Money and transportation in Maryland, 1720-1765 ...

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M°"ey and transportation in Maryland, 17

Preface

This study forms the second instalment of what is intended to be ultimately a complete economic history of Maryland between 1720 and 1765. The first part, entitled The Land System in Maryland, 1720-1765, appeared in the Johns Hopkins University Studies, Series xxxi, No. i. Work on the agricultural system is now under way.

The writer is under obligations to Professor Charles M. Andrews of Yale University, who read most of the manuscript and made many valuable corrections and suggestions. The study of the economic history of Maryland was undertaken during the writer's residence at Johns Hopkins University, and as a whole the work owes much to the suggestions and the inspiration of Professor John M. Vincent.

C. P. G.

Introduction

There are in every community many things — such as money, roads, and means of communication — which tend to bind persons together and to make possible that intercourse between man and man which constitutes trade. Chief among these integrating forces is the monetary system, without which no interchange of products is possible. From the cattle of the early Romans to the clearing-house certificate of the modern banker, every civilization shows its own peculiar form of circulating medium.

The American colonies, particularly those in the South, present some extremely interesting features in their monetary systems. No less than five kinds of money were circulating side by side in Maryland during the middle years of the eighteenth century. Coin — gold, silver, and copper — constituted, of course, the standard money, though in amount it was unequal to several of the other currencies. The chief use of metallic currency was in the payment of personal expenses and other small debts. Next in importance to coin were bills of exchange, which were employed for many transactions within the colony, were largely used between the several colonies, and formed almost the exclusive medium in the English trade. The third form of Maryland money was the paper currency. First put forth in 1733, for thirty years thereafter printed money played a prominent part in the economic life of the colony. Naturally the circulation of these notes was restricted almost entirely to the boundaries of Maryland. From some points of view the lO MONEY AND TRANSPORTATION IN MARYLAND

most interesting money was tobacco. Though gradually declining in importance, yet as late as 1750 tobacco was per- ^^ haps satisfying more debts than any other medium. Other agricultural products were employed as currency and were sufficiently different from tobacco to warrant a separate classification. Their use, however, was limited.

CHAPTER I Coinage

Like all other civilized communities, the American colonies made gold and silver coin both their standard of value and, as far as possible, their medium of exchange. The southern and central parts of America proved so rich in the precious metals that they were able to replenish the disappearing supply in Europe ; but as far as was known to the settlers, the English colonies were entirely lacking in gold and silver mines. Hence one of the first economic problems facing the English colonists was to procure enough bullion to supply the needs of their growing trade.

From England, the source of the great bulk of supplies, bullion was to be had only in small quantities. The balance of trade was overwhelmingly against the colonies, and in the ordinary course of commerce no money importation whatever could be expected from England. Outside of trade there were three channels by which a certain amount of coin reached Maryland from the mother-country. The first and most important of these was through settlers. It. is natural to suppose that most emigrants, on leaving England, would provide themselves with more or less pocket-money to meet immediate demands. The amount of such a supply is very difficult to estimate, but with four or five thousand settlers a year, it was probably an appreciable addition to the monetary resources of the colony.

The second way in which money reached Maryland from England was through the payment of the expenses of incoming ships. Several of the harbor entrance fees were payable only in sterling. Some of these fees went directly to the crown or to the proprietor, and the money perhaps never circulated in Maryland at all; others came to the local officials and were quickly spent in the colony. Besides the custom-house dues, ships were also liable for pilotage, provisioning, repairing, and other incidental expenses, which would often be discharged in coin brought from England for those purposes. Sailors, too, would spend a part of their wages during their stay in the colony, and captains frequently paid in sterling for the casks in which tobacco was shipped.^ It is evident that each ship entering from England was compelled to add her mite to the coin' in the colony. The third method by which England contributed coin to Maryland is more interesting than important. In 1660 Lord Baltimore attacked the problem of Maryland currency, and undertook to supply a coinage of his own.^ Because of the Fendall revolution the project came to nothing at that time, but it was renewed in 1661. In that year there was passed an act for the establishment of a mint in Maryland,^ but it is a question whether such an institution was operated in the colony, or whether the proprietor sent over to Maryland coins that he had caused to be struck in England.* A few Maryland coins have been preserved.^ The amount of currency thus provided will never be known, but it could not have been large. An act of twenty -five years later, 1686, again complained of the scarcity of coin, and attempted to remedy the evil, not by increasing the output of the mint, but by regulating the values of foreign coins.' Apparently the mint had already been discontinued. In any case the output did not remain an appreciable element in the coinage, and in the records subsequent to 1700 I have never seen an indisputable reference to a Maryland coin.'

