The module is a politics and policy-making case study of the attempt to institutionalize paper money as a currency and as the province’s principal economic development strategy. Introduced in previous modules, this module carries that issue into the 1750’s, and to its for all practical purposes final determination of that issue and strategy. As will be evident, the policy struggle over paper money during the first half-decade of the 1750’s brought Penn’s sole proprietorship policy system, indeed the proprietorship itself, to a crisis that iu a generation directly led to its overthrow in 1776. The crisis came to a head in 1755, and in the preceding years exposed just about every chasm within that policy system–and its inability to develop a policy-making process congruent with its underlying Quaker political culture. This is therefore not just a policy-making crisis, but a cultural one as well. From this point on Pennsylvania would move from a purely Quaker political culture to one diverse in its ethnic foundations, and complex in in its expression of political values in governance.

From a historical evolution of American state and local economic development, this paper money case study is especially interesting. When the time came, and the Articles of Confederation required the institutionalization of its own currency, that story will play out in Pennsylvania, and in concept, that “nation” or confederation’s first currency rested upon a bank that was incorporated and existed under the aegis of Pennsylvania state law. The forces that were unleashed, in part at least, by the realities that emanated from post 1755 Pennsylvania, wreaked havoc on that first attempt at a national currency. When that story is told later in this chapter, the overlap with what the reader will see in this module is remarkable. That the story of currency institutionalization will continue into the 1789 Early Republic, and break apart the Federalist consensus that created that Republic, will involve a gentleman who played a role in the Articles-Pennsylvania “First” National Bank. Alexander Hamilton drew his lessons about currency and approach to economic development, from his experience in the tumultous Articles period, when he was under the tutelage of a certain founding father–Robert Morris. But that story lies ahead. First paper money institutionalization and the breakup of the Penn Proprietary policy system.


1748 was the transition year from the politics of the 1740’s to those of the 1750’s. The War of Spanish Succession and its subsidiary, King George’s War ended formally in 1748. Peace, such as it was, defused much of the policy tensions that had built up in Pennsylvania politics during the Forties. The political turbulence of the early 1740’s Pennsylvania politics (through the 1742 election especially) was due to the fractures in Quaker unity caused by War, and by the opportunistic putsch led by the Proprietary faction leader William Allen. Allen had hoped to seize, if not outright dominance over the General Assembly, at least administer a strong push back to the Assembly’s assault on the Proprietary. Doomed to failure, or not, the putsch resulted in an electoral repudiation of the Proprietary by the Quaker Party. The hold that party through its core Quaker element and the alliances it was able to form, reduced the Proprietary faction o a very rump minority in the Legislature. From then on, the Quaker Party, and its coalition, would safely remain in power through most of the 1760’s.

In the late forties the chronic feuding between the Deputy Governor-allied with the proprietorship, but tactically free to conduct his own relations, initiatives and negotiation with the Legislature, had pretty much exhausted itself. This again exposes the fractured nature of the Penn Proprietary, but previous to 1744 the Penn appointee Governor Thomas was consumed by the Allen-Quaker Party electoral insurgency, during which his salary was withheld by the Legislature. Between navigating unpaid through the Board of Trade demands for war and Quaker resistance,  holding the Legislature back on paper money issuance, and coping with the factions within the Proprietary, Deputy Governor Thomas  was at constant war of all against all. After 1744, the Legislature and Deputy Governor reached an accommodation of sorts, more a cease fire, and both sides entered into a “quiet war”. With Governor Thomas, in increasingly poor health, on his way out to greener pastures, the appointment of a new governor potentially provided an opportunity to regroup and set up a some consensus for the coming years.

The years between 1751 and 1755 are critical to our understanding Pennsylvania’s “drift to independence”. They also are central to our understanding of Franklin’s participation as the fixer-upper, the man on the white horse that would remove the now traditional policy logjam that consumed provincial level politics and policy-making. Perhaps unsurprisingly, we will find that once again in 1751 the Legislature, Governor, and the Proprietorship will engage in yet another tug of war over, unsurprisingly, paper money, and simultaneously over Pennsylvania’s western settlement policy and Indian relations. Still lurking under the “bed” was the potential for war, with the Indians, and increasingly in these years with the French. Once again, war, and this time western settlement and Indian relations overlapped the issuance of paper money. Franklin did involve himself, intermittently if at crucial junctures, with the latter two issues–and in 1754 with the issue of war itself (the Albany Conference). His involvement, however, was not sufficient in overcoming the now commonplace paralysis that enveloped the Pennsylvania policy process.

Pennsylvania had grappled for thirty years with currency institutionalization, but for once in the 1750’s London was no longer a major factor. In the fifties it was very apparent the Pennsylvania policy system could not resolve the differences within its fragmented system, and those differences once again produced paralysis and stasis without significant external intrusion. What’s more, its ability to make policy in regards to western settlement and Indian relations also proved largely unproductive–while the proprietorship was able to engineer, at the expense of the provincial policy system–some degree of victory in the former. As events rolled on in the fifties, more troubling was the obvious reality that Pennsylvania’s western counties and its trans-Appalachian Ohio Valley areas were becoming the ground zero for an intensifying war with the French and Indians–and that Pennsylvania had been marginalized by an aggressive Virginia. Not as apparent then, but obvious in hindsight, is that Pennsylvania in these years was also ground zero for what would prove to be colonial America’s largest immigrations, the size and duration of which fueled the disintegrating Indian relationships and prodded greater French involvement in the Ohio Valley. Events were combining and moving Pennsylvania into a policy avalanche way beyond its ability to deal.

As we describe these events and dynamics, we can also see this period offers several discussion of value to the purposes of our state and local economic development history. Ostensibly, our major purpose in this chapter is to demonstrate that Pennsylvania was different from other colonies from its birth to its end in 1776. That, of course, is central to our initial question as to why states are different in our contemporary America. The stasis of the Fifties, however, will also involve us in our analysis of political culture as a determinant of differences among state-provincial policy systems. As will become evident in the future modules, it is during the fifties that the Quaker political culture will merge and morph into a larger political culture, the Midlands. Paper money institutionalization, Franklin’s brokerage, and western settlement-war will also shed some light in this evolution. That the evident failure of policy-making by 1755 will itself cause a very dramatic turn in proprietary-legislative relationships only twenty years removed from the American Revolution, will materially affect Pennsylvania’s “drift to independence”, and will shape the Pennsylvania actors, the cast of characters, that will play in the last act of Pennsylvania’s colonial system.

the Importance and Value of Paper Money

Bills of credit are only one form of paper money. BUT, bills of credit were the preferred form, used by many colonies. It was certainly Pennsylvania’s. Secondly, bills of credit would be used by the states during the Articles of Confederation–so bills of credit were a critical source of funding for fighting the American Revolution, and sustaining early states during, and after, the War. Nevertheless, state issued of bills of credit were precluded by Article I, Section 10, Clause 1 of the U.S. Constitution. There are reasons why such prohibition was a first priority of the Constitutional Convention. A voting majority of the Constitutional Convention believed states use of bills of credit during the American Revolution depreciated/devalued the national currency. Currency was a national prerogative in their mind. In the 20th Century, Federal Reserve Bank Notes were/are a version of a bill of credit.

