for in the legislation authorizing the issues. Some of the colonies were conscientious in retiring the bills according to the terms of their issue, but other colonies were not; and most of the colonies indulged more or less in putting out irredeemable or fiat money. In part, also, this fiat currency consisted of small paper bills to provide retail trade with the necessary change, the need for which was very great. What the colonists ought to have done is what could hardly have been expected of them. They should have taxed themselves, purchased bullion, and issued coin or paper notes redeemable in coin or bullion; but capital seemed to them much too scarce to be tied up thus in the vaults of the colonial treasuries.
The desirability of having actual value back of paper notes was realized, and the not unnatural expedient was tried of establishing "land" banks with power to issue notes against mortgages upon land-- the only kind of capital that was really abundant; but it goes without saying that such experiments were foredoomed to failure. Banking, public and private, in colonial times was too crude to create successful institutions of credit, let alone to provide a safe circulating medium-- a much more difficult function to perform. It is, however, not surprising that the colonies resorted to the issue of paper currency when one considers the urgent need of a circulating medium and the practical impossibility of maintaining within the colonies an adequate volume of metallic money.
During the 75 years of the colonial period falling within the eighteenth century, American maritime commerce kept even pace with the economic progress of the several colonies. The deterrent effects of the long wars were relatively slight and of short duration. The laws of the mother country intended to secure to Great Britain the benefits of a monopoly of the international commerce of her American colonies were enforced in so far as their enforcement placed little or no actual check upon the development of America, but remained a practical dead letter as regards those branches of trade that would have been seriously restricted by giving validity to the laws. The commercial growth of the continental American colonies was in the main autonomous. The settlements in America were not economically a part of the English "realm;" they were colonies, and the British Acts of Trade did not change their status.
The industrial welfare of the colonies, in 1775, almost as much as in 1700, was dependent upon maritime commerce. The diversification of production had advanced somewhat further in the middle colonies than in New England or the South; but, even in the region between the Chesapeake and the Hudson, little headway could have been made without the free exportation of surplus commodities to the West Indies and the other continental colonies and the importation of Euro-