1 Lower House Journal, May 6, 1736. It was at one time proposed to tap these sources for sterling money to pay the quit-rents.

2 Archives of Maryland, vol. iii, pp. 36s, 383, 385.

' Act of May i, 1661. See also T. Bacon, Laws of Maryland at Large, 1662, ch. 8.

* R. Ruding, Annals of the Coinage of Great Britain and its Dependencies, vol. i, p. 417; J. H. Hickcox, An Historical Account of American Coinage, p. 16.

s The Maryland Historical Society has several of these coins.

" Act of November 19, 1686.

■^ About the time of the famous Wood patent to supply a coinage for Ireland, there was a similar project on foot to supply the Ameri-

It is evident that the amount of bullion entering Maryland from England must have been utterly inadequate to supply the needs of the colony. Some other source had to be found, which proved to be the West Indies. The trade between those islands and the English mainland colonies usually resulted in a balance against the islands. The West Indies were dependent upon the mainland colonies for their supplies of grain, lumber, and provisions, and the sugar and molasses which they exported were insufficient to balance their heavy staple imports. Much bullion, consequently, was shipped from the West Indies to North America f in fact, the continental colonists came to look upon the West India fleet as gold-laden in much the same way that the Spaniards looked upon their Indian galleons.' In this trade Maryland did not take a prominent part. From the early days of the colony it seems that a few small ships sailed each year for the West Indies, and after about 1730 the trade began to grow more brisk, but even in the later years of the colonial period this traffic constituted but a small part of the total commerce of Maryland. The amount of bullion brought directly from the West Indies to Maryland, though increasing as time went on, could not have been very large.^"

The third and greatest source of bullion for Maryland was the neighboring colonies. Pennsylvania was extensively engaged in the West India trade, and drew thence large supplies of gold and silver which gradually filtered down into Maryland and Virginia. Much Maryland grain, instead of being shipped directly to the West Indies, was sold to

can colonies. The coins were made of an alloy resembling brass, and were issued in three denominations. This plan is also said to have been rejected by the colonists (Acts of Privy Council, Colonial Series, vol. ii, § 1341; Ruding, vol. ii, p. 72). No reference to such a coinage appears in any Maryland record.

8 An Essay on the Trade of the Northern Colonies of Great Britain in North America, p. 7 (Pennsylvania Historical Society).

' " The Jamaica fleet carrying a large quantity of fine sugar also much gold and silver left Jamaica fifty sail in company " (The American Weekly Mercury (Philadelphia), March 17, 1720).

1° Callister MSS. (Maryland Diocesan Library), September 30, 1757, show an importation of £14. 17s. id. from Antigua. See also extract from Mair, Book-keeping Modernized, in William and Mary Quarterly, vol. xiv, p. 87.

Philadelphia and from there exported. This traffic was the means of bringing a great deal of Pennsylvania money into the northern counties of the Eastern Shore." Another means of drawing money from Pennsylvania was through bills of exchange. By tobacco shipments Maryland and Virginia created large credits in England. Pennsylvania, having no staple to ship to England and drawing her manufactures almost exclusively from England, created large debts there. In order to meet these debts, Pennsylvania merchants purchased for cash Maryland and Virginia bills of exchange on England.^^

Most of the money of Maryland and Virginia was, by one means or another, brought in from the north. The author of The Importance of the British Plantations in America, writing about 1731, estimated that iio,ooo per year came to England from Philadelphia in Maryland and Virginia bills of exchange. A later writer said that Virginia received annually £16,000 sterling in cash for bills sent to Philadelphia.^^ In 1744 Benjamin Tasker complained to Lord Baltimore that the great amount of Spanish gold and silver brought in from New York, Pennsylvania, and Virginia was reducing the value of bullion and raising the rates of exchange.^* In fact, after about 1750, not only Pennsylvania gold and silver, but also Pennsylvania paper money formed a large part of the currency throughout most of Maryland. In order to facilitate this circulation, in 1753 the standard

