NEW JERSEY PAPER CURRENCY, 1709-1786

By William W. Bradbeer
Cranford, NJ

IN CONJUNCTION WITH other Colonies, New Jersey was required to take an active part against the French in 1709. The Acting-Governor, Richard Ingoldsby, then presented the matter to the Council in this manner:

"At your last meeting, I find in your votes a resolution of your House, for the raysing of £3,000 for Her Majesties service. This, gentlemen, is now become a debt from you to Her Majesty and I think you have nothing else to doe but consider of the ways and means of raysing and paying of your quota of men appointed by Her Majesty for the reduceing of Canada, and all I shall further say to you is to recommend spread and diligence in this affaire and that you would lay aside all other business at this Session. Her Majesties service requiring my speady attendance at Albany and when wee shall meet againe, I doe assure you, there is nothing that can realy tend to Her Majesties service but shall be complyed withall."

The Council then proceeded to authorize an emission of £3,000 in bills of credit, of which each bill was "to he indented at the top or on the left side thereof with the Arms of the Queen of Great Britain." At the same time a committee consisting of Thomas Pike, Elisha Parker, Thomas Farmar and John Royse was appointed to have charge of the engraving, printing, signing and numbering of the bills. The sudden death of John Royse prompted the committee to invite Adam Hude to assist in the work without submitting the matter to the Council. Moreover, the committee ignored the stipulation that the Arms of Great Britain must appear on the bills. Therefore, at the next meeting of the Council, it was resolved:

"That Thomas Pike, Elisha Parker and Thomas Farmar, having contrary to the directions of the Act, caused bills to be printed and stamped only with three lyons passant, instead of the Arms of the Queen of Great Britain, are guilty of a breach of the trust and confidence reposed in them and that Adam Hude by taking upon himself to sign the said bills was illegal."

When the Council met in Perth Amboy in July, 1711, the members voted to emit bills of credit to the value of £5,000 "for levying and raising of money for and toward the encouragement, paying, provision, transportation and other charges for volunteers, to go on an expedition against Canada." The bills were to be in denominations of five shillings to £5. (N. J. Laws, Vol. III, page 481).

The next emission of paper money, amounting to £4,670, or 11,675 ounces of plate, was authorized in 1716 for the purpose of paying the debts of the people who had taken part in the late expedition and for incidental expenses of the government. But when all of the debts were paid there was very little if any money in the treasury. Consequently the people voiced their sentiments in favor of adopting a system of loaning funds at a nominal rate of interest on good security. Governor Burnet also favored such a system. Therefore, in the month of March, 1724, the Assembly agreed to emit £40,000 or 100,000 ounces of plate, in bills of public credit to be loaned to the people at five per cent interest on land or house security, or on plate valued at eight shillings per ounce. It was enacted "that no person shall be allowed to borrow more than £100, or a less sum than £12 1/2." The Loan Office was managed by Josiah Ogden, of Essex, Thomas Farmar, of Somerset, William Trent, of Hunterdon, and Daniel Cox, of Burlington.

Thus commenced in New Jersey a system of loaning bills of credit to the people, a measure void of danger and well calculated to promote the best interests of all the inhabitants.

In March, 1728, an issue of £24,760 was authorized for the purpose of redeeming the outstanding paper currency. Another emission of £25,000 was ordered in July, 1730. Four years later, the Assembly voted to emit £50,000, which was the last issue prior to the time when New Jersey severed her connection with the Colony of New York.

Lewis Morris became Governor of New Jersey in 1738. On May 26, 1739, to the Lords of Trade in England, he stated:

"There is little gold or silver in the Province. Their whole commerce, among themselves [is] managed by means of paper bills of credit, of which there are about £60,000 now current, and in the year 1741 it will begin to sink and grow yearly less. But the whole quantity I am told is not sufficient for the use of the Province and that the people will soon be very pressing for more."

