The Massachusetts Land Bankers of 1740

The Massachusetts Land Bankers of 1740

The Massachusetts Land Bankers of 1740

The Massachusetts Land Bankers of 1740

Excerpt

Who were the backers of the Massachusetts Land Bank of 1740? The most widely held interpretation is that the proponents of the bank were poor debtors, particularly farmers, who embarked upon this paper money experiment as a means of escaping payment on their debts and taxes by creating a cheap currency based on land. The origins of this agrarian-debtor thesis may be traced back to the writings of two men who were violently opposed to the bank at the time of its establishment. William Douglass, Boston physician and pamphleteer on currency matters, described the land bankers as a tribe of insolvent subscribers, though he did not go so far as to attribute the formation of the bank to the farming class. Thomas Hutchinson, Boston merchant and politician who eventually became royal governor, characterized the land bankers as "plebeians" of "small estate" and generally insolvent.

Later historians have tended to accept uncritically the views of these contemporaries. Andrew M. Davis, who has done the most comprehensive work on the bank, concluded that the majority of the bank's subscribers were "poor people" from "small towns." Writing during the Populist era when many Americans looked upon any currency that was not backed by gold as dangerous, Davis reflected the orthodox economic views of his age when he declared that the paper money backed by land issued by the bank was unsound. Herbert L. Osgood and James Truslow Adams writing in the 1920's described the subscribers as men without substance or standing, and both were critical of the bank and its operations.

John C. Miller, writing in the midst of the depression in the 1930's, echoed the point of view prevalent among historians in that era. Miller saw the Land Bank as a symbol of class conflict within the colony between debtor farmers and town artisans on the one hand, and their creditors, the Boston merchants, on the other. He suggested that by basing their paper money on land, the most common form of capital which they held, the debtors hoped to wrest control of the currency away from the commercial creditor class. To counter this threat, says Miller, the merchants formed a rival bank whose money was backed by the kind of capital they could best control, namely silver.

In addition to its appearance in specialized studies and articles, the agrarian-debtor thesis has found its way into many . . .

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