In the first half of the 18th Century, the colonies suffered greatly from a shortage of money in circulation, the result of which was an unsanctioned scheme to print currency in Massachusetts, led in no small part by several Ipswich men. In September 1740, the Land Bank began to issue 50,000 pounds of notes of varying amounts without legal authorization of the Crown and over the objections of the governor and his Council.
Sue Nelson commented on the Land Bank scheme of 1740-41:
“What began as an effort of land owners and artisans to use their work products as currency ended as a populist movement opposed by the merchant classes who had access to coinage. As many as 5000 Land Bank supporters were reported to have marched in Boston in a populist revolution against the merchants’ and royal government’s stranglehold on the economy. The kiss of death was an act of Parliament essentially making the Land Bank supporters treasonous. A number of prominent Ipswich men were involved including John Choate and Andrew Burley, as well as Abraham Knowlton. Punitive damages were assessed and if not for a “fortuitous ” fire which destroyed some of the lists of participants many families would have been ruined. Some including Knowlton were identified and suffered accordingly. Choate and Burley survived the crisis and later prospered. Another extremely important loser was Samuel Adams, father of the Samuel Adams who is known as the Revolutionary patriot. His family was impoverished as it is probably not coincidental that the son struck back. I think of these events as the largely unexplored precursor events of the Revolution that followed.”
History of the Land Bank Scheme
by Thomas Franklin Waters (copied in part)
In 1727 the General Court recognized the scarcity of money by allowing the Province tax to be paid in commodities and manufactured goods at specified prices. The Collectors of the tax were instructed by the Town to receive the sums assessed upon the freeholders and inhabitants,and payment could be made in wheat, rye, barley, oats and Indian com, in fish, beef and pork, flax and hemp, butter, bees wax, bay-berry wax, and many other products “all which species shall be of the growth, produce & manufacture of this Province.”
By mid-summer of 1731, the Province treasury was empty. An appeal was made to the Towns, and an Ipswich Town meeting was called for September 7. The representation from the House of Representatives was read and a considerable debate was had. Thereon the motion was me & seconded, “Whether the Town will choose a Committee to prepare Instructions for our Representatives in the weighty affair of Supplying the province Treasury and report their Opinions to the Town thereon.” The motion was defeated, as well as the motion to give any advice or instruction to the Ipswich representatives, reminiscent of the tax revolt of 1687 for which Ipswich is known as the “Birthplace of American Independence.”
Jonathan Fellows and Mr. John Choate, Jr. were the representatives that year. Mr. Choate was serving his first term. He was a young man of thirty-four years, a lawyer by profession, though not a college graduate, and the confidence reposed in him by the Town in this serious juncture is a fine tribute to his ability. He was destined to have a very conspicuous part in the financial wrangles of this period and in the sharp variances with the Royal Governor of the Province.
In February, 1736-7, a new issue of bills of credit was made of £18,000 “of the present form” and £9000 in bills of a new form. These were called the “New Tenor” bills, and it was specified that they had a fixed value in gold or silver. A new complexity was now introduced, as henceforth all values were computed in both Old Tenor and New Tenor.
Two rival schemes for bettering the financial situation arose from the population and assumed great prominence. In December, 1740, John Colman, who had been a prominent figure in the financial debates for many years, secured nearly four hundred subscribers to a scheme for emitting bills, secured by mortgages on the real estate of those who held the loans. The company desired incorporation, but the Governor and Council were opposed, action on the petition was delayed and eventually the company issued its bills without incorporation. These bills were signed by some of the directors, and were in the form of a promise in behalf of the signers and their partners to receive the same in all payments at the expressed value, lawful money, six shillings and eight pence per ounce, and after twenty years to pay the same in the produce or manufactures enumerated in their scheme.
This was known as the “Land Bank” or “Manufactory Scheme.” The Directors of the Land Bank were Robert Auchmuty, William Stoddard, Samuel Adams, father of the Revolutionary patriot, Peter Chardon, Samuel Watts, John Choate, Thomas Cheever, George Leonard and Robert Hale. Mr. Choate became prominent at once in the fight for incorporation. The Committee of the General Court, appointed to investigate these rival schemes, reported adversely to the Land Banks in March, 1739-40, but the House voted to refer this and the alternative “Silver Scheme” to the May session, both companies being prohibited from issuing notes in the meantime.
When the Assembly met, the Governor and Council were hostile to the Land Bank but in favor of the Silver Scheme. The House was in hearty sympathy with the Land Bank. Petitions from the towns were filed, favoring or opposing each scheme. The Ipswich petition, written by John Choate, made a vigorous appeal for the Land Bank, which was very popular in this community, signed by John Choate, Francis Choate, Andrew Burley, Nathaniel Wells, Robert Choate, Jacob Pirkins, John Boardman, John Fuller, James Eveleth, John Perkens, Thomas Choate, Jr., and William Dodge.
The Land Bank grew rapidly in popular favor. On July 30, upwards of 800 subscribers were enrolled. Six of the leading members of the House were Directors and many of the members were subscribers. The subscriptions were for small sums, in the main, and the friends of the Silver scheme, whose subscriptions were notably large, twitted the Land Bank people that their supporters were people of the com mon class. The contest grew bitter and personal.
The merchants of New England petitioned Parliament to forbid the continuance of the Land Bank. Gov. Belcher threatened to remove supporters of the Bank from office. Justices of the Peace, who had been commissioned by the Governor, did not wait removal. They sent him their resignations. John Choate was one of the first to resign, along with Samuel Adams. Major Ammi Ruhamah Wise of Ipswich, who also held the commission of a Justice of Peace, with several others, was removed from office on Jan. 1, 1741, for receiving and passing the notes of the Land Bank “and persisting therein.”