" " The farmer [in the lower part of the Eastern Shore] is so remote from the mills and the Cash market that he is glad to get goods for his wheat, the merchant ships this off, and by that means lays in Cash to their mutual convenience. The Planter in these parts [Kent and Queen Anne's Counties] who has wheat can get money for it very conveniently" (Callister MSS., July 26, 1761).

12 Archives, vol. vi, p. 177; [Hall], The Importance of the British Plantations in America, p. 97 (New York Public Library).

^3 William and Mary Quarterly, vol. xiv, p. 89.

i*"The great plentieof Spanish Gold & Silver brought into New York, Pensilvania & Virginia, and the high Insurance has made a great demand for Bills of Exch^; so great that the Trading people from these Places offer Spanish Silver at 5/ the ounce, Your Lordship takes it at 5/3, these offer 4S P Cent Exch'. for Bills in Spanish Gold, you take Gold at about 41, so that the Gold & Silver that is in my hands & that I shal hereafter take, must be Remitted" (Calvert Papers, No. 2, p. 117).

of Maryland currency was made to conform to some extent to that of Pennsylvania.^^

From Virginia, on the other hand, very little bullion could be drawn, for, having little West India trade, that colony also was seeking bullion, not exporting it, and even succeeded in drawing some coin from Maryland.^" However, in certain parts of Maryland which were closely bound to Virginia either by position or by trade, eddies in the course of commerce brought in Virginia money. On the lower part of the Eastern Shore, for instance, Virginia paper was frequently found, and it is safe to conclude that the same causes that led to the importation of paper led also to the importation of bullion. ^^ Yet indications are not wanting that even in these eddies of trade, bullion was carried out of Maryland as well as brought in.^^ On the whole, the drift of bullion was from the northern trading centers southward, and in this intercourse Maryland received at one side and paid out at the other.

Unfortunately for Maryland, her southern neighbors were not the only ones to whom money had to be paid. Every new country has to be made ready for the habitation of man, and the process of preparation necessitates an enormous amount of labor and capital, both of which must be drawn from longer settled communities. The new land offers opportunities for development and improvement far too vast for its own resources, and there follows a large importation of implements and supplies of all kinds, resulting in heavy debts which must be met by the exportation of money.

15 See page 32.

1^ " Virginia has not money to lend, that Colony on the contrary is in extreme want of Cash & I am credibly informed that scarce a month passes but Virginians come to Maryland for Gold & Silver and leave their Bonds & Land Deeds in the Custody of His Ldps. Tenants" (Archives, vol. vi, p. 177).

" A Worcester County estate inventoried in 1763 contained 8s. sterling, 37s. 6d. Pennsylvania currency, 38s. 6d. Virginia currency, 32s. Sd. Maryland currency (Land Office, Inventories, No. 84, p. 83). Such notices are frequent.

18 See, for instance, a note for ^7. 17s. 8d. current money of Virginia, to be paid in Spanish whole gold, sued for in Somerset County (Court Records, Liber 1757-1760, p. 22).

No matter how much money is brought into a new land, it will all be sent off at once to purchase the material for further expansion and improvement. The entire American continent, especially the region covered by the tobacco colonies, was in this position during the formative period.

In Maryland this condition was especially acute. The northern colonists reHeved the situation to some extent by manufacturing a good many articles for themselves, but the Maryland planters carried on very little household industry and imported almost every article they used. Slaves, farming implements, household goods, clothing — all were brought in by the English merchant, while tobacco and money had to be returned to pay the bill. We find, therefore, constant shipments of gold to England and great scarcity of gold and silver in the colony.^®

The shipment of money to England is mentioned by many writers, and Englishmen generally were inclined to congratulate the mother-country on the wealth derived from this source. The author of The Importance of the British Plantations, published in 1731, after speaking of the movement of gold southward, continued: "This money by Circulation comes into the Hands of Store Keepers and Shop Keepers, who at the Departure of the Ships send it over here to England to purchase Goods."^" Another author, writing about 1764, said that all the money brought in from the Spanish, French, and Dutch islands was remitted to Great Britain.^^ These shipments of course fluctuated with the exchange, depending upon the amount of money in the

1' Governor Sharpe complained that the heavy imports drained off the money supply (Archives, vol. vi, p. 164).