Well and good, but the reader might understand that states did not necessarily agree. They had used bills of credit, fought for the right to use them against the British, and bills of credit had served as the colony’s sources of domestic currency. Currency reform included in the Constitution, when implemented several years later in 1791 by Alexander Hamilton proved to be a profound rupture with two hundred years of the colonial/Articles past. Currency legislation was a principal cause of the split in the Federalist Party and the founding of Jefferson’s Democrat-Republican Party. Also, as we review bill of credit in detail, it might be apparent its structure and purposes does apply to modern economic development financing–apart from its use as a paper currency. Paper currency then, as now, serves several functions and finances several financial “tools”, programs, and economic development strategies. The centrality of paper currency in our ED history is so fundamental we regard paper currency an “institution”, a financial institution which is fundamental to the structure of the economy and economic base, and therefore a foundation or prerequisite to economic development financing. Say it another way, as uninteresting as this might be to some, the topic is central to our history.

Each colony handled currency in its own manner. Massachusetts (see the next chapter) rocked the boat by asserting its right to issue coins–hard currency (not paper) in theory–but without sufficient reserves backing or redeeming it, this “hard currency” was really a form of paper money. Bills of Credit, likewise, were not identical across colonies or even over time within one colony. The core or basic structure required legislative approval of a specific issuance amount of paper currency, converted or packed into debt obligations which were then sold to investors.  The proceeds of the debt sale constituted the monies available for the purposes to which bill of credit had been issued. Since bills of credit were controversial, and not backed by any cash or hard currency reserves, they were thought of as temporary, and a time period of their use was usually specified.

At the end of the time period, the specific “notes of issuances”, debt obligation, and any loans if made, were required to be paid off, or redeemed, and the proceeds returned to the original issuance to redeem any debt obligations that raised the funds for the bill of credit. Future legislation could extend the time period, or “roll over” the whole kit and caboodle into a new issue. This was, in fact, what Pennsylvania had done with its initial 1720’s issuances, and in 1751 was what it was expected would happen to any new issuance. The problem that appeared post 1751 was that this cumbersome and complex process involved with issuance of paper money benefited some, and came at the expense of others–and Penn felt, rightly I judge, that it put his Proprietary at a disadvantage.

In Pennsylvania, the proceeds from several previous bills of credit had been sent to the Legislature’s Loan Office (not the Proprietary Loan Office discussed in earlier modules). The Legislature’s Loan Office made these monies available to itself (to pay off its own bills and legislative initiatives) and to counties for public lending–usually for loans/mortgages for agriculture, business startups, or business investment. Loan to the general public meant the colony-level government had become a public lender (a functional bank of sorts), and the Legislature and its Loan Office was using government funds for private loans and investment. Since there were no real “banks” as we know them today in colonial America at this time, in effect the bill of credit was not only a currency, but also a government loan program whose primary target or goal was to make loans for economic development-related purposes. To make it more complex, of course, any bill of credit could be used to directly pay off expenditure obligations, and also could print “notes” that served as currency for the general public. The reader should understand bills of credit served several functions, which allowed/required considerable variation. Obliquely, we can see we are explicitly dealing with our initial question–“why are states different”.

In Pennsylvania, the Legislature had in practiced used the proceeds from paper money issuance to further its own ends–and establish its financial and fiscal independence from the Proprietary:

(W)henever, the House emitted paper money in peacetime, it did not put it into circulation directly, but rather loaned it to the inhabitants in small sums at interest on landed security. As a result the Assembly became the largest creditor in the province and received  interest payments which averaged 3000 pounds annually. This money it spent as it pleased accounting for its disposition to no one, least of all the Governor [Proprietary]. The second way in which the Assembly made money from money bills was by ‘rigging’ excise rates [sales tax on specific transactions, commonly liquor]. The [proceeds of the excise] would be paid into the Treasury so that the [principle] of the [paper money debt issue] would be destroyed, so that at the end of ten years the entire sum would be eliminated… Consequently, during an average year, the Assembly received unrestricted revenues of between 5,500 and 6,000 pounds [a notable sum of money to spend on matters independent of the Proprietary] [99] James M. Hutson, “Benjamin Franklin and Pennsylvania Politics, 1751-1755: A Reappraisal” (the Pennsylvania Magazine of History and Biography, Vol 93, Issue 3, (July, 1969), p. 322.

In practice that meant legislature approved end-users, legislatives purposes would be achieved, and very importantly, any interest payments received on the loans went to the legislature–a sum of some attraction to Penn. Worse, the closeness of Assembly political leaders to its Loan Office became apparent in 1750 when the all-powerful, long standing Speaker of the Assembly (and Chief Justice), John Kinsey, died. The handling of his estate revealed his use of a sizeable Loan Office misappropriation for Kinsey’s personal use. Also, the Legislature had denied the Proprietary any say on nominations or lending decisions since the inception of the Loan Office in 1723. The Proprietary had been “straight-armed” and the loans were beyond the control of the supposedly legal proprietor of the colony.

Since his very powerful economic development tool was in the hands and control of the Legislature, we can now see why Thomas Penn was reluctant to allow the Legislature free rein in the use of “paper money”. Supporting our contentions, the crucial ED “lending” strategy, the central ED institution of currency/finance/fiscal policy (flip sides of the paper money initiative) became immediate victims of the partisanization and bureaucratic fragmentation of the Penn Proprietary policy system–buffeted between two competing networks of political/institutional competition.

While there are other issues associated with the bill of credit (many of which we discussed in an earlier module), the “structure” of the bill of credit was the outstanding issue of contention between Penn and the Legislature in the 1750’s. “Believing that the Assembly’s financial strength [created by is management of paper money] had enabled it to ‘usurp’ the proprietary prerogatives …. Were he be able to regulate its revenues, he was confident he could restore the Pennsylvania executive [branch] to its proper eminence and create a balanced government[99] James M. Hutson, “Benjamin Franklin and Pennsylvania Politics, 1751-1755: A Reappraisal“, p. 322. 



Franklin Steps into Pennsylvania Policy-making

In 1748, Franklin had reached his agreement with his Editor Peter Clark, and handed his business over to the latter’s management. Franklin, of course, was still the owner, and received sufficient income to maintain himself for the remainder of his almost forty-five year lifespan. Much is made in Franklin’s various biographies of the asserted reason for Franklin’s retirement as allowing him the time and opportunity to conduct his much wanted scientific research and philanthropic/philosophical endeavors–the last of which will be considered shortly. True enough, Franklin did fly his kite on June 10, 1752 with his son William in tow. He had actually started research and experimentation on electricity earlier in 1746, and in 1749 he intensified his efforts. For example in that year he killed several turkeys with electric shock, proclaiming the method of death produced more tender turkeys for eating. His other experiments were published widely; his findings conveyed global celebrity status. Most of his study of electrification was done by 1753, and published by 1755-6.

