Page:History of Fiat Money and Currency Inflation in New England from 1620 to 1789.djvu/17

 of province bills were not redeemed in 1742 owing to bad finances and a change in the royal executive.

To facilitate matters Massachusetts attempted to regulate the fluctuating currencies by an equity bill which became law in 1742. This was another attempt to rejuvenate fiat money and electrify the province bills with purchasing power equal to coined sterling silver. There were in circulation in Massachusetts at that time "public bills"—old tenor—of four provinces at 29s. per ounce of silver; new tenor of Massachusetts at 6s. 8d., but current at 9s. 8d.; Connecticut at 8s.; Rhode Island at 6s. 9d. There were still bills in circulation, a parcel of £110,000 of "silver money scheme or Merchants' notes," issued in 1733, which being redeemed in specie passed at 33 per cent better rates than province bills. The silver bills of 1740 circulated to the amount of £120,000. Silver and gold did not circulate much, for when they drifted into the channels of commerce they were sent to England.

This fluctuating and complicated currency retarded business and crippled commerce. Ships, the building of which was the chief industry of New England, were lying in dry dock. Inflation was triumphant, business paralyzed. Peter Faneuil wrote his English correspondent in 1736:

"You will see by these Acc'st. how dear build'g is: it is much cheaper to buy Vessells in the river of Thames than to have them built here for the Present."

A little later in 1741, exchange between sterling and Massachusetts paper was 450 per cent; necessarily creditors suffered much. Inflation invariably reduced the burdens of those who lived by credit at the expense of the creditor. Paralysis of business is the natural result of such conditions