Roger Sherman: “A Caveat against Injustice”

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Forasmuch, as there have many Disputes arisen of late concerning the Medium of Exchange in this Colony, which have been occasioned chiefly by Reason of our having such large Quantities of Paper Bills of Credit on some of the Neighbouring Governments, passing in Payments among us, and some of those Governments having issued much larger sums of Bills than were necessary to supply themselves with a competent Medium of Exchange, and not having supplied their Treasuries with any Fund for the maintaining the Credit of such Bills; they have therefore been continually depreciating and growing less in their Value, and have been the principal Means of the Depreciation of the Bills of Credit emitted by this Colony, by their passing promiscuously with them; and so have been the Occasion of Much Embarrasment and Injustice, in the Trade and Commerce of the Colony, and many People and especially Widows and Orphans have been great Sufferers thereby.

But our Legislature having at length taken effectual Care to prevent further Depreciation of the Bills of this Colony, and the other Governments not having taken the prudent Care, their Bills of Credit are still sinking in their Value, and have in Fackt sunk much below the Value of the Bills of this Colony.

Yet some People among us, by long Custom, are so far prejudiced in Favour of a sinking Medium, and others not being really sensible of the true State of the Case, are inclined to think that Bills of Credit on the neighbouring Governments ought to be a legal Tender in Payments in this Colony for all Debts due by Book and otherwise wheere there is no special contract expressly mentioning some other Currency, and others being of a different Opinion, the Disputes have been carried on so far, as to occasion some Expence in the Law, and may be likely to occasion much more, unless prevented by those Prejudices being some way removed. And since it is a Cause wherin every one is more or less interested, I have ventured to shew my Opinion, with a sincere Desire to have Peace and Justice maintained and promoted in the Colony. Not desiring any Person to approve of my Observations any farther than he finds them agreeable to the Principles of Justice and right Reason.

THE CASE STATED

Suppose a Man comes to a Trader’s Shop in this Colony to buy Goods, and the Trader sells him a certain Quantity of Goods and tells him the Price is so many Pounds, Shillings and Pence, (let it be more or less) to be paid at the Expiration of one Year, from that Time, and the Man receives the Goods but there is nothing said either by Seller or Buyer, what Currency it is to be paid in, but the Goods are charged according to the Value of Bills of Credit Old Tenor on this Colony.

Now I Query what the Creditor has a Right to demand for a Debt so contracted; or what the Debtor can oblige him to accept in Payment?

The Creditor says, that the Debt being contracted in the Colony of Connecticut, he ought to have what is known by the Laws of said Colony to be Money: And that he has no Right to demand any thing else.

The Debtor says, That Bills of Credit on the neighbouring Governments have for many Years passed promiscuously with the Bills of Credit on this Colony as Money in all Payments, (except special Contracts) and that People in general where the Contracts by at large have expected, and do still expect, that any of the Bills of Credit on any of the Governments in New-England, that have obtained a Currency in this Colony will answer in Payment, and in as much as the Creditor did not give him any Notice to the contrary, when he bought the Goods, therefore he thinks that such Bills of Credit ought to be accepted in Payment for the aforesaid Debt.

And altho’ there is no particular Statute in this Colony, that such Bills of Credit shall be a legal Tender in Payments of Money: Yet the Practice has been so universal for so long a Time, and the Creditor himself has both received and pass’d them as Money constantly without making Exceptions against them ‘till this Debt was contracted, and for many Years all Demands on Book Debts have been for Old Tenor Money indifferently, without Distiction of Colonies, and Judgements in all Courts have been given thereon accordingly: And any of the aforesaid Bills of Credit have pass’d in Payment to satisfy all Judgements, so obtain’d and this universal Custom, the Debtor saith, ought to be esteemed as common Law and ought not without some special Reason to be set aside, and that in this Case there is nothing special; and therefore the Creditor ought not to make Demand or obtain Judgement different from the common Custom of the Colony.

In Answer to this the Creditor saith, that altho’ Bills of Credit on the neighbouring Governments have for a Number of Years been pass’d and receiv’d in Payments: Yet it has been only by the voluntary Consent of the Persons receiving them, and not because they were under any Obligation to receive them; and that it is no Argument that a Person shall be obliged to receive any Species where it won’t answer his End, because in Time past he has receiv’d it when it would answer.