Despite the many items on his private agenda, Franklin put his toe in the political water in 1748.selected as councilman and then justice of the peace for the Philadelphia Municipal Corporation. In 1751, however, he jumped into the pool, getting himself elected to the Pennsylvania General Assembly, independent of, but in caucus with the Quaker Party. The paper money issue, an issue with which Franklin had both a twenty-five year history, and a major conceptual publication on the merits of paper money in a colonial economy, was seemingly right down Franklin’s alley- a natural issue to draw out his leadership potential. Paper money dominated the legislature’s politics and policy for the next four years, and while Franklin did involve himself, the intensity of his commitment, and the role he played (broker rather than advocate) epitomized his early style as a member of the General Assembly.

Paper Money as Proxy for Pacifism–The 1740’s wars engendered triggered Quaker pacifism and during that decade the paper money issue became encumbered with the proposed linkage of paper money with military expenses and the combination of the two produced a chronic policy paralysis. The fiscal and military war pressure resembled a three wing circus with distinct entanglements within the Quaker Party, the Penn proprietorship, and the British Board of Trade/Privy Council. Religious Quakers responded with their traditional “hell-no”, and secular Quakers who dominated Quaker Party leadership were reluctant to contradict them.

This proved to be a considerable thorn in the Quaker Party agenda in so much as paper money was a major item on their public agenda–and as always an issue very popular with the general electorate. During the forties, colonial paper money was decidedly unpopular in London, and the Board of Trade among other bodies actively resisted paper money issuance. The Penn proprietorship, never an enthusiastic supporter of paper money, found it necessary to promise the Board of Trade that it would oppose, at least restrain the Legislature in its various paper money initiatives. As the war lasted considerably longer than first thought, the London position softened as war needs and payment for war expenditures became paramount concerns–and paper money was a reasonable method. As we know in the mid-forties the Legislature did approve a relatively small issuance for war related uses, but then refused to do so when threatened with a potential Philadelphia raid/attack. That reluctances, as we now know, triggered Franklin’s activism on the issue of a militia, and his creation of the Association (1746-7). By the end of the war, the issue was put on hold, as it appeared a new London paper policy regulation was forthcoming.


In 1748, with the war at an end, and a new Deputy Governor (James Hamilton) was appointed by Penn (1748). Hamilton, 38 years of age, was a native Pennsylvanian, a Scotsman, Episcopalian, whose father had been a political powerhouse in past decades. James Hamilton had himself extensive political experience with service in Philadelphia and the General Assembly–as well as Penn Proprietary cabinet-like Governor’s Council. To help matters along, he was a friend and associate of Franklin. Known to all as a fair and temperate man, he was no hardliner but loyal to the proprietorship. His appointment by Thomas Penn suggested a willingness to cooperate in governance and a potential era in good feelings. The lull in the paper money issue, which had hopelessly divided an already tumultuous politics, also provided an opportunity for a honeymoon period between the factions and contenders–an Era of Good Feelings (that lasted about two years}. This is the period that Franklin began his step by step entry into active political life.

The events of the war with Spain and France, it has been shown, did not in the least shake the people’s faith in the Quaker Party, despite the fact that the great majority of the inhabitants no longer were either Quakers or pacifists. Quaker government in the eyes of the people were synonymous with good government, freedom and low taxes. When in the later stages of the war fear arose for the safety of the province, the people saved the Quaker Assembly embarrassment by adoption of Franklin’s extra-legal [more precisely private militia, funded by popular lotteries] military association. The war ended, the popularity of the Quaker Party reached new heights by its spirited crusade for more paper money [99] Theodore Thayer, Pennsylvania Politics and the Growth of Democracy, 1740-1776 (Pennsylvania Historical and Museum Commission, 1953), pp. 23-4.

The paper money lull was not a lull at all. It was expected the Board of Trade was going to ban the use of paper money imminently, and Governor Hamilton dissuaded the Legislature from passing its annual bill appropriating a large issuance by pointedly observing to legislative leaders that passage would like prod the Board of Trade to issue the edict immediately, and blame Pennsylvania for its action–not endearing Pennsylvania to the other colonies. So the lull lasted int 1751. In that year the Board of Trade issued its ruling on colonial paper currency. It levied the boom on Massachusetts and New England, and did not mention Pennsylvania or any mid-Atlantic or southern colonies. It had reached its determination by concluding that colonial paper currency was both inevitable and not a significant worry so long as amount f issuance was restrained. New England (Massachusetts) was viewed as immoderate and the only region which needed direct regulation.

What is incredible is that by 1751 all parties had reached a consensus that colonial paper money could be issued. In spite of that Pennsylvania could not approve and successfully implement any legislation on the matter for over four years. The system was incapable of parlaying the limited consensus into an actual public policy. What is doubly amazing is the incredible economic and population growth that the province enjoyed and which overlapped its governmental and policy paralysis. Go Figure. Somewhere in modules ahead we will have to deal with that.

Franklin Confronts Paper Money Issue as a Legislator?

Franklin entered politics not like Napoleon with his artillery and military unit; he entered in as the behind-the-scene leader of a militia movement and quickly pivoted into Quaker Party-Philadelphia Municipal Corporation elite-based politics. His pivot into politics, however, was not complete, nor did he afford it exclusive priority over other activities. To the contrary, his greatest scientific exploits occurred in the period after this and 1756, and during this period he also engaged in several significant civic projects. (Which we will discuss in a separate module). Franklin, although working within the Quaker Party electoral and legislative networks, maintained a degree of autonomy from each.

The struggle commenced with the Board of Trade’s  June 1751 North America colonial “Currency Act”. The statute forbade the unregulated issuance of paper money as currency, but by its terms ONLY in NEW ENGLAND. Expectedly, Pennsylvania and other colonies took the Board of Trade at is published word and immediately in its first session after the act (February, 1752) approved the issuance of 40,000 pounds–promptly vetoed by new Proprietary Deputy Governor James Hamilton. Franklin. Hamilton would summarily reject every subsequent legislative bill to issue paper money currency for the next eighteen months (to the onset of the French and Indian War). Why? Initially, Hamilton claimed the Currency Act applied to Pennsylvania, but abandoned that position claiming instead that Pennsylvania did not need paper money, and that Pennsylvania’s issuance would prod the Board of Trade to include Pennsylvania under the terms of the 1751 Currency Act. The Legislature did not take either of these rationales at face value, and instead believed Hamilton was acting on behalf of Thomas Penn and their Proprietary. Franklin, to remind the readers, had a more than twenty year history of advocacy and being a beneficiary of paper money as currency.

