A Caveat Against Injustice
or, An Inquiry into the Evils of a Fluctuating Medium of
WHEREIN is considered, whether the Bills of Credit on
the Neighboring Governments, are a legal Tender in Payment of Money, In the
COLONY of CONNECTICUT for Debts due by Book, and otherwise, where the Contract
Mentions only Old-Tenor Money.
by Roger Sherman
Article 1 Section 10 of the United States Constitution, “No State shall
make any Thing but
Gold and Silver Coin a tender in Payment of
Original publication, 1752
§1 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 witha 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.
§2 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 (1) in their Value, and have in Fackt sunk much below the Value of the
Bills of this Colony.
§3 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 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
§4 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 som 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.
§5 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?
§6 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.
§7 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 ly 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.
§8 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, adnd 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.
§9 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.
§10 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. (2)
§11 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 Possesor 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
§12 And Rhode-Island Bills of Credit have been so far from being of
certain Value and securing to the Possessor 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.
§13 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.
§14 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 therefor e 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
§15 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.
§16 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.
§17 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.
§18 So that the Arguments draw from Custom are of no Force, because
the Reasons upon which that Custom were grounded do now cease.
§19 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.
§20 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
§21 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?
§22 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.
§23 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
§24 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.
§25 For it must be remembered that according to the State of the
Case now in Question the Goods were charged according to the Value of Old-Tenor
Bills of this Colony. Wherefore upon the whole it appears that it would be
evidently unjust to impose Rhode-Island Bills of Credit in payment for such a
Debt, or any other in this Colony, unless the Creditor obliged himself by a
special Agreement to receive them in Payment.
§26 And if he had agreed to receive them in Payment for Debts
contracted any Time between last March and June it would be unjust to oblige
him to take them without three Shillings on the Pound Allowance, for the
General Assembly of Rhode-Island depreciated them so much in June below both
their current and stated Value in March preceding.
§27 And to oblige People to receive them without such Allowance in
this Colony; would be, to more dishonest than they are in Rhode-Island Colony
for they are obliged by Law to make Allowance for the Depreciation.
§28 But in as much as we are not under the Jurisdiction of
Rhode-Island Government and therefore can take no Benefit by equitable Acts, I
suppose that according to the Rules of the Law, upon a Contract made in this
Colony for the Payment of Bills of Credit on the Colony of Rhode-Island or any
of the neighbouring Governments,
§29 if the Debtor could not produce such Bills under the same
Circumstances that they were at the Time of Contract, the Courts would assess
Damages for Connecticut Money, according to the Value of such Bills at the Time
§30 And the Reason is, because if on the one Hand all such Bills
should be called in and burnt between the Time of Contract and the Time of
Payment it would be unreasonable to oblige the Debtor to an impossibility, and
on the other Hand if there should between the Time of Contract and the Time of
Payment be an Act pass'd that all such Bills should be brought into the
Treasurer to be redeem'd by a certain Time or else be Outlawed and rendered of
no value and that Time should be expired before the Time of Payment, or if by
an Act of Assembly they should be depreciated and sunk one half or two thirds
of their Value, it would be unreasonable that the Creditor should be thereby
defrauded of his just Due and lose so much of his Estate.
§31 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
§32 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.
§33 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.
§34 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
§35 But in Answer to what is said concerning Demands being made for
Old-Tenor Money indifferently and the Courts giving Judgement accordingly. The
Creditor saith that Phrase in all Demands made in this Colony ought to be
understood to be the Old-Tenor Money of this Colony, and no other, for there
never was any Law in this Colony that Bills of Credit on the neighbouring
Governments should be a legal Tender in Payments of Money, and I have observed
before that it would be unreasonable, that any such Foreign Currency should be
imposed as Money, and the same Phrase is us'd in taxing Bills of Cost in the
Executive Courts, but it is understood to be the Old-Tenor Money of this Colony
only, for a Thousand Pounds in Bills of Credit on the neighbouring Governments
would not be sufficient in the Law to satisfy a Bill of Cost of Twenty
§36 And the General Assembly of this Colony have sufficiently
declared that they don't Esteem such Bills of Credit as Money, and that no
Person ought to be obliged to receive them as such. In that, they themselves
will not receive them for their Wages, neither do they oblige any other Person
whose Fees or Wages are stated by Law to receive them, but have made Provision
how they shall be paid exclusive of such Bills.