The Registers of Deeds were commanded to send in the names of all who had mortgaged their property. A Proclamation was issued by the Governor, forbidding all persons holding commissions in the militia “to have any hand in this scheme for defrauding the people”; (Nov. 1, 1740) and on Dec. 11, orders were issued to Col. Berry and the other commanding officers to investigate their subordinates and discharge all involved.
Andrew Burley of Ipswich was summoned to appear before the Governor and Council. His reply was not lacking in cool defiance.
“Worthy Sir : As to the complaint Exhibited against me for Receiving and Passing Manufactory Bills Since His Excellency’s Proclamation, I freely acknowledge I have Done and am determined so to do at present. I am Sir, Your humble Servant, Andrew Burley. December 31, 1740.”
While the final decision as to the Land Bank was still pending, a bank was organized and a petition for incorporation was addressed to the General Court by Edward Eveleth, Ebenezer Stevens and John Brown. The Council voted to refer the petition to a joint Committee but the House refused to concur.
This bank actually printed and circulated notes of small denominations, dated at Ipswich, May 1, 1741 and were payable to the order of Mr. James Eveleth. The Land Bank was very popular in Ipswich, and a dozen town leaders issued a vigorous appeal to the governor: “The Petition of us the Subscribers and Inhabitants of the Town of Ipswich being apprehensive, the land Bank Scheme now under your Consideration may, with former amendments & alterations not at all destructive of its Essence, be greatly serviceable to the people of this Province.”
A new Assembly met on May 27, 1741. The Ipswich Representatives were John Choate and Richard Rogers. Samuel Watts, a Director of the Land Bank was chosen Speaker, but the Governor disapproved this choice. William Fairbanks, a supporter of the Bank, was then chosen and the election was approved, but as the Assembly was evidently in favor of the Bank the Governor dissolved it and ordered a new election. John Choate and Andrew Burley were chosen the Representatives from Ipswich and when the new House met, it organized with the choice of Mr. Choate as Speaker and the Governor again sharply disapproved. John Hobson was then chosen and the business of the session was begun.
An Act of Parliament declared all the transactions of the two Bank Schemes illegal and void and ordered that they should be entirely abandoned on or before Sept. 29, 1741, under penalty of treble damages. This Parliamentary interference, as it was regarded by the friends of the Land Bank, was bitterly resented and there were signs of a violent uprising in several towns. Had Governor Belcher remained in power, it is possible and even probable that the first collision with Great Britain would have occurred at this time. Happily his successor, Gov. Shirley, appreciated the extreme delicacy of the situation. He found the Land Bank party, which was very numerous throughout the Province, irritated and inflamed to such a degree that they seemed ripe for tumult and disorder.
Two thirds of the members of the House of Representatives were either partners or abettors of the Land Bank Scheme and a general opposition by them to all the measures of the Government was feared. Wiser counsels prevailed and on Sept. 28, the Directors declared that the scheme was relinquished, although there was stormy opposition. The Silver scheme had already been abandoned.
The settlement of the Land Bank still remained incomplete. The names of the following Ipswich subscribers and partners have been preserved in s the Archives of the Commonwealth, with fines ranging from £100 to £500: Thomas Adams, John Boardman, John Brown, Andrew Burley, Francis Choate, John Choate, Thomas Choate, Jr., Parker Dodge, Benjamin Dutch, Edward Evelyth, Benjamin Gilbert, Joseph Gilbert, Joseph Fowler, Abraham Knowlton, Ebenezer Knowlton, Samuel Knowlton, John Patch, Jacob Perkins, John Perkins, Samuel Rogers,Timothy Wade, John Whipple, Jr., Joseph Whipple, Jr., Ammi R. Wise, Daniel Wise.
An Act of February, 1759, to finish the business, authorized an assessment of £3000 on such surviving members as the “Commissioners should judge of ability as to estate.” The Commissioners assessed the Ipswich members on September 8, 1763. On March 22, 1764, the Commissioners levied another assessment. The Commissioners advertised in the Evening Post on August 27, 1765, that a large portion of the assessments remained unpaid and that they should proceed to collect on October 4.
Col. Choate was cordially supported by the majority of his fellow citizens. He was elected to the House every year until 1750 and in several subsequent years.
The arbitrary suppression of the Land Bank compelled men to face the question whether such legislation as that through which the closure was accomplished could possibly be tolerated by a free people. It may be true, as has been affirmed, that the long and heated currency conflict led up to those consultations of the Representatives with the Selectmen of the towns which probably suggested the Committees of Correspondence through which so much was accomplished in the days of the Revolution.
After the Revolution, the U.S. the government coined gold and silver but did not take responsibility for printing paper money as its responsibility. Because the Constitution prohibited states from printing money, local banks became the primary suppliers of paper currency. The First Bank of the United States established in 1791 and the Second Bank of the United States established in 1817 were attempts to bring order to the currency system by issuing their own notes, but private bank notes continued to proliferate.
National Bank Notes were United States currency issued by local national banks chartered by the United States Government and backed by United States bonds. The First National Bank Of Ipswich under charter 4774 issued $973,790 dollars worth of national currency in 9 different denominations between 1892 and the Great Depression, when National Bank Notes were replaced by Federal Reserve Notes.
- Read the full article from Ipswich in the Massachusetts Bay Colony by Thomas Franklin Waters.