The underlying reality was a bit more complex. Penn did not forbid the Deputy Governor to deny the issuance of paper money, but he did insist the issuance of a “reasonable” sum managed by and directed by Proprietary officials unlike past paper money issuance which were legislatively implemented. This was a backhand way to reduce the power of the Legislature, and to preserve the Proprietary balance of power with that body. To understand the real battle going on, and, I might add to understand the structure of Pennsylvania’s use of paper money, we need to decipher the intricacies of the form of paper money issued: the bill of credit. Penn’s position, from his perspective, did have merit–and the legislature’s past use of paper money was not without its faults. Having said this, an unintended problem of major consequences developed from Hamilton’s early legislative rejection of the Legislature’s Feb 25 1752 initial legislation. Hamilton in vetoing the bill, fearful that Thomas Penn, 3000 miles away, was not aware of the fire bomb the rejection of the paper money legislation was in Pennsylvania.

The multi-year deferral and failure to resume issuance of paper money currency had caused an enormous public, as well as legislative, build up of expectations. Seeking to buy time, and protect the Proprietor from the public/legislative firestorm resulting from his expressed conditional negotiation package , Hamilton was less than truthful in explaining his veto to the Legislature or public. In addition to his less than plausible veto rationales, Hamilton failed to disclose specifics of his instructions from Penn; in that vacuum emotional and fanciful instructions were conjured by the various actors. Hamilton began a letter-writing dialogue with Penn that lasted through March 1753–almost a year. In frustration at that point after a year’s worth of domestic politics and Penn stubbornness, Hamilton notified Penn of his resignation as Deputy Governor effective in the next year. Upon receipt of that last letter Penn finally backed off his stipulations–but the damage of a year’s obstruction had been done. The May 25 1753 new legislative enactment had already been vetoed by Hamilton previous to Penn’s new instructions. Hamilton, however, was “free” to do what he could to close the gap when the Legislature reconvened in August (1753); at that point negotiation became possible.

Franklin’s Role

Franklin, however,in this period did not pursue an anti-Penn crusade, instead espousing a moderate and behind-the-scenes broker/intermediary approach, engaging in dialogue and cooperation with the Proprietary on a number of key issues. Nevertheless, Franklin’s private political platform was not congruent with the Proprietary, and, on the main was congruent with the Quaker Party–leaving aside its pacifism, of course. As the years went by, Franklin moved steadily to firmly to replace the Proprietary with a Crown appointed of a royal governor. Franklin’s irreparable 1755 break with the Penn Proprietary gradually escalated through the nearly four year stasis that commenced with the paper money bill in 1752. Because Penn’s position on resetting the balance of power between the Proprietary and Legislature was not known to Franklin until 1754-5, neither party, nor the Deputy Governors were aware or sensitive to Franklin’s Whig position on the power of legislatures as the representative and spokesman for the citizens of a polity [999].


[999] Hutson acknowledges the possibility, perhaps likelihood, that Franklin was aware, to some degree, early on what Penn was trying to do. Franklin’s intermediate broker role in both his civic agenda and his legislative position. Hutson suggests that Franklin, to preserve consensus on his civil agenda was actively, if behind-the-scenes advocating suppression of Penn’s instructions to Hamilton–and therefore hiding the larger fundamental conflict over the role and power of the Legislature versus the sole Proprietary,  James M. Hutson, “Benjamin Franklin and Pennsylvania Politics, 1751-1755: A Reappraisal” (the Pennsylvania Magazine of History and Biography, Vol 93, Issue 3, (July, 1969), p. 326.


To Franklin the Legislature was the vehicle by which the Hobbesian “social contract” was determined and managed. Penn’s curtailment of legislative action and its “inherent right” to speak on behalf of the general citizenry was a first order priority. Penn, thinking only of reestablishing a new balance between his executive branch and the legislature, was from Franklin’s perspective attacking a fundamental right of the Pennsylvania legislature. When Franklin became aware of Hamilton’s subterfuge later in the paper money process, he became aware of this fundamental chasm and from that point on, Franklin became increasingly bitter and oppositional to institutional right of the Penn Proprietary to “own” the Pennsylvania colony. That a goodly number of the Quaker Party had already arrived at that Whig position previous to the 1750’s paper money conflict, Franklin’s newfound Proprietary opposition would be welcomed by substantial number of the legislative delegates–in other words, when Franklin became intensely involved on the core relationship of Proprietary to the Legislature, displacing the primacy of paper money, it also meant Franklin skyrocketed in terms of his influence and popularity within the Legislature. His ready-made audience was eager to make Franklin their leader in what became an entirely new battlefront that arose after the paper money negotiation was resolved.

the Specifics of the 1750’s Bills of Credit Legislation

The original bill authorizing 40,000 pound paper money issuance was introduced in the Legislature and passed by February 25, 1752. Deputy Governor Hamilton in accordance with is own inclinations and Thomas Penn’s conditions expressed to the Deputy Governor previous to his appointment, vetoed the bill on March 6th. What followed for the next year and half was a torturous exchange of rationales, terms/conditions, and past history brought up as baggage to complicate negotiations. It was always one step forward, two backward. As the “good times” rolled on without resolution of this issue, the firmness and inflexibility of each party increased. Negative reaction to Penn’s perceived intransigence by popular opinion, however, played a decisive role in finally compelling Thomas Penn to agree to a paper money compromise without strictures on the legislature continued control over implementation (summer 1753).

That break in the logjam allowed authorizing legislation to be sent by the Legislature to the now lame-duck Deputy Governor Hamilton. With resolution of the paper money legislation seemingly in hand, the Legislature was surprised when Hamilton added on several clauses, small print at the bottom, that Hamilton considered “boilerplate” necessary to bring the legislation into compliance with Parliament’s 1751 (and 1740) paper money requirements. One clause was a “suspending clause” that made final authorization dependent on a concurring finding by the appropriate authorities in London. To the Legislature (and Franklin) this was a shot out of the blue–and a direct attack on the rights of the Pennsylvania legislature, rights in line with the Whig perception of the Legislature outlined above. If Hamilton had intended no such attack, it mattered little because the Legislature was now riding a different horse than the paper money horse.

No longer taking Hamilton at his word, delegates arrived at their own interpretations of what Hamilton’s “real” agenda was. Many once again assumed Penn’s instructions to Hamilton had caused the insertion (they hadn’t). In any event, their wrath fell on Hamilton personally, and by September 1753 the Legislature responded with messages and correspondence that only widened the gap between Hamilton and the Legislature–and in the series of blunt exchanges that followed one horror story and misapprehension after another. If paper money as the chief issue had been superceded by the rights of the Legislature versus the Proprietary, than simple acrimony and a host of fire fights around specific correspondence dominated the negotiations. Then the Legislature adjourned–and the behind the scenes sniping continued over Christmas and into 1754. That delay in resolving this paper money issue proved critical.