2° '_' From this Province [Pennsylvania], by Way of Maryland and Virginia, we have at least iio.ooo a Year : Most of it comes from Philadelphia thus; The Masters of Ships in those Provinces are above all others under the Necessity of having Money for their Expenses for which they give their Bills, and these Bills are frequently negotiated at Philadelphia, by which Means the Money is drawn thence. This Money by Circulation comes into the Hands of Store Keepers and Shop Keepers, who at the Departure of the Ships send it over here to England to purchase goods " (p. 97).

21 An Essay on the Trade of the Northern Colonies of Great Britain in North America, p. 8.

colonies and the value of the tobacco safely exported.^^ In times of war the shipments were usually not trusted to merchantmen, but were sent on board men-of-war.^*

With a bullion supply naturally limited, with a slight outflow of money toward Virginia, and with an insatiable demand for English goods which must be paid for with coin, it is not surprising that Maryland suffered a severe dearth of money. As late as the beginning of the eighteenth century the use of coin was limited to "pocket-expenses," while tobacco served all larger trade purposes.^* In 1754 Governor Sharpe found that there was enough gold and silver in the colony for the people to pay all taxes in that medium,^° but it is presumable from that statement that there was not an abundant supply. At the time of the Stamp Act, Benedict Calvert wrote that he could not see where America was to get the money to pay the stamp duties.^' Even in 1788 Brissot de Warville found the scarcity of small money inconvenient.^^ In the controversy over the method of paying the quit-rents the scarcity of money, especially sterling coin, and the difficulty in procuring it even in small sums are frequently recognized.^^ It is evident that this matter was one of the most prominent features in the economics of the colony.

At that time there were no banking facilities to substitute credit for coin, and every man had to hoard up sufficient

^2 See pages 42-46. W. Douglass, A Discourse Concerning the Currencies of the British Plantations in America, p. 24.

2* Archives, vol. ix, p. 538; vol. xiv, p. 60.

^* [J. Oldmixon], The British Empire in America, vol. i, p. 343.

2* Calvert Papers, No. 2, p. 261.

2^ New Travels in the United States of America, vol. i, p. 377.

28 Lov\fer House Journal, April 15, 19, 21, 1735. " The Discontinuance of that Method [of paying quit-rents] is attended with greater Difficulties and Inconveniences than could have been forseen ; Which Difficulties Must Encrease in proportion to the Scarcity of Gold or Silver in the Country " (April 19) . " But alass, they [quit-rents] Cannot be Collected, there is not money enough here to be got to make regular payments from time to time, so that your officers must take Corn, Wheat, Beef, Pork, Tobacco or some Commodity of the Country" (B. L. Calvert to Lord Baltimore, October 26, 1729, in Calvert Papers, No. 2, p. 72).

treasure to meet all expected liabilities. As this naturally meant that much money was idle, a given volume of business required a greater supply of currency than would be the case today. To meet the demands of trade it was often necessary to offer special inducements to attract specie payments. Advertisements at times limited the kinds of money that would be accepted,^' and reductions were made for payments in cash. Henry Callister, in busines'S on the Eastern Shore, on one occasion advertised a quantity of saddlery, payment for which would be accepted one half in goods and one half in money, and added, " I mean sterling specie (not bills) as gold or silver money or any foreign coins."^" It was customary with this merchant to deduct ten per cent for payments of cash.^^

The people of the time believed that the scarcity of money was responsible for much more serious disorders. They considered it the direct cause of the sluggishness of Maryland trade. Expression of this vague feeling is given in Sotweed Redivivus : —

