Page:History of Fiat Money and Currency Inflation in New England from 1620 to 1789.djvu/19

 bills had scarcely been redeemed in specie when the people again called for more paper bills. The experience of the past was not enough. Hutchinson tells us that:

"A great cause of prejudice against the redemption of paper currency and its cessation was that those who depended on their labor for support, suspected, that while the wealthy would hoard up the silver and gold, they should have none of it, and should be worse off than under the system of Province banking."

To meet the wants of the treasury and supply the crying need—a medium of exchange—the General Court of Massachusetts issued in 1755 interest-bearing treasury notes for money borrowed on account of the province. This course was continually followed by the government until the Revolution, when the practice was resumed under a different administration. These treasury notes were not legal tender yet they passed quite generally in trade. In Rhode Island inflation was carried to a greater extreme than in Massachusetts. By her currency dissipation Rhode Island lost most of her trade and commerce, which up to the middle of the century was especially large. Rhode Island had issued about £165 in paper per capita. This entirely deranged business for a time and precipitated some of the leading merchants into bankruptcy. The first act of bankruptcy was passed for the especial benefit of Joseph Whipple of Newport, then a great commercial centre.

To-day gold is generally preferred to silver. In 1762 the people strongly opposed the government when it was proposed to make gold a standard equal to silver. Strangely enough Mr. Hutchinson shared the fears of the many. When the province changed the form of its notes in 1762 gold became legal tender. Frequently the government defaulted on its interest or prolonged the date of payment. Such measures naturally impaired the credit of the province