During that period the situation in Pennsylvania’s western counties changed hugely–and not to the better. This was the period that Washington and his two expeditions launched the world into what would become the French and Indian War. On February 14, 1754, Hamilton sent a message to the Legislature informing them of Washington’s exploits, and that Louis XV’s soldiers had invaded creating an “extraordinary emergency” that allowed him to suspend the “suspending clause” so to permit issuance of paper money to support the war. Sounds good, doesn’t it? But as we well know, paper money, war and Quaker pacifism is not a helpful concocktion. So helpful was it that the Legislature did not even respond to his February message until May. It responded only because Hamilton had sent yet another message indicating the French had captured Pittsburgh (Washington’s Fort Necessity), and had taken possession of the fort–deep into Pennsylvania’s claimed western territory.

To the last message, the Legislature took action approving a defense/war purposes paper money issuance (10,000 pounds) which played the traditional game of raising a tax on liquor in excess of paying off the paper money loan, and diverting the excess receipts into the legislature’s coffers. The Legislature was back to its old game and had taken advantage of the war to enrich itself at Penn’s and Hamilton’s expense. To make matters worse, in the heat to the dispute the previous November, Penn had rescinded his relaxation of his earlier instructions, and reinstituted orders to Hamilton to indeed restructure the relationship between Legislature and Executive branch in the issuance of paper money. True to form, Hamilton once again hid that new instruction so that  for all anyone else knew, the game had not reverted back to 1752. But in actual fact, the original fight of 1752 was back on in the summer and fall of 1754.

Hamilton once again inserted clauses into the 10,000 note issuance, a clause that limited the tax duration, and hence the ability of the Legislature to profit from it. Not recognizing what was afoot, the Legislature saw this clause as nothing more than the old “suspending clause” of the preceding May 1753. It seems at this point everybody was fighting its own different war–while a real war and invasion was in process. The Legislature, believing that Hamilton had in fact occurred (which it had) gave up in frustration and adjourned in late May 1754, in the midst of said war. By early summer, Hamilton was no longer officially governor although he sort stayed on in an unofficial capacity until the new governor would be appointed and on the scene. Now there was no official Deputy Governor to sign legislation. In May 1754 Franklin sent a letter to a Penn associate, a secular Quaker, trying to flush out whether or not Penn was back to his old agenda. Franklin was suffiently abstract so that he did not put Penn or anybody in a corner, and allowing Penn in this emergency to back away “with honor”. It went for naught. In his last act, Hamilton met with the Legislature in August 1754 and the Legislature approved a new issuance legislation for 15,000 pounds with a tax duration of ten years; Hamilton countered with six, but the Assembly refused the compromise, and again adjourned in late August 1754. By that time the identity of the new Deputy Governor was known, and Hamilton left.

“Robert Hunter Morris [the new Deputy Governor] arrived in Philadelphia on Oct 3, 1754 and “was about as welcome in the capital as the infectious distempers which German redemptioners brought into port each summer”. Morris, a Chief Justice of New Jersey, was known to Pennsylvanians. They thought of him as “a two-bit Thomas Penn”, a New Jersey Proprietor who would carry Penn’s water in Pennsylvania. His perceived reputation was further enhanced when the Legislature’s London lobbyist sent them his version of Penn’s instructions to the new governor, a version which did confirm that Penn was back to his old 1752 restructuring position. The new governor refused to confirm these instructions, as had Hamilton, and by late 1754 the chasm between Legislature and Proprietary reached its nadir. By now many of Penn’s proprietor allies in Pennsylvania were exceedingly concerned that revealing officially Penn’s position would, in the unsettled times of its western frontier under attack and invasion, invite a popular insurrection against the Proprietary.

Their perception was that the Proprietary and its allies faced an existential threat for its very existence at this juncture.They came up with their own plan–which Governor Morris rejected-which would have transferred the legislation to London. In the meantime Morris met for the first time with the Legislature in early December 1754, informing the latter that Virginia’s Governor Dinwiddie had approved a 20,000 pound Virginia issuance to support the defense of its claims to the region around Pittsburgh–so the Legislature approved its own 20,000 pound issuance, to mount an expedition against the French. The terms of the issuance, however, continued the olde legislative game of creating excess receipts would rebounded to the Legislature at the expense of the Proprietary. Morris to delay action until he could communicate with Penn, once again inserted Hamilton’s old “suspending clause”. It was deja vu all over again. Morris tried to indicate some compromise was possible on the “term” of the tax, but the Legislature would have none of it. The impasse that followed lasted through the spring and into June 1755. But once again, the issue of war and paper money had both been reduced to secondary considerations, with the more impactful motivator being the rights of the Legislature versus the Proprietorship.

So in January, 1755 the Legislature conducted a series of initiatives, messages, letters to the King which step by step became a direct attack on Penn, the sole Proprietorship, the Deputy Governor. The letter sent directly to the King, a petition, demanded a relief from the oppressiveness of the Proprietorship, and alleging a violation of Penn’s original charter. With this the Legislature adjourned (January) and stayed in adjournment until May. Let the reader be clear about what had just happened: the Legislature had broken off its relationship with the Proprietary, and had petitioned the King for its de facto removal. Where was Franklin on all this? Somewhere else–literally. As Postmaster General he was engaged in a tour of North America, and since March he was in New England several hundred miles away. He did not return to Philadelphia until March.

It may be his absence helped the cause. He was not a part of the Legislature’s action, and he had played no role in the nasty series of messages to Morris over that period of time. But, once again, an old familiar situation had reappeared–and Franklin was able to play a variation on his 1746 militia defense of Philadelphia from invasion. In response to the loss of Fort Pitt, Britain had sent to Philadelphia a British army under General Braddock, with instructions to reconquer Fort Pitt. In the spring of 1755, Braddock’s force was assembling, supplemented by colonists (Washington commanded the Virginia militia), the army was attempting to change its base of supply further west, and to begin construction of a road to Pittsburgh. Morris in March 1755 sent a new message to the adjourned Legislature: legislation to issue 40,000 pounds of paper money to help pay for Braddock’s mission, the road, and the soldiers. He also included terms which limited the Legislature’s old paper money prerogatives. Into this tar pit, ventured the newly-returned Franklin, hopeful, if not determined to negotiate, broker, moderate a compromise that would approve a bill so Braddock could continue with his mission, and Pennsylvania could defend itself. Franklin had once again arrived on his white horse in the nick of time–or had he?



The now lame-duck Deputy Governor Hamilton blocked it, adding several clauses, one of which required the signed agreement of the Board of Trade. There was no consensus the Deputy Governor could add clauses. His action was taken as a suspension of “liberty” which denied traditional Assembly practice and rights. Hamilton incurred the full wrath of popular opinion and the fury of the Legislature. Accordingly, the struggle between the two parties continued into 1754 (when the War commenced). The start of war finally forced Hamilton to reverse his opinion, and approve paper money legislation. The War, however, had once again reactivated Quaker legislative pacifism, causing it to back away from its previous issuance legislation–because of perceived fear by Quakers that the proceeds would be used in whole or in part fighting the war. Only when Pittsburgh (Fort Necessity] was captured by the French in May 1754, did the Legislature authorize a note for only 10,000 pounds–and a rigging of an excise tax on liquor which would pay it off in ten years, while also yielding a surplus for unrestricted use by the Legislature. The earlier authorizing bill was, in effect, left on the table as no agreement was yet reached on the implementing legislation that was required to make it operative.