"It's Industry, and not a nauseous Weed, Must cloath the Naked, and the Hungry feed. Correct those Errors length of Time have made. Since the first Scheme of Government was laid In Maryland, for propagating Trade, Will never flourish, till we learn to sound Great-Bri tains Channel, and in Cash abound."'^

The same idea appears in other connections,'* and seems to have been prevalent among both colonists and merchants. There is, however, little foundation of truth underlying this feeling. Undoubtedly trade suffered some inconveniences from the scarcity of money, but commercial activity depends upon conditions much deeper than mere money

28 Plantations were sometimes advertised for sterling money only (Maryland Gazette, November i8, 1747). so Callister MSS., January 22, 1766. 3^ Ibid., August 27, 1761, and various other dates.

32 Maryland Historical Society, Fund Publication, No. 36, p. 36.

33 Advice of London merchants, in Maryland Gazette, April 15, 1729; Preamble to act for encouragement of importation of gold and silver; Bacon, 1729, ch. 15; preamble to paper money act of 1731, in Laws of Maryland, 1731, p. 5.

supply. Had the relative location of markets and productive forces been such as to invite the people of Maryland to engage in trade, a sufficient supply of money would have become very quickly available.

The greatest evil arising from the scarcity of bullion was the confusion produced by efforts to provide other monetary materials. From the very beginning the colonists found it necessary to carry on their transactions in some substitute for gold and silver. At first the money of the Indians was employed ; but in Virginia and Maryland tobacco soon took the place of wampum ; and by the middle of the eighteenth century, as has been said, there were no less than five separate monetary substances current in Maryland. Of course, even with a bountiful supply of gold and silver, bills of exchange would have continued to be drawn, but they would never have reached such wide currency had they not been needed as a substitute for bullion. Interminable difficulties arose from such a complex system.

The Maryland colonists tried to remedy the scarcity of gold and silver not only by providing other monetary expedients, but also by encouraging the importation of the precious metals. Sotweed suggested that tobacco buyers should be obliged to pay one sixth in currency or bills and the rest in goods. *** In order to provide sterling money for the payment of quit-rents, the proposal was made in the legislature at one time that every incoming ship be required to exchange a certain amount of coin for its equivalent in paper money.^^ Neither of these suggestions was ever carried out, but a direct bounty on the importation of bullion was established. In 1729 it was enacted that every one liable for import or export duties who would pay in imported silver or gold should receive a rebate of fifteen per cent. An oath had to be taken, however, that the bullion had really been imported, and had not previously been exported for

2^ Lower House Journal, May 6, 1736.

the purpose.^" It is impossible to find any evidence indicating the amount of coin brought in by this act.

In general, the quantity of bullion in Maryland seems to have increased greatly between 1720 and 1765.^^ It is impossible, of course, to make a trustworthy estimate as to how much currency there was in the province at any given time, but there are more references to money in the later than in the earlier years. In 1708 there was little money in the colony other than the Dutch lion dollars, commonly called dog dollars.'" By 1731 the amount of money in the province had increased so much that the legislature attempted to fix a legal value for a number of coins not before mentioned.'' Exchange fluctuations make it clear that some coin was driven out of the country by the emission of paper money in 1733 f° but it will be recalled that in 1744 Tasker spoke of the high exchange as caused by " the great plenty of Spanish Gold and Silver."*^ The CalUster letters show that in the northern part of the Eastern Shore after about 1745 an appreciable amount of business was transacted on a money basis. The Charles Hammond ledger also shows that about 1764 at least one store in Annapolis was trading almost exclusively for coin.*^ This was certainly not true of

^^ This statement seems true in spite of bitter complaints by Henry Callister of the scarcity of money. On December 17, 1764, he wrote : " there is no record since this province was called Maryland, of such a scarcity of money, whether real or imaginary, as at this juncture" (Callister MSS.). It is only in a community where money is in general use that such a complaint could originate.

3° Lower House Journal, August 25, 31, 1731.

*" " The paper currency has already (tho not in circulation) raised the value of Bills of Exchange which is not doubted will reach to 40% or more" (Calvert Papers, MS., No. 295^4, p. 66).

