[Dr. William Douglass], A Letter to Merchant in London Concerning a Late Combination in the Province of Massachusetts Bay… to Impose or Force a Private-Currency Called Land-Bank Money, 21 February, 1740

[Dr. William Douglass], A Letter to Merchant in London Concerning a Late Combination in the Province of Massachusetts Bay… to Impose or Force a Private-Currency Called Land-Bank Money, 21 February, 1740

  • I wish to address the proposal of creating a “Land-Bank” money/currency.
    • The House & the Governor have come out squarely against this proposal, as it is not only illegal but very unwise for our local economy but for that of Great Britain as a whole.
    • It’s a conspiracy created by necessitous, lazy & extravagant people that appears to be interested in creating a very large economic Bubble in order for its proponents to pay their own debts & live lavishly off the creation of the stock currency.
    • It also is something created to tempt the unthinking public into believing that this proposal will create free public money, as well as money available to private citizens at a very cheap rate.
  • Let’s look at the Directors themselves…
    • 1 – These Directors have their positions in perpetuit
    • 2 – The Directors can veto any proposal in their meetings.
    • 3 – Their salaries allow them to live very high on the hog, giving them 1% of the stock money to live off of.
      • To put this into perspective, those who perpetrated the South Sea Bubble only lived off of 1/12% of the original stock!
      • They have way fewer restrictions on what they can do to influence the stock than the Bank of England.
      • They will use incoming trade to be paid for by the new paper currency to influence the stock, without really understanding how trade works at this level.
    • 4 – They can change the terms of the partnership whenever they want without having to confer with other members, without debate or deliberation.
    • 5 – County officials looking into whether or not government servants are involved in the scheme have come back with reports that the directors gave no initial investors any guarantee of good faith in orchestrating the currency. There is no oversight under the pretext that the directors are “too busy.
      • This whole scheme really puts anybody trading in this currency at risk. The more it is allowed to seep into the overall economy, especially in real estate & big industrial investments, the more damage will be done once the currency goes belly up.
    • The Projectors of the program gave it a very innocent sounding name – Bank. But it’s not banking at all. Banking is issuing cash-notes which are payable on demand, or merchants storing their cash for one merchant to transfer from one bank portfolio to another if needed.
      • 1 – The “Bank” has no stock in its treasury. Any stock available at first was whatever they could con out of pig farmers by promising them ridiculous returns. By the way, the directors have indemnified themselves from such investments.
      • 2 – The bills issued carry no interest. They are only payable on demand after 20 years. Even then, it’s not payable in cash but in goods of some similar value.
      • 3 – Produce & manufacture are worth more than depreciating bills. But all payments in the partnership of interest & principal will be paid in the bills but not in real goods. Nothing other than paper will be in their vaults.
      • 4 – The partnership has no apparent limitation because it is not a corporate entity. The directors can print money at will whenever they want, so long as they want.
      • 5 – Even if the directors are honest men, if the government allows the establishment of such a bank, it can encourage dishonest men to set up rival banks & con the people by using the same rules.
      • 6 – In other countries, honest, diligent men set up as bankers. But here, the criminals & scam artists set up as bankers – banks claiming to circulate £600000 of stock but don’t have a penny.
      • 7 – The securities themselves can be stopped, refused or destroyed at any time for any reason.
    • The Directors have misled the public & have encouraged principles destructive to society & government.
      • 1 – Claiming that Common Consent is the end-all-be-all in society – particularly in currencies. They say anything can be a currency if the people believe it to be one. They’ve also encouraged people not to buy into royal prerogative as far as currencies are concerned.
      • 2 – Claiming that every landed man has a right to make money, even if it means mortgaging every square inch of his property to these criminals. What will happen if everybody does this & the currency collapses?
      • 3 – Claiming that every merchant & frugal man is the bane of a country by insisting that contracts gone into in good faith be honored by debts being paid back. They say that the manufacturers are just exploiting the poor working class to get richer. They also claim that they will help the poor by giving them this “investment opportunity”.
      • 4 – The 2000 principals they’ve drummed up are just a way of faking robustness & giving themselves an air of authenticity. But it’s just a form of saying, “See, 2000 of your fellow citizens can’t be wrong!” Conning 2000 people is one thing but they’re using their initial victory in getting 2000 willing abettors to con the rest of the people & the government.
      • 5 – They’ve even got the press on their side encouraging the people to ignore any warnings or demands from Whitehall or Westminster to stop this scheme immediately, even if just for their own sake.
    • I would like to know what measures the Governor is going to take to put this scheme to an end. It’s clear that the Legislature can’t do a thing. While the Governor has fired administrators helping the Bank establish itself initially as well as giving it credibility, more needs to be done in showing that Westminster’s laws are also to be followed. You give them too much credit
      • 1 – That any investigation done by Parliament & Whitehall would render a positive result. The poor souls who invested in this bank will lose pretty much everything they put into it.
      • 2 – The mortgages that the bank hold will be fodder for lawsuits that will follow upon the inevitable collapse of this bank. Landownership in the colony is going to go through some massive changes.
      • 3 – Those who had invested in the bank have had ample warning to get out while they still can & when the collapse happens, they’ll deserve no sympathy for losing all their money.
    • I hope that the government, who’s responsible for looking out for the people, will behave towards its people the way that parents do towards children who continuously make mistakes.
      • Bubbles & scams result from the director’s evil principles & the public’s error in judgment.

Author: knowit68

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