So, Thomas Penn had reversed his position on unrestricted paper money–putting his Deputy Governor Hamilton in a doubly awkward situation. To deal with the situation, Hamilton put yet another stipulation on the new 10,000 pound legislation that required the debt issue to be paid off in five years [not the ten authorized by the legislature]. With frustration and hopelessness on all sides, Hamilton resigned as Deputy Governor in August 1754. The new Penn-appointed Deputy Governor, Robert Morris [not the Morris of the American Revolution]-whose background and past action in New Jersey stiffened the back of the Legislature against Penn, arrived on the scene in late 1754. Penn in the meantime had taken the preventive step of having his position legitimized by the Board of Trade, thus further frustrating the Legislature (Thomas Penn lived in England during this period).

In December 1754, Deputy Governor Morris submitted his own bill for 20,000 pounds paper money issue to be used in support of the war. In the ensuing chaos that was called negotiation (a chaos in which all manner of terms and conditions were introduced and deleted) caused Deputy Governor Morris to declare publicly on December 30th 1754 that agreement between the parties was not possible. Formal negotiations ceased, but over the next six months (during which Braddock’s army was nearly massacred) the Legislature sought to keep the bill alive in some form, including a direct missive attacking-blaming the King for Crown’s role in this five year cattle stampede-style policy-making. As 1755 wore on, in would step the man on the white horse once again: Benjamin Franklin had a plan.

Franklin was in the Legislature and remained so after he was appointed Deputy Postmaster for North America in August 1753. Franklin had been Philadelphia’s postmaster since 1737. In his new position Franklin was responsible for postal affairs of Philadelphia and north, including Nova Scotia. Interestingly. While Franklin did not resign his position as delegate to the Legislature, his travels during this period until he left for London in 1756 were frequent, and his absence prevented him from playing a day-to-day role in the paper money affair. It is widely acknowledged that Franklin during his first four years as a Pennsylvania legislator did not go out of his way to confront Thomas Penn, William Allen or the Proprietary–despite his own personal and Whig political dispositions. This was still well in the period Franklin was devoting considerable time to scientific experiments, and in the course of promoting his civic duty in founding a hospital and a university–both seriously involving Penn, Allen and conservative Quakers.

During the paper money struggle with Penn and the Deputy Governor Hamilton, Franklin wrote that “the extraordinary powers which the Pennsylvania Assembly had acquired were perfectly legitimate”. Penn’s insistence to resist the Assembly’s absolute control over the [proceeds] of the money bills was  in Franklin’s opinion ‘exercising a Natural Right, inherent in every Body of Men, antecedent to all Laws,‘ the right to ‘dispose of their Money by themselves or their Representatives‘. During this cantankerous period of negotiation, Franklin’s vote for the position of the Quaker Party was never likely in contention, but there is some evidence that he worked with both sides to avoid a complete rupture between the parties, and in the process to keep everyone onboard with his civic initiatives. He is likely to have worked with Hamilton in this buffering of the conflict. His new job of North American Postmaster no doubt removed him from much of the back-and-forth that followed in 1754-5. He did involve himself after the Assembly adjournment in the summer of 1754. In a letter he expressed concern with the perceived “instructions” that Thomas Penn had laid upon Deputy Governor Hamilton–it appears this perception mischaracterized Penn’s actual “instructions”, but the letter also, in Franklin’s usual fashion, did not attack Penn directly so to corner him in opposition. He did assert the right of the people, expressed through their elected legislature “to spend their own money as the pleased“. In this letter, sent second-handedly, he urged Thomas Penn to find a way to reach agreement with the Legislature [99] James M. Hutson, “Benjamin Franklin and Pennsylvania Politics, 1751-1755: A Reappraisal“, pp. 334-5.

The complete breakdown of negotiations that followed the December 1754-January 1755 spasm did not bring Franklin into the fray–he was hundreds of miles away in the midst of a six month tour of his postmaster positions, and did not return to Philadelphia until March 1755.  In the immediate period previous, Virginia Royal Governor Dinwiddie had authorized the (Virginia) Ohio Company to settle Pittsburgh, asking for Pennsylvania assistance–which was not responded to. Washington’s two expeditions to Fort Necessity Pittsburgh area had prompted the disaster that caused Braddock to be sent over and his formation of an Army in western Pennsylvania. This absence in what was a very disruptive period in which the parties, including the Deputy Governor and Penn, as well as the outraged Legislature all were at bitter ends, may have helped Franklin in the events that followed. He may have been in what Huston believes was “a singular position, which he, ever alert to the possibilities of public service, perceived he could use to promote the province’s welfare. What Pennsylvania needed, as he saw it, was a broker or a mediator, who could make the Governor and the Assembly cooperate …[99] James M. Hutson, “Benjamin Franklin and Pennsylvania Politics, 1751-1755: A Reappraisal“, pp. 344-5.

His involvement began with his return in March 1755. Amazingly, he did not address the underlying causes of the Legislature-Proprietary paper money struggle, but rather focused on the specific issue of paper money that would be used to support the war resistance effort against the French and Indians. Braddock’s debacle and opened Pennsylvania’s entire western periphery to Indian, and even French attack. Specifically, he seized upon the Legislative special session called by Morris in late March.  Morris asked for a 40,000 pound issuance to fund the army, cutting a road to the Ohio River, and establish a postal service to Winchester VA. Franklin urged that the Legislature in this moment of dire need accept Morris’s term of five years for the tax/sinking fund.  he did thins knowing full well that an issuance tied to war needs would fire up religious Quakers. Initial votes by the Legislature suggested a willingness toward moderation, but in the following days Morris entered into a series of useless and antagonizing minor disagreements with the Legislature that broke any spirit the Legislature had regarding compromise. After over a week of feckless fussing it passed a 25,000 pound issuance with its traditional term/sinking fund package–back to where it was in November/December. Morris predictably rejected it on April 1, 1755.

Within a few hours after the Morris rejection, Josiah Quincy and Governor Shirley from Massachusetts arrived in Philadelphia to beseech its government for a 10,oo pound issuance to partially fund its proposed expedition into Canada (Crown Point). Franklin seized upon their proposal and was able to convince the Legislature to approve a 15,000 pound  financial package from the Legislature’s Loan Office to finance the Massachusetts request and to pay back a previous loan to fund Braddock’s army. The Legislature also included funds to begin the Winchester VA postal route. The financial package which did not require Governor Morris’s support set off a chain of events that caused Franklin to personally become involved with the army and the war .

