he were deeply concerned. It was, indeed, the question of the hour, and on its decision hung the financial and commercial prosperity of the province.

Six years before, the people of Pennsylvania had, with much trepidation, ventured on the issue of a small bank of paper money: the day for its redemption was drawing near, the Lords of Trade had forbidden the issue of any more, and it seemed not unlikely that, in a little while, men would again be bartering hats for potatoes and flour for shoes because of the lack of a medium of exchange.

The earliest of the many issues of paper money in what is now the United States took place when the French and English were deeply engaged in their first struggle for the possession of Canada. James had just been driven from his throne. William and Mary had just succeeded, and the colonies, with every manifestation of delight, had taken up arms in defense of the authority of William, the Protestant religion, and the right to catch cod off the Grand Banks. For a while the war was waged with varying success. The English devastated the island of Montreal, and the French retreated from Frontenac. Then the tide turned: the French rallied, took Pemaquid, drove the English from every settlement east of Falmouth,

burned Salmon Falls, and laid Schenectady in ashes. Driven to extremity, the English rallied, and in a congress at New York in 1690 resolved on the conquest of Canada. New York and Connecticut were to send a land force against Montreal. Massachusetts and Plymouth sent a fleet against Quebec. Acadia fell, Port Royal surrendered, and New England ruled the coast to the eastern end of Nova Scotia. There success stopped. The commanders of the English troops fell to quarreling, and the land expedition failed miserably. Frontenac, having no foe to oppose him, hurried to Quebec, and entered the city just as the New England fleet came sounding its way up the St. Lawrence. The summons to surrender the city was received with jeers. The fleet, unable to take Quebec without the aid of the army, sailed for Boston, to be scattered by storms along the coast. To commemorate this signal deliverance the French put up the Church of our Lady of Victory. To pay the cost of the expedition Massachusetts issued the first colonial paper money. In 1703 South Carolina followed her example.

Scarcely had King William's war ended than Queen Anne's war broke out. Again the French and Indians came down from Canada, and, while Franklin was a child, laid waste the

towns of Massachusetts with fire and sword. Again the colonies sent ships and troops against Canada. Again they failed, and, to pay the cost, New Hampshire, Connecticut, Rhode Is land, New York, and New Jersey imitated Massachusetts and put out bills of credit.

These early issues of credit-bills are not to be confounded with the "banks of paper money" of a later time. The amounts were

small. The purpose was the payment of some pressing debt. But after the close of Queen

Anne's war the belief sprang up in the minds of men that it was the duty of a government to provide a circulating medium, and that just as fast as that medium disappeared, the duty of the government was to make more. The colonists were heavy traders; the balance of trade was against them. Their specie went over to England, and, unable to practice that self-denial necessary to bring the specie back, they clamored for a currency. Then the colonies turned pawn-brokers and money-lenders, set up loan offices, and issued banks of paper money. Then whoever held a mortgage, or owned the deed of an acre of land, or was possessed of a silver tankard or a ring of gold, might, if he chose, carry it to the loan office, leave it there, and take away in exchange a number of paper bills.

In this folly Massachusetts led the way, in

1714, with a bank of fifty thousand pounds; New York, Rhode Island, South Carolina, quickly followed, and before seven years were gone the loan office was established in Pennsyl vania and New Jersey.

This was inevitable. The trade of New Jersey was with New York. The people of New York had a paper currency, and paid in paper for every cord of wood and for every boat-load of potatoes that came over the bay. These paper bills of New York, passing current with the farmers of New Jersey, drove out of circulation every pistole, every carolin, every chequin, every piece-of-eight, the bounds of the colony contained; for the ingenuity of man never devised and never can devise a plan for the common circulation of specie and debased paper bills.

Thus, when 1723 came, the people of the Jerseys were paying their debts with the money of New York, and their taxes with bits of plate, ear-rings and finger-rings, watches, and jewelry of every sort. Nor were coins much more plentiful in Pennsylvania. A few light pistoles, a few pieces-of-eight, a few English shillings, passed from hand to hand. But so far were they from supplying the needs of trade that the men of Chester besought the Assembly to make pro... duce a legal tender, to prohibit the exportation of coin, and to add one more shilling to the

Spanish dollar. The merchants of Philadelphia and the traders of Bucks sent up petitions for a paper currency. Most of these prayers were heard. Another shilling was added to the dollar; produce was made a legal tender, and the best of all forms of colonial paper money was emitted. The bank was limited to fifteen thousand pounds; four thousand to pay the debts of the province, and eleven thousand to be loaned to the people. As the law distinctly stated that the new money was to relieve the distress of the poor, no man was suffered to borrow more than one hundred pounds. Nor could he have even that unless he came to the loan office and deposited plate of three times the value, or mortgaged lands, houses, or ground-rents of twice the value of the sum he received, and agreed to pay into the treasury each year five per centum interest and one eighth the principal. So quickly were the bills taken up, and so much were they liked, that another bank of thirty thousand pounds was issued before the year went out.

When the Lords of Trade heard of these proceedings, they hastened to send back a disapproval and a warning. The governor was bidden to recall the evils that had come upon other colonies from making bills of credit. The people were assured that nothing but tenderness