America. I shall not enter into the invidious task of comparing their due estimation. It would be a very long, and a very disagreeable one, to run through every thing material on this head. It is enough to our present point, if I have shown, that the value of North America is capable of an immense increase, by an acquisition and measures, that must necessarily have an effect the direct contrary of what we have been industriously taught to fear; and that Gua daloupe is, in point of advantage, but a very small addition to our West-India possessions; rendered many ways less valuable to us, than it is to the French, who will probably set more value upon it, than upon a country [Canada] that is much more valuable to us than to them.

There is a great deal more to be said on all the parts of these subjects; but as it would carry me into a detail, that I fear would tire the patience of my readers, and which I am not without apprehensions I have done already, I shall reserve what remains till I dare venture again on the indulgence of the public.

ON PAPER MONEY.

Remarks and Facts relative to the American Paper-moneys.

IN the Report of the Board of Trade, dated February 9, 1764, the following reasons are given for restraining the emission of paper-bills of credit in America, as a legal tender.

1. "That it carries the gold and silver out of the province, and so ruins the country; as experience has shewn,

4 Dr. Franklin has often been heard to say, that in writing this pamphlet he received considerable assistance from a learned friend, who was not willing to be named.

5 The best account that can be given of the occasion of the Report, to which this paper is a reply, is as follows. During the war there had been a considerable and an unusual trade to America, in consequence of the great fleets and armies on foot there, and the clandestine dealings with the enemy, who were cut off from their own supplies. This made great debts. The briskness of the trade ceasing with the war, the merchants were anxious for payment, which óccasioned some confusion in the colonies, and stirred up a clamor in England against paper-money. The board of trade, of which lord Hillsborough was the chief, joined in this opposition to paper-money, as appears by the report. Dr. Franklin being asked to draw up an answer to the report, wrote the paper given here.

in every colony where it has been practised in any great degree.

2. "That the merchants trading to America have sufferad and lost by it.

3. "That the restriction of it has had a beneficial effect in New England.

4. "That every medium of trade should have an intrinsic value, which paper-money has not. Gold and silver are therefore the fittest for this medium, as they are an equiva lent; which paper never can be,

5. "That debtors in the assemblies make paper-money with fraudulent views.

6. "That in the middle colonies, where the credit of the paper-money has been best supported, the bills have never kept to their nominal value in circulation; but have constantly depreciated to a certain degree, whenever the quantity has been increased."

To consider these reasons in their order; the first is,

1. "That paper-money carries the gold and silver out of the province, and so ruins the country; as experience has shewn, in every colony where it has been practised in any great degree."-This opinion, of its ruining the country, seems to be merely speculative, or not otherwise founded than upon misinformation in the matter of fact. The truth is, that the balance of their trade with Britain being greatly against them, the gold and silver are drawn out to pay that balance; and then the necessity of some medium of trade has induced the making of paper-money, which could not be carried away. Thus, if carrying out all the gold and silver ruins a country, every colony was ruined before it made paper-money. But, far from being ruined by it, the colonies that have made use of paper-money have been, and are all in a thriving condition. The debt indeed to Britain has increased, because their numbers, and of course their trade, have increased; for all trade having always a proportion of debt outstanding, which is paid in its turn, while fresh debt is contracted, the proportion of debt naturally increases as the trade increases; but the improvement and

