A Counterfeiter's Paradise (4 page)

Although the war had a catastrophic effect on the economy, it also ultimately enabled Hutchinson to follow through with his plan to retire the colony’s paper money. After an extended negotiation, Parliament agreed to reimburse Massachusetts for its expenses from the Louisbourg campaign. The settlement, to be paid mostly in silver, represented a large injection of coin into a colony where precious metals were in short supply. For hard-money advocates like Hutchinson, this was the opportunity they had been waiting for. On January 25, 1749, after much wrangling by Speaker Hutchinson, the Massachusetts House of Representatives passed a bill committing the entire Louisbourg reimbursement to the redemption of the colony’s paper money. For a single year, from March 31, 1750, to March 31, 1751, anyone would be able to bring paper notes to the Old State House in Boston and exchange them for silver and copper coins; by April 1, 1751, Hutchinson hoped, Massachusetts would finally have a hard currency. Pushing the measure through the legislature wasn’t easy, but Hutchinson was satisfied with the outcome. “I am convinc’d it was absolutely our Duty,” he wrote, “to bring our wicked Mony to an End.”

The approaching elimination of paper money hung over Boston like a dark cloud. In the streets people could be overheard praying that the ship carrying the payment from England would sink at sea: the coin could do far less damage deposited on the ocean floor, many colonists felt, than in Hutchinson’s hands. After a five-week voyage, the
Mermaid
arrived without incident in the fall of 1749. Onlookers watched the ship unload its cargo, which was carried to the town treasury and secured in a specially prepared underground vault. The spectators’ mood was grim. “Few Tokens of Joy were shewn on its landing,” one newspaperman observed, “but on the contrary, an uncommon Gloominess appeared in most Countenances.” William Bollan, the colonial official who had spent the last four years in England negotiating the reimbursement, feared that the gloom would soon turn to rage. He urged Hutchinson to hide out at his summer home in nearby Milton until emotions had cooled.

Instead of subsiding, tensions only grew in the coming months. Colonists on both sides of the issue tangled in the pages of Boston’s newspapers, which became inundated with dispatches from the money war. Currency debates in local papers were nothing new: back in August, a pseudonymous author in the
Boston Evening-Post
warned that the abolition of paper money would force Massachusetts to return to a barter economy. “[W]e shall have the pleasant Sight of a Housekeeper groaning under the Burden of a Barrel of Flour to Market, to barter for Mutton,” he wrote. But now that the silver from England had reached Boston, the issue acquired a new sense of urgency. Readers wrote in, complaining that moving to a hard currency—which would considerably decrease the amount of money in circulation—would make it impossible for them to do business, settle debts, or pay taxes. The opposing camp shot back, responding that the plan would restore order and stability to the colony’s economy. Hutchinson himself joined the fray. In a letter to the
Boston Gazette
, he argued that paper money had sown “Fraud, Injustice and Oppression,”
and, true to form, spoke up for the colony’s creditors, who suffered under a system where people paid “their Debts with a less Value than when they were contracted.”

As the bickering continued, the fault lines became increasingly clear: between rich and poor, creditor and debtor, town and country. In a satire published in the
Boston News-Letter
, a country trader named Honestus comes to Boston to pay off his debt to Politicus, a wealthy merchant. Poli-ticus tries to interest his longtime customer in the latest imported goods, but Honestus, reluctant to dig himself deeper into debt, refuses. Eager to make the sale, Politicus promises that when silver dollars replace paper notes, he’ll have nothing to worry about:

The dialogue summed up the anxieties of many colonists. Like Ho-nestus, they feared that Hutchinson’s scheme would deprive them of a
functioning medium of exchange, and that precious metals—stockpiled by the superrich, tied up in overseas trade—would forever remain out of their reach.

PEOPLE HAD A LOT
at stake in the currency crisis of 1749. With their livelihood on the line, colonists took a strong interest in policies that would impact them directly. But while the consequences couldn’t have been more concrete, the debate itself often became quite abstract.

