report, which is accepted by both Houses. They state that the merchants' notes emitted by Boston gentlemen should be backed with greater security; and that his Excellency be desired to send out a proclamation, warning the people to be on their guard against taking the late bills of Rhode Island. The bills of the private bank, just mentioned, amount to £110,000, and were redeemable in ten years, with silver at 19s. an ounce, then the common rate of the Province paper. Though a great and imposing effort was made to keep the Rhode Island bills out of our market, yet they soon flowed in, and became current."

"The Governor thinks it is not expedient to issue a proclamation against both of these sorts of currency, though he is decidedly opposed to them. He gives his opinion that the Merchants' Bank ought not to do business without permission from the Assembly; and that such permission should not be allowed them, because falling within the limits of his prohibitory order from the Crown, to have only £30,000 in bills circulating at the same period. Still the merchants' notes were circulated, and accounted better by 33 per cent. than Province bills."

The following year the Governor declares that "the bills of the private bank or merchants' notes, instead of preventing a further depreciation of Province bills as it was confidently said, have had a contrary effect."

Connecticut granted a charter to a society in New London, 1733, for