increase of estates in the colonies have been in a greater proportion than their debt. New England, particularly in 1696 (about the time they began the use of paper-money) had in all its four provinces but 130 churches or congregations; in 1760 they were 530. The number of farms and buildings there is increased in proportion to the numbers of people; and the goods exported to them from England in 1750, before the restraint took place, were near five times as much as before they had paper-money. Pennsylvania, before it made any paper-money, was totally stript of its gold and silver; though they had from time to time, like the neighboring colonies, agreed to take gold and silver coins at higher nominal values, in hopes of drawing money into, and retaining it, for the internal uses of the province. Durthat weak practice, silver got up by degrees to 8s. 9d. per ounce, and English crowns were called six, seven, and eight shilling pieces, long before paper-money was made. But this practice of increasing the denomination was found not to answer the end. The balance of trade carried out the gold and silver as fast as they were brought in; the merchants raising the price of their goods in proportion to the increased denomination of the money. The difficulties for want of cash were accordingly very great, the chief part of the trade being carried on by the extremely inconvenient method of barter; when in 1723 paper-money was first made there, which gave new life to business, promoted greatly the settlement of new lands (by lending small sums to beginners on easy interest, to be repaid by instalments) whereby the province has so greatly increased in inhabitants, that the export from hence thither is now more than tenfold what it then was; and by their trade with foreign colonies, they have been able to obtain great quantities of gold and silver to remit hither in return for the manufactures of this country. New York and New Jersey have also increased greatly during the same period, with the use of paper money; so that it does not appear to be of the ruinous nature ascribed to it. And if the inhabitants of those countries are glad to have the use of paper among themselves, that

they may thereby be enabled to spare, for remittances hither, the gold and silver they obtain by their commerce with foreigners; one would expect, that no objection against their parting with it could arise here, in the country that receives it.

The 2d reason is, "That the merchants trading to America have suffered and lost by the paper-money."-This may have been the case in particular instances, at particular times and places: as in South Carolina, about 58 years since; when the colony was thought in danger of being destroyed by the Indians and Spaniards; and the British merchants, in fear of losing their whole effects there, called precipitately for remittances; and the inhabitants, to get something lodged in safe countries, gave any price in papermoney for bills of exchange; whereby the paper, as compared with bills, or with produce, or other effects fit for exportation, was suddenly and greatly depreciated. The unsettled state of government for a long time in that province had also its share in depreciating its bills. But since that danger blew over, and the colony has been in the hands of the crown; their currency became fixed, and has so remained to this day. Also in New England, when much greater quantities were issued than were necessary for a medium of trade, to defray the expedition against Louisbourg; and, during the last war in Virginia and North Carolina, when great sums were issued to pay the colony troops, and the war made tobacco a poorer remittance, from the higher price of freight and insurance: in these cases, the merchants trading to those colonies may sometimes have suffered by the sudden and unforeseen rise of exchange, By slow and gradual rises, they seldom suffer; the goods being sold at proportionable prices. But war is a common calamity in all countries, and the merchants that deal with them cannot expect to avoid a share of the losses it sometimes occasions, by affecting public credit. It is hoped, however, that the profits of their subsequent commerce with those colonies may have made them some reparation. And the merchants trading to the middle colonies (New

York, New Jersey, and Pennsylvania) have never suffered by any rise of exchange; it having ever been a constant rule there, to consider British debts as payable in Britain, and not to be discharged but by as much paper (whatever might be the rate of exchange) as would purchase a bill for the full sterling sum. On the contrary, the merchants have been great gainers by the use of paper-money in those colonies; as it enabled them to send much greater quantities of goods, and the purchasers to pay more punctually for them. And the people there make no complaint of any injury done them by paper-money, with a legal tender; they are sensible of its benefits; and petition to have it so allowed.

The 3d reason is, "That the restriction has had a beneficial effect in New England." Particular circumstances in the New England colonies made paper-money less necessary and less convenient to them. They have great and valuable fisheries of whale and cod, by which large remit. tances can be made. They are four distinct governments; but having much mutual intercourse of dealings, the money of each used to pass current in all but the whole of this common currency not being under one common direction, was not so easily kept within due bounds; the prudent reserve of one colony in its emissions being rendered useless by excess in another. The Massachusetts, therefore, were not dissatisfied with the restraint, as it restrained their neighbors as well as themselves; and perhaps they do not desire to have the act repealed. They have not yet felt much inconvenience from it; as they were enabled to abolish their paper-currency, by a large sum in silver from Britain to reimburse their expences in taking Louisbourg, which, with the gold brought from Portugal, by means of their fish, kept them supplied with a currency; till the late war furnished them and all America with bills of exchange; so that little cash was needed for remittance. Their fisheries too furnish them with remittance through Spain and Portugal to England; which enables them the more easily to retain gold and silver in their country. The middle co