ben franklin prints money -- 2/18/14

In today selection -- from Book of Ages by Jill Lepore. Though modern day commentators and economists assail the practice of "printing money," it has been a widespread practice in America since its founding. One of the most prominent early practitioners was no less a figure than Ben Franklin himself -- and he earned more from printing money than from his famous Poor Richard's Almanack. Money was simply a tradeable IOU or debt, and those that incurred too much debt entered prison. The problem of debtors was so pervasive and prisons so populous in early America (two out of three people who left England for America were troubled debtors) that in some prisons a debtor's family stayed with him and prisoners established their own constitutions and courts to enforce their own laws:

[Ben Franklin and the other colonists] lived in a world of paper credit. The 'IOU,' as parlance, dates to the 1610s. The first paper money in the colonies -- the first official paper money anywhere in the Western world -- was printed in Boston in 1690. Debt might be a crime and, worse, a sin, as Cotton Mather preached in a 1716 sermon titled Fair Dealing between Debtor and Creditor, but 'without some Debt, there could be no Trade ... carried on.' In Philadelphia, the first paper money wasn't printed until 1723. It was widely regarded as suspicious, until, in 1729, [Benjamin] Franklin advocated it in a pamphlet he both wrote and printed: A Modest Enquiry into the Nature and Necessity of a Paper Currency. It would be good for trade, he said.

Twenty Shilling note printed by B. Franklin

"In 1729, Franklin began printing forms for borrowing, slips of paper, to be filled out by hand. ... Soon he was printing money, not only for Pennsylvania but also for Delaware and New Jersey. Between 1729 and 1747, he printed 800,000 paper bills, earning about £1,000. (Eventually, he made more money printing money than he did from the Pennsylvania Gazette and Poor Richard's Almanack combined.) ...

"In a world of paper credit, people fell into paper debt, for which they were thrown into prison. ... For a long time, the colonies had been a debtors' asylum. Two out of three people who left England for America were debtors; creditors found it all but impossible to pursue debtors across the Atlantic. Defoe's fictional Moll Flanders, born in London's Newgate prison sailed to Virginia; Roxana, another of Defoe's heroines, stayed in London and died in debtors' prison. (Defoe was himself twice arrested for debt.) In the seventeenth century, Virginia and North Carolina, hungry for settlers, promised five years' protection from Old World debts. Connecticut and Maryland, desperate for labor, forbade the prosecution of debtors between May and October and released prisoners to plant every spring and to harvest come fall.

"Massachusetts [in 1641] was stricter. ... A man was free unless he couldn't afford to pay what he owed, and then he could be put in prison, the cost of which he had to bear. The idea was that a debtor might be hiding his money and, if he wasn't, his family would pay his debts to secure his release. ...

"When you run in Debt you give to another Power over your Liberty, Poor Richard says. ... Creditors have better memories than debtors. ...

"Debtors consigned to prison often found it very difficult to get out. When a man was arrested for debt, his wife and children often went to prison with him, having no place else to go. Debtors in New York City's prison -- where a man and his family might stay for years -- established their own constitutions and courts and elected their own sheriffs, to enforce the laws."


author:

Jill Lepore

title:

Book of Ages: The Life and Opinions of Jane Franklin

publisher:

Alfred A. Knopf, a division of Random House

date:

Copyright 2013 by Jill Lepore

pages:

68-70, 73
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