And the Creditor furthur saith, that such Bills of Credit are of no intrinsick Value, and their Extrinsical Value is fluctuating and very uncertain, and therefore it would be unjust that any Person should be obliged to receive them in Payment as Money in this Colony, (since neither the Colony nor any of the Inhabitants thereof are under any Obligation either to Refunds said Bills or to maintain the Credit of them) for Money ought to be something of certain Value, it being that whereby other Things are to be valued.

And I think it is a Principle that must be granted that no Government has Right to impose on its Subjects any foreign Currency to be received in Payments as Money which is not of intrinsick Value; unless such Government will assume and undertake to secure and make Good to the Posessor of such Currency the full Value which they oblige him to receive it for. Because in so doing they would oblige Men to part with their Estates for that which is worth nothing in it self and which they don’t know will ever procure him any Thing.

And Rhode-Island Bills of Credit have been so far from being of certain Value and securing to the Posessor the Value that they were first stated at, that they have depreciated almost four seventh Parts in nine Years last past, as appears by their own Acts of Assembly.

For in the year 1743, it appears by the Face of the Bills then emitted that Twenty-seven Shillings Old-Tenor was equal to one Ounce of Silver. And by an Act of their General Assembly pass’d in March last, they stated Fifty-four Shilling Old-Tenor Bills equal to one Ounce of Silver, which sunk their Value one half. And by another Act in June last, (viz. 1751) they stated Sixty-four Shillings in their Old-Tenor Bills equal to one Ounce of Silver. And by another Act in August last they gave Order and Direction to the Courts in that Colony to make Allowance to the Creditors in making up Judgement from Time to Time as the Bills shall depreciate for the Future, which shews that they expect their Bills of Credit to depreciate for the Future.

And since the Value of The Bills of Credit depend wholly on the Rate at which they are stated and on the Credit of the Government by whom they are emitted and that being the only Reason and Foundation upon which they obtained their first Currency and by which the same has been upheld ever since their first being current and therefore when the Publick Faith and Credit of such Government is violated, then the Reason upon which such Bill obtained their Currency ceases and there remains no Reason why they should be any longer current.

And this I would lay down as a Principle that can’t be denied that a Debtor ought not to pay any Debts with less Value than was contracted for, without the Consent or against the Will of the Creditor.

And the Creditor further saith, that his accepting Rhode-Island Bills of Credit when they stood stated equal to Silver at Twenty-seven Shillings an Ounce, can be no Reason that he should receive them at the same Value when they are stated equal to Silver at Fifty-four Shillings an Ounce, and still to receive them at the same Rate when they are so reduced down that Sixty-four Shillings is equal to but one Ounce of Silver, and whoever does receive them so must not only act without, but against Reason.

And the Debtor can’t possibly plead without any Truth that he expected to pay in Rhode-Island Bills of Credit at their present Value and under their present Circumstances, (any Debts contracted before the aforesaid Acts of Rhode Island were published) because there was no such Thing (as those Bills are under their present Circumstances) existing at the Time of Contract, for as was observ’d before, the Value of such Bills of Credit depend wholly upon the Rate at which they are stated and on the Credit of the Government by whom they are emitted, and a Bill of Credit for the same Sum that is stated equal to Silver at Twenty-seven Shillings an Ounce, must be of more than double the Value of one stated equal to Silver at Sixty-four Shillings an Ounce if the Credit of the Emitter may be depended on: But if the Emitter’s Credit can’t be depended on then neither of the Bills aforesaid are of any Value, because it is evident that no Bills of Credit have any Value in themselves, but are given to secure something of intrinsick Value, to the Posessor.

So that the Arguments draw from Custom are of no Force, because the Reasons upon which that Custom were grounded do now cease.

I grant that if any Thing whose Value is intrinsical and invariable the same should obtain a Currency as a Medium of Exchange for a great Number of Years in any Colony, it might with some Reason be urg’d that it ought to be accepted in Payments for Debts where there is no special Agreement for any other Species.

But if what is us’d as a Medium of Exchange is fluctuating in its Value it is no better than unjust Weights and Measures, both which are condemn’d by the Laws of GOD and Man, and therefore the longest and most universal Custom could never make the Use of such a Medium either lawful or reasonable.

Now suppose that Gold or Silver Coines that pass current in Payments at a certain Rate by Tale should have a considerable Part of their Weight filed or clipp’d off will any reasonable Man judge that they ought to pass for the same Value as those of full Weight?