*i See page 14, note 14. On the other hand, Francis Jerdone, of Virginia, wrote in 1754 that " the Gold and Silver which was current in the country a few years ago is now chiefly vanish'd " ("Letter Book of Francis Jerdone," in William and Mary Quarterly, vol. xi, p. 241). This is hard to explain. It may have been a temporary or a local condition, or else Jerdone's observation may have been in error.

*2 Charles Hammond ledger (Maryland Historical Society).

the business methods of earlier days.*' Such an increase in the amount of gold and silver is exactly what one would expect to accompany the general economic changes taking place in the colony. Grain raising and the West India trade were increasing ; consequently the means of procuring money were becoming more numerous. Moreover, as the country became more thickly settled and more completely developed, one would expect the economic dependence upon England to lessen. Though the latter movement cannot be detected, it must have been in progress. Hence, with its importation increased and its exportation diminished the supply of bullion on hand could not but have enlarged.

So varied were the sources from which Maryland drew her gold supply that coins of almost every nationality entered her ports; and because of the absence of a mint, all circulated in their native garb. A motley appearance, indeed, must have been presented by an ordinary colonial till.

First** among all the coins in circulation should be put the sterling money of England. The golden guineas, sovereigns, and half sovereigns, the silver crowns, half crowns, florins, shillings, and sixpences, and the copper pennies and halfpennies, — ^all these circulated in Maryland as in England. This kind of money, however, was scarce and in great demand. Certain dues, such as quit-rents and a few customs duties, were payable only in sterling, and although foreign gold and silver seems usually to have been accepted, all disputes as to exchange were avoided by having the British

*3 The numerous accounts which appear in court records (luring the earher years of the century show payments almost exclusively in tobacco. So also do accounts from the more backward tobacco counties in the later years. Note the difference in force between the following quotations, the first written in 1714 and the second in 1765. "I have 6 head of cattle at John Morris which I desire the to sell to best Chapman that thou canst conveniently get for money if it be to be had or elsfe for good tobacco" (Bozman Papers, Library of Congress). "There is hardly any currant money in Maryland. Cannot sell my land. Have advertised without receiving an offer" (Callister MSS., November 10, 1765). In the former the cash sale seems possible but exceptional; in the latter cash is generally used, and business is at a standstill without it.

** The coins from the proprietor's mint were so few as to be negligible.

coin.*= In amount sterling was but a minor part of the circulating medium, the greater part of the gold and silver currency consisting of foreign coins, — Spanish, French, Portuguese, German, Dutch, and Arabian. As the Spanish- American provinces formed the chief source of the moneysupply, the Spanish pieces greatly predominated.

The most numerous and most important Spanish coin was the large silver dollar or piece of eight. No less than six , varieties of this coin circulated in the colonies. The old Seville dollar and the Mexican dollar were equal in value, being estimated at the time** to be worth about 4s. 6d. sterling. The pillar dollar, so called from the Pillars of Hercules*^ represented upon the reverse, was worth about 4s. 6%d. sterling. The cross dollar, a coin bearing a cross on the obverse, was worth about 4s. 4^d. sterling. The large number of dollars issued by the mints of Peru were worth no more than 4s. 5d. sterling each, and the new Seville dollar fell in value to about 3s. 7%d. sterling. Thus the extreme range of values among the various Spanish dollars was ii^^d.*^

In addition to these Spanish pieces there were three other

^^ " As it might perhaps be difficult for the Exporter of Tobacco & Importers of Rum etc. to get at all times sterling Money Liberty should be given them to pay the Duties either in sterling Money or foreign Coin rated so as to be equivalent to sterling as for Instance a Spanish Dollar at four shillings & six pence & other specie in similar proportion" (Archives, vol. xiv, p. 91). In the quit-rent disputes the complaint was sometimes made that collectors demanded sterling coin, or accepted foreign coin only at exorbitant rates (Lower House Journal, May 12, 1737).

*" Except when otherwise noted, all values given here are according to the assay by Sir Isaac Newton. Though more accurate figures can be had today, it is thought best to give the older values, as it was in these terms that all calculations were made during the period with which we are dealing. Modern assays vary slightly from these values.