Notwithstanding the concise and potent reasons given by the Governor, the Lords of Trade refused to sanction any further issues of paper currency, except on three conditions, which were as follows: First, the bills of credit to be emitted must not be a legal tender. Second, the bills must be made redeemable by a specified tax upon the people. Third, a clause must be incorporated in the Act authorizing suspension of the action until the King gave His royal assent thereto. Against such an arbitrary decree the New Jersey Council declared:

"If such Acts should pass into law they would be an encroachment upon the fundamental Constitution of the Province and of the Concessions made to the first settlers thereof by His Majesty's royal ancestors. Also destructive of the liberty and properties of His Majesty's subjects and a great discouragement to the future settlement thereof, which must be vastly detrimental to the trade of Great Britain by lessening the consumption of her manufactures."

Despite the forceful reasons embodied in the above resolution, the Colony had to obtain the King's assent to further emissions of currency. British objection to the legal tender clause was absurd, since the bills of credit were not intended to have a circulation in England. Moreover, the ultimate redemption of the currency devolved wholly upon the Colonists.

The King's assent to future emissions of bills of credit depended largely upon whether or not his domain in America was to be again threatened by the French. Therefore, in 1746, when the Colonies were urged to attack the French at Louisburg, the King was glad to approve of emissions of paper money by several of the Colonies, New Jersey issued £17,850 in bills of credit on July 2, 1746, in order to defray the expenses of the troops at Saratoga, which were commanded by Peter Schuyler, of Belleville, N. J. The soldiers were called "Jersey Blues" because their uniforms were made by their wives and mothers and were dyed blue. Again, for the Crown Point expedition, New Jersey was enabled to emit £15,000 in the month of May, 1755, and a like amount in November.

Early in 1756 the Assembly authorized an emission of 10,000 pounds, for the redemption of which assessments were levied on the counties of Middlesex, Salem, Monmouth, Somerset, Bergen, Gloucester, Burlington, Cape May, Hunterdon, Morris and Cumberland. The Assembly met at Elizabethtown in March, 1756, and resolved to stimulate the soldiers to greater deeds of heroism in the war by enacting that "it shall and may be lawful to and for officers of the forces, who are to march into the enemy's country, by a vote of the General Council of war, to certify the particulars of the extraordinary behavior of any action against the enemy, for which any two of the soldiers shall be paid a premium of £10 each and to any four of the said soldiers, £5 each and to any ten soldiers shall be paid £2 each."

On June 22, 1756, the sum of £21,000 was authorized. Events of 1757 necessitated three emissions of paper currency, viz., one of £30,000 in April; another of £10,000 in June, and £30,000 in November. Meanwhile the French remained in possession of Crown Point. Hence in May, 1758, the Assembly resolved to emit £50,000 in denominations of six shillings to £6. This amount sufficed until October, when the sum of £20,000 became necessary. Still the French were not defeated and the expenses did not diminish. Therefore the Assembly voted to authorize an emission of £50,000 in the month of April, 1759, and another of £42,000 in September of the same year.

The war ended in October. Then followed a long period of reconstruction, during which the people needed large sums of money for various purposes. Therefore the Assembly authorized £45,000 in 1760; £30,000 in 1762 and £20,000 in 1763. The war with the Indians, under Pontiac, necessitated an emission of £100,000 in 1764. Soon after peace was declared, the Colony's exchequer was found to be short of funds. Hence when the Assembly met on December 6, 1769, it was declared as follows:

"Whereas the great distress in which this Colony, for several years past, hath been involved for want of a sufficient currency, both as a medium of exchange and to pay debts that compelled very many of the inhabitants to sell their estates, or suffer them to be sold at an accumulated expense by the sheriffs, frequently for less than half their value, by which the merchants, manufacturers and traders in Great Britain and other creditors have been great sufferers, which grievance, in all probability, will much more increase, unless if not speedily remedied;

"And, whereas, until an opportunity offers to procure a supply of bills of credit on the original footing on which they have been usually issued in this Colony, in the present emergency it may be beneficent to have the use of a moderate emission, though the bills, according to the purpose of this Act, should not be a legal tender for payment of debts, but to have their credit upon the undoubted funds of security on which they are issued, which, as hereinafter enacted, being first of individuals mortgaging their estates in double value of the sum borrowed, and then that each respective county being mortgaged in the general to make good the deficiency of individuals, if any such deficiency should happen, by which means the whole Province is by this Act to be mortgaged for the sum intended to be issued;