But the State of R … I … d Bills of Credit is much worse than that of Coins that are clipp’d, because what is left of those Coins is of intrinsick Value: But the General Assembly of R … I … d having depreciated their Bills of Credit have thereby violated their Promise from Time to Time, and there is just Reason to suspect their Credit for the Future for the small Value which they now promise for said Bills, and they have not only violated their Promise as to the Value, pretended to be secured to the Posessor by said Bills; but also as to the Time of calling them in and paying the same, they have lengthened out the Time Fifteen Years.

So that if the Posessor must be kept out of the Use of his Money until that Term is expired (and the Bills secure nothing to him sooner.) One Ounce of Silver paid down now, would be worth more than Seven pounds Ten Shillings in such Bills of Credit computing the Interest at 6 per Cent per Annum.

These Things considered, can any reasonable Man think that such Bills of Credit (or rather of no Credit) ought to be a legal Tender in Payment of Money in this Colony for Debts, for which the Debtor received Species of much more Value than those Bills provided the Creditor could get the full Value of them in Silver that they are now stated at.&thin;…

But to impose Rhode-Island Bills of Credit in Payments for Debts in this Colony when the Creditor never agreed to take them, and that without any Allowance for the Depreciation, would be to take away Men’s Estates and wrong them of their just and righteous Dues without either Law or Reason.

And instead of having our Properties defended and secured to us by the Protection of the Government under which we live; we should be always exposed to have them taken from us by Fraud at the Pleasure of other Governments, who have no Right of Jurisdiction over us.

And according to this Argument, if Rhode-Island General Assembly has been pleased last June to have stated their Old-Tenor Bills equal to Silver at Forty-eight Pounds Twelve Shillings an Ounce, instead of Sixty-four Shillings, and to have cut off the Value of them Eighteen Shillings on the Pound, instead of Three Shillings, all Creditors in this Colony would thereby have been necessitated to lose Ninety Pounds out of every Hundred Pounds of their Debts which were then out standing, for if they could take away one Sixth Part of their Value and reduce them so much below the Old-Tenor Bills of this Colony and the Creditor be notwithstanding obliged to receive them without Allowance, by the Rule they might have taken away three Quarters of Nine Tenths or indeed the whole, and the Creditor have had no more Remedy than he has now.

And the Estates of poor Widows and Orphans must according to this Principle in the same unjust Manner be taken away from them and given to others that have no Right to them, (for what the Creditor loses in this way the Debtor gains because the more the Bills of Credit depreciate the less Value the Debtor can produce them for) and according to the Debtor’s Arguement the Executive Courts in this Colony must give Judgement in Favour of all this Fraud and Iniquity at least, ‘till there is some special Act of Assembly to order them to the contrary; but I believe that every honest Man of Common Sense, upon mature Consideration of the Circumstances of the Case, will think that this is an Iniquity not to be countenanced, but rather to be punished by the Judges.&thin;…

But it may be further objected, that if it were not for the Bills of Credit on the neighbouring Governments, we should have no Money to Trade with, and what should we do for a Medium of Exchange? or how could we live without?

To this I answer, that if that were indeed the Case, we had better die in a good Cause than live in a bad one. But I apprehend that the Case in Fact is quite the reverse, for we in this Colony are seated on a very fruitful Soil, the Product whereof, with our Labour and Industry and the Divine Blessng thereon, would sufficiently furnish us with and procure us all the Necessaries of Life and as good a Medium of Exchange as any People in the World have or can desire.

But so long as we part with our most valuable Commodities for such Bills of Credit as are no Profit; but rather a Cheat, Vexation and Snare to us, and become a Medium whereby we are continually cheating and wronging one another in our Dealings and Commerce.&thin;…

And with Submission I would humbly beg Leave to propose it to the wise Consideration of the Honourable General Assembly of this Colony; whether it would not be conductive to the welfare of the Colony to pass some act to prevent the Bills last emitted by Rhode-Island Colony from obtaining a Currency among us.

And to appoint some reasonable Time (not exceeding the Term that our Bills of Credit are allowed to pass) after the Expiration of which none of the Bills of Credit on New Hampshire or Rhode-Island, shall be allowed to pass in this Colony, that so People having previous Notice thereof may order their Affairs so as to get rid of such Bills to the best Advantage that they can before the Expiration of such Term.

And whether it would not be very much for the Publick Good to lay a large Excise upon all Rum imported into this Colony or distilled herein, thereby effectually to restrain the excessive use thereof, which is such a growing Evil among us and is leading to almost all other Vices.

And I doubt not but that if those two great Evils that have been mentioned were restrained we should soon see better Times.