§37 And as to the Objection that they have been receiv'd in Payment
to satisfy all Judgements given as aforesaid, the Creditor faith, that it was
only by the same reasons that they should be received now at the same Value as
Bills of Credit on this Colony that there was formerly because it is evident
that there is now a real Difference in their Values.
§38 For by a Law of the Province of the Massachusets-Bay, their
Bills of Old-Tenor are stated equal to Silver at Fifty Shillings an Ounce and
Seven Shillings and Six Pence are equal to One Shilling Proclamation Money, and
the Executive Courts in this Colony reckon Eight Shillings Old-Tenor Bills of
this Colony equal to One Shilling Proclamation Money which is equal to Silver
at Fifty-four Shillings Old-Tenor an Ounce.
§39 And by an Act of Rhode-Island General Assembly Sixty four
Shillings of their Old-Tenor Bills is stated equal to one Ounce of Silver, at
which Rate nine Shillings and Six pence is equal to but One Shilling
Proclamation Money, whereas three Years ago the Bills of Old-Tenor on all the
three Governments aforesaid were of equal Value.
§40 And since it appears, that there is such a Difference in the
stated Value of the aforesaid Bills of Credit, no Man can with any Propriety be
said to make them all without Distinction, a Standard to value Things by; for a
Man could afford to sell any Goods or Merchandize for a less Sum in Old-Tenor
Bills of the Massachusets-Bay, than for the Old-Tenor Bills of this Colony and
he could afford to sell Goods for a less Sum by 15 per Cent for the Old-Tenor
Bills of this Colony, than for the Old-Tenor Bills on Rhode-Island Colony.
§41 And to say that an Accompt is charged in Old-Tenor Money
indifferently of this and the neighbouring Governments, is to say that 7s.-6d.
and 8s. and 9s.-6.d are one and the same Sum, or that there is no Difference
between Fifty and Fifty-four, or between Fifty-four and Sixty-four Q.E.D.
§42 And since it appears that it would be evidently absurd to make
a Demand for old-Tenor Money indifferently of this and the neighbouring
Governments, it follows that all Demands made for Old-Tenor Money in this
Colony must be for the Money of this Colony exclusive of the Old-Tenor of the
neighbouring Governments, or else for the Old-Tenor Money of some one of the
other Governments exclusive of the Old-Tenor of this and the rest.
§43 And since nothing but a special Contract can intitle any Person
to demand the Money of any other Government, for a Debt contracted and demanded
in this Colony: It necessarily follows, that all Demands for Debts due by Book,
where the Contract lyes at large must be for the Money of this Colony only.
§44 What I would be understood to mean by Old-Tenor Money of the
Colony of Connecticut is, whatsoever is established by Law in said Colony to
pass as, or in Lieu of Money, rated according to its Value in Old-Tenor Bills
on said Colony, and I supposed that the Words (Old-Tenor) when us'd in
Contracts are universally understood to be intended only to assertain the Value
of the Sum to which they are affixed and they must be so understood when the
Executive Courts tax Bills of Cost in Old-Tenor Money, for they have no Right
neither do they mean to exclude Bills of the New-Tenor, or any of those Coins
established by Law (to pass in Payment for Fees) from being a sufficient Tender
in Payment of such Costs.
§45 And now I have gone through with what I first proposed, But
perhaps some, may be ready to say, that we are sensible that it is of bad
Consequence to have a fluctuating Medium of Exchange, but what can be done to
§46 I answer take away the Cause, and the Effect will necessarily
§47 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
§48 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.
§49 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.
§50 And so long as we import so much more foreign Goods than are
necessary, and keep so many Merchants and Trader employed to procure and deal
them out to us: Great Part of which, we might as well make among ourselves; and
another great Part of which, we had much better be without, especially the
Spiritous Liquors of which vast Quantities are consumed in this Colony every
Year, unnecessarily to the great Destruction of the Estates, Morals, Health and
even the Lives of many of the Inhabitants.
§51 I say so long as these Things are so we shall spend great Part
of our Labour and Substance for that which will not profit us.
§52 Whereas if these Things were reformed, the Provisions and other
Commodities which we might have to export yearly, and which other Governments
are dependant upon us for, would procure us Gold and Silver abundantly
sufficient for a Medium of Trade. And we might be as independent, flourishing
and happy a Colony as any in the British Dominions.
§53 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.
§54 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.
§55 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.
§56 And I doubt not but that if those two great Evils that have
been mentioned were restrained we should soon see better Times.