"And, whereas, the punctuality and care with which the sums heretofore issued in this Colony in bills of credit have been sunk according to the Acts that respectively made them current can leave no room to doubt of the credit of the bills hereby issued, being in that respect properly supported as all other issues in this Colony have been, even so as to increase in credit and demand without danger of depreciation in value, or inconvenience to any individual, though a much larger sum has been current than is hereby emitted;

"Therefore, 'for a present supply and to enable the inhabitants of this Colony the more speedily to pay their debts, extend their settlements, improve and cultivate their lands and for many other good purposes, we the chosen representatives do pray that it may be enacted by the authority of the same that £125,000, of equal value with the Proclamation money of' this Colony, shall be printed, made and prepared in bills of credit.'"

It was further enacted, "that out of the total amount to be issued, £25,000 shall be used to redeem such bills as are torn and ragged." (N. J. Laws of 1769, pages 2S to 29).

On March II, 1774, the Assembly proclaimed as follows:

"Whereas through the great scarcity of gold and silver within this Province, daily increasing from the purchase of the manufactures necessarily imported from Great Britain and the constant sinking of the bills of credit emitted during the late war for His Majesties service, the inhabitants of this Colony are greatly obstructed in extending their settlements improving and cultivating their lands, and he under great difficulties in paying their just debts, Be it enacted by the Governor, Council and General Assembly, that the sum of £100,000 shall be printed, made and prepared in bills of credit."

William Franklin was the Royal Governor of New Jersey at this time and he remained as such until 1776, when he was deposed. Early in 1775, Governor Franklin was urged to obtain permission from the King for another emission of paper currency. Permission was granted, but with the stipulation that a portion of the money must be sent to erect a suitable mansion for Governor Franklin. Such a proviso was displeasing to the people and served to intensify their desire for freedom and independence. Consequently, on May 23, 1775, a Provincial Congress of deputies from the counties of Bergen, Essex, Middlesex, Morris, Somerset, Sussex, Monmouth, Hunterdon, Burlington, Gloucester, Cumberland, Salem and Cape May assembled at Trenton. When organized, the Congress declared:

"Whereas, it is absolutely necessary to provide a fund for defraying the expense of equipping and maintaining troops for the Continental army, it is therefore resolved and directed that bills of credit to the amount of £30,000, Proclamation money,; be immediately prepared, printed and made as follows, to wit."
American Archives, Vol. 3, page 1241

On February 20, 1776, the Provincial Congress of New Jersey authorized an emission of £50,000 in bills of credit. Evidently such an amount was grossly inadequate to meet the current expenses, for on March 25, 1776, the Congress voted to authorize an emission of £125,000 in denominations of one shilling to £6; all of which were to be printed on paper watermarked "New Jersey."

It is remarkable that no further issues of paper currency was authorized by the Assembly until June 9, 1780, when the sum of $225,000 was provided for in denominations of one dollar to twenty dollars. The bills were to bear five per cent and to be redeemable in Spanish milled dollars on December 31, 1786. The above mentioned emission was authorized to pay the State's quota of the Continental tax. Prior to 1781 the people became anxious for bills of smaller denominations, since the smallest bill had hitherto not been for less than one shilling. Therefore, on January 9, 1781, the Assembly authorized £30,000 in denominations of six pence to seven shillings and six pence.

On December 20, 1783, the sum of £31,260 was issued to meet the contingent expenses of the government. About four months later the State Treasurer was authorized to sign promissory notes for various amounts, in order to benefit those who had served the State in the late war. The form of the promissory notes was as follows.

"The State of New Jersey is indebted unto ______________ of the County of ___________ in the sum of ______________ being for military service, which said sum shall be paid unto the said ______________ or his representatives in specie with interest at the rate of six per cent per annum until paid. Witness my hand this ____________ day of ________ "(1784).

The final issue of bills of credit by New Jersey was authorized on May 17, 1786, when the sum of £100,000 was emitted for the ostensible purpose of supplying the people with a much needed medium of barter and exchange.

The total amount of paper currency emitted by New Jersey during the period 1709 to 1786 exceeded £1,250,000.