Franklin traveled to the west, met with Braddock whose need to secure the support of western German farmers for both sustenance and logistical support for his army. Franklin personally and using some of his own funds was able to bring the Germans on board, making Braddock’s launch of the expedition possible. During his time out west, Franklin also came to hear from a number of sources, including Braddock and his staff, that Morris had sent them a number of communique’s that painted the Legislature, but especially Quakers as so opposed to his Army and the War that they were almost allies of the French. That Morris had engaged in this distortion, at a critical time with the British army amazed Franklin, and he was at loss to explain why the Deputy Governor was acting in this manner.

Shortly after Franklin returned to Philadelphia a broadside pamphlet circulated from London, A Brief State of the Province of Pennsylvania” became available in Pennsylvania. The pamphlet in substance demanded Parliament punish the obstructionist Quakers, require them in contravention of their religion to take an oath of loyalty, and weaken substantially their strength in the Legislature. It was in essence a “putsch” similar to William Allen’s 1740 two year attempt to batter the Quaker Party and strengthen the Proprietary. To rub salt in Franklin’s wound, Morris also in a legislative message further obscured the Legislature’s financing of the Shirley expedition, and depreciated, almost totally ignored, Franklin’s personal initiative in organizing logistical support for Braddock’s expedition.

The reaction was that this was directly or indirectly the action of the Deputy Governor, and from that assumption it was evident that what Morris’s strategy was to isolate the Quakers, undermine the Quaker Party coherence, and that threat would likely cause the Quakers and the Quaker Party to refuse any legislation on behalf of the war. In doing this, the larger non-Quaker audiences, especially in London, would see the Quakers as near, if not actual, wartime traitors. That would certainly undermine the Legislature’s request to Parliament to replace the Proprietorship, and could even spawn more negative actions from London.

This duplicity on Morris’s part was “the straw that broke Franklin’s willingness” to play the moderator, and to cross the line for Franklin to join the Legislature in demanding the ouster of the Deputy Governor and the Penn Sole Proprietorship. If this scenario is accurate (and I believe it to be the best I have found), it was Morris and his putsch that thrust Franklin into his decade long effort to oust the Proprietorship, and which set him on his own personal path to independence and eventual American Revolution. The leadership of Franklin in the London-based effort–and as 1755 Speaker of the Assembly, to replace the Proprietorship with a royal governor committed the Legislature to a decade long effort that ran counter to the effort of the other American colonies to compel Britain to recognized colonial legislative autonomy, and which when frustrated led them into revolution. In any case, Hutson makes a strong case that Franklin’s irretrievable break with Morris and the Proprietorship occurred over the summer of 1755 (Hutson, pp. 353-5). During this time, Morris’s secret instructions became known, and it became clear that London had not supported the Deputy Governor in his quest for a limited term sinking fund tax. These disclosures, certainly as perceived by those with Whig inclinations toward legislative supremacy, left no middle ground than a fight to the death with the Penn Proprietorship.–during two summer legislative sessions Franklin made reference to fighting “an eternal war” against Penn.

Over the course of that historic summer, Braddock’s army was destroyed, and the entire western Pennsylvania frontier, not simply the Ohio Valley area, became instantly exposed to direct Indian and French attack. Pennsylvania’s western hinterland was little more than a series of small, very young settlements, quite isolated without any hope of timely assistance. These communities were easily able to be overwhelmed by Indians who were free to concentrate their forces at will. Reflecting this vulnerability the Legislature in July capitulated to Morris’s demands for an issuance, passed a 50,000 pound issance on August 2, but linked its funding to a general land tax repayment. That tax included Proprietor-owned lands, which apparently the Legislature thought would be supported by Penn in such a horrific catastrophe. In their mind it was Penn who was threatened most by the collapse of the frontier, and it, in their minds, was reasonable to expect he would be willing to pay his fair share in its defense. It was not, at least in Morris’s opinion, and he vetoed the issuance on August 5th.

Since the land tax was a new method of payment, Penn’s instructions to Morris never mentioned his position on the matter. Morris, however, read the instructions literally and they did not convey Penn’s willingness to pay such a tax, and so Morris based his veto on this. To compound the matter, Morris proposed a land grant bounty to militia volunteers who marched to the defense of the West–a proposal that exceeded by multiples anything a land tax would have cost. The Legislature and Franklin, engaged in a a four year war and witness to hidden secrets and gubernatorial subterfuge, saw yet another Penn-Morris duplicitous initiative.. That drew Franklin out, and on August 6th, a day later, Franklin publicly broke with Penn and Morris:

On August 8th he flayed Morris as the ‘hateful Instrument of reducing a Free People to the abject State of Vassalage’, while on August 19th he attacked him for not having ‘that Spirit of Government, that Skill, and those Abilities that should qualify him as [governor]’. He also branded him a ‘Knave“, a ‘Fool‘, a ‘Liar‘,, and a ‘Libeller‘. On Penn he was no easier. ‘How odious must it be to a sensible manly People, he declared on August 8, to ‘find him who ought to be their Father and Protector, taking advantage of public Calamity and Distress, and their Tenderness for their Bleeding Country, to force down their Throats Laws of Imposition, abhorrent to Common Justice and Common Reason. On August 19th he fumed “Vassals must follow their Lords to the Wars in Defense of [the Lord’s] lands, but Our Lord Proprietary, though a Subject like ourselves, would send us out to fight for him, while he keeps himself a thousand Leagues remote from Danger! Vassals fight at their Lord’s Expense, but Our Lord would have us Defend his Estate at our own Expense! This is not merely Vassalage; it is worse than any Vassalage we have heard of; it is something we have no adequate Name for; it is even more slavish than Slavery itself‘”.  H[99] James M. Hutson, “Benjamin Franklin and Pennsylvania Politics, 1751-1755: A Reappraisal“, p. 359.

Strong letter to follow!

Needless to say, the contentious stalemate between Morris and the Legislature/Franklin continued through to late September 1755. Seemingly the land tax and Penn’s reaction to it was the chief matter, but as we have asserted, it was the lightning rod (pardon the pun) for Franklin and the Legislature: they had moved on to more fundamental issues. Paper money and the terms of its issuance were now weapons to attack, not issues to debate. Rhetoric of the time unequivocally demonstrates that removal of the proprietorship was what was on the table. [See Thayer, p. 43 for support]. Having said this, the reader might wonder what the situation was on the western periphery after Braddock’s defeat? Hell in a handbasket comes to mind. Communication being what it was, reports were anecdotal, sporadic, and exaggerated–and what official reports there may have been, Morris did not release them. Thayer asserts he held them back consciously seeing that in their ignorance the Legislature and Quakers would further compromise themselves. In late December 1755, with the Legislature on the eve of its adjournment, Morris confirmed to the Legislature that he had no information to release. Several days after that word spread like wildfire about a serious of Indian massacres of isolated settlements that resulted in a large loss of life. The western frontier simply collapsed and its population transformed into refugees. Mass hysteria gripped the Province, its media, and its residents.

The deterioration continued into 1756–as did the legislative stalemate. To bide the self-defense over in the interim, the Legislature found funds in its Loan Office to subsidize the western frontier defense. Incredibly, Issac Norris, a leader of the pacifist Quakers, like Franklin in 1746, raised a public subscription of 10,000 pounds to finance the self-defense of the western frontiers. A serious Indian attack upon an isolated Penn Creek settlement, and another one in Great Cove in Cumberland County, however, put the Legislature (and Quakers) on steroids–coming back into session and approving a 60,000 pound paper money bills of credit–and to satisfy Quaker fears, started an commission-investigation as to what had gone wrong with Indian-Pennsylvania relations. The implication was that the Penn Proprietary had fueled bad relations in the manner by which it had negotiated land sales from the Indians, and sold to European immigrants. Predictably that infuriated the Penn and his Deputy Governor. The Deputy Governor asserted his own rights and left to “manage” affairs in the western periphery on his own authority.

Even in these conditions the Legislature, nor Franklin, nor the Penn Proprietary would budge an inch on the obstructionist land tax refinancing. The former two publicly resisted any exemption of the Proprietor from the land tax. Franklin again resorted to financing a militia, and successfully introducing and passing legislation to do so–which in defiance of Quaker votes–passed and was signed by the Deputy Governor. In return the Assembly, while asserting its authority to do so, backed away from taxing the Proprietor for his land–finally allowing the passage and implementation of a 60,000 pound issuance. The “real” motivation for the breakthrough compromise was a western “farmers” revolt/invasion of Philadelphia that threatened the security of that city–and the Legislature itself. Our old Quaker leader, William Allen wrote during this time period that “there were four thousand families living beyond the Susquehanna, most of whom were Scots Irish. If they were driven across the river among the Germans and others, he declared ‘there will be next to a civil war among them’. Fortunately, the situation improved in a few weeks, as help arrived” [99[ Theodore Thayer, Pennsylvania Politics and the Growth of Democracy, 1740-1776 (Pennsylvania Historical and Museum Commission, 1953), p. 47. The situation previous to Allen’s late December-early January (1756) comments was not much better. On November 20, 1755, Franklin submitted legislation recreating his “Association” militia (again based on voluntary membership, with officers chosen by the soldiers, protections of civil liberties, and consent for use outside the jurisdiction). Quickly passed by the Legislature (with only four staunch Quakers in opposition), it was also speedily signed by Governor Morris whose decision as he related was “to sign the bill or face the Mob” which was moving upon the city from the frontier” [99] Theodore Thayer, Pennsylvania Politics and the Growth of Democracy, 1740-1776 (Pennsylvania Historical and Museum Commission, 1953), p. 46.

Panic, therefore, finally forced a consensus on the warring parties in Philadelphia–or at least the votes and the Deputy Governor’s signature–that finally led to the successful passage and eventual implementation of a 60,000 pound paper money issuance “for the King’s use” WITH an exemption from the land tax for the Proprietor–an issuance that had commenced four years earlier. Even in this moment of extreme tension, the Assembly included in its legislation an assertive clause that the Proprietor exemption in this legislation “in no way repudiated the right of the province to tax the Proprietors: “the Right of granting Supplies to the Crown in this Province is alone in the Representatives of the freemen met in Assembly (this being essential to the English Constitution) [99] Theodore Thayer, Pennsylvania Politics and the Growth of Democracy, 1740-1776 (Pennsylvania Historical and Museum Commission, 1953), pp. 45-6

Wrapping Up Pennsylvania’s Use of Paper Money: a Few Observations

As the reader can see, a case study of Pennsylvania paper money policy-making reveals not only the controversy and complexity involved in paper money as either a currency or a strategy for economic development. What it also does is encapsulates the defining features, key policy dynamics, and the behavior of the Penn sole proprietor policy system that governed the colony from its first day in 1782 to literally its last in 1776. With only a bit of exaggeration one might say that paper money and the policy-making associated with it, brought the Legislature and the Proprietor into a policy-making civil war a generation (twenty years) before the American Revolution. In the ensuing decade that followed the Legislature pursued Parliamentary action to remove the Proprietor and to install a Crown-appointed governor in its stead. A generation of Pennsylvania politics, Quaker politicians for the most part, after 1755 considered that initiative as cornerstone and fundamental to their definition of liberty-colonial democracy. In furtherance of this end, one of them, a former Speaker, Benjamin Franklin, was sent to London, off an on for the next decade and half, to argue the matter directly. That story will be addressed in further modules–in some ways it is as complex as is the one we have just endured.

Pennsylvania’s sole proprietary policy system was in many ways very unique to Pennsylvania–and noticeably different from other proprietary colonial policy systems–most of which were not a sole proprietary held by one individual and his descendants. That it lasted, persisted for nearly a hundred years, is testimony itself to the heritage and policy-making legacy that was carried forward into the design and conceptualization of Pennsylvania post-revolutionary governance as an American State in both the Articles of Confederation and the 1789 Early Republic. That story too will be picked up in later modules in this chapter. Suffice it to say at this point paper money as a policy issue never was able to overcome the fragmentation of the sole proprietorship, the bimodal chasm in its politics, and the biases of the Quaker–and Midlands–political culture. They all played off of each other–and like a pinball collided with other policy issues (defense and war), and with key cultural values such as individual privatism, limited government, and pacifism. The role of Franklin as the personification of “entrepreneur privatist to the rescue” suggests the system endured so long precisely because it thru off considerable policy-making to the private sector, eschewing many opportunities for government to establish its jurisdiction or presence in the process. What is especially frustrating is having to read the same problems/issues reappear again and again with a predictability that one is shocked how the system, despite its experience with these problems, proved unable to find a way to resolve. Calvary on horses in the nick of time is not something one an always count on–as we discovered in this module.

Still and all, there is no disputing the obvious. The crisis of Pennsylvania’s drift to independence, and the crisis that transformed its policy system into one destined for American statehood, occurred in 1755, not in 1775. That the crisis took Pennsylvania down a different road than the other colonies will be quickly very apparent–and will cause notable departures from the events followed by other key American colonies–which amazingly played out in the new forms of governance/structures that were instituted in 1776 and later in 1789. In its 1953 second century assessment, the Commonwealth of Pennsylvania and its Historical and Museum Commission’s classic, Theodore Thayer ended discussion on this topic with the following:

The year 1755 was the most significant in the [colonial] political history of Pennsylvania. That year the old pacifist [Quaker] power crumbled before the rising tide of French expansion in the Ohio Valley. At the same time th Quaker Party came under the spell of Benjamin Franklin who projected a popular program for Pennsylvania which was to direct the course of Pennsylvania politics for the next ten years. Eventually Pennsylvania democracy broke the power of the Proprietors. In the following decade, it went on to achieve independence and to provide for the State a democratic constitution. [99] Theodore Thayer, Pennsylvania Politics and the Growth of Democracy, 1740-1776 (Pennsylvania Historical and Museum Commission, 1953), p. 47