At the heart of the squabble between paper and metal was a philosophical dispute between two very different theories of value. Hard-money supporters like Hutchinson saw value as being fixed and intrinsic. They believed that money only had value in proportion to its metallic content, and that silver and gold alone provided the bedrock upon which the edifice of a secure economy could be constructed.

Paper’s proponents, on the other hand, thought of money in more utilitarian terms: they argued that money had value because it could fulfill certain tasks, like buying a bushel of wheat or a day’s worth of labor. Precious metals weren’t intrinsically valuable, but rather derived their value from a cultural convention that made them exchangeable for goods and services. If money was a standard of exchange agreed upon by a group of individuals—defined not by its form but by its function—then a scrap of paper could serve the purpose just as well as a silver coin. Through the power of belief, paper could be magically transformed into money. As one Congregationalist preacher from Ipswich, Massachusetts, pointed out in a widely read pamphlet, life was full of such acts of faith. He likened paper bills to women: “necessary Evils…Metamorphised into things called Wives.”

Paper money’s most articulate advocate came not from Massachusetts but from Pennsylvania. Benjamin Franklin was twenty-three years old in 1729 when he published “A Modest Enquiry into the Nature and Necessity
of a Paper-Currency.” His immediate reason for writing the pamphlet was to convince the Pennsylvania legislature, which had been printing paper money since 1723, to put more currency into circulation. But while he was on the topic of currency, the young printer couldn’t resist engaging in the philosophical wrangling that so preoccupied his fellow colonists to the north. The true value of money, Franklin claimed, was its ability to purchase another man’s labor. “The riches of a country are to be valued by the quantity of labour its inhabitants are able to purchase,” he wrote, “not by the quantity of silver and gold they possess.” Since labor was what made money valuable, there was no reason to prefer precious metals to paper. Both were arbitrary instruments of exchange, but paper provided a more plentiful and convenient material.

Increasing the quantity of paper money would have a number of positive effects, Franklin argued. It would prevent wages from declining, keep interest rates low, and decrease dependence on European exports. He made a convincing case. His essay was widely read, and succeeded in persuading the Pennsylvania legislators to authorize another issue of paper money. Two years later, the Assembly hired him to design and print the notes. In his
Autobiography
, Franklin recalled the episode with characteristic immodesty. “This was another advantage gained by my being able to write,” he observed. As Pennsylvania’s official money manufacturer, Franklin came up with creative ways to thwart counterfeiters. He intentionally misspelled the word “Pennsylvania” on his bills, hoping to catch forgers who corrected the error. He also added botanical motifs by casting real leaves in lead and then printing them directly onto the notes, creating intricate patterns that were difficult to duplicate.

Better than anyone, Franklin understood paper’s potential. Faced with a scarcity of coin and an abundance of entrepreneurs, colonial America needed a way to convert the ambitions of its inhabitants into real economic growth, and paper currency met that need. Paper let ordinary people—not just the privileged few with access to precious metals—participate in the
buying and selling that fueled local markets. Franklin’s defense tackled the core question of the currency debate: What is value and how is it created? By putting labor at the center of economic value, he cast the laboring classes as society’s most important members—the shopkeepers, artisans, and small businessmen that in Franklin’s view represented the soul of colonial America. Paper reflected hard work, ambition, and enterprise; it offered a practical alternative to the idolatrous fever for precious metals that afflicted the Old World.

Franklin’s greatest insight was that for money to have value, people have to believe in it. Money can’t do anything by itself; unlike a gun or a banana, it has no utility other than as a medium of exchange agreed upon by a group of individuals. This is most obviously the case with paper money: it depends entirely on confidence, which is why it can become worthless overnight if people lose faith in it.

The intangible nature of paper money caused its detractors in the Massachusetts money war to condemn it in unusual terms: not just as financially unsound but as immoral and even supernatural. One Protestant minister compared printing paper bills to the “Popish Doctrine of Transubstantiation,” a false metamorphosis that preyed on the laity’s will to believe. Substituting paper for silver and gold was not only deluded, it was blasphemous. Another hard-money supporter extended the religious argument even further: paper money, in usurping the role traditionally reserved for precious metals, represented “an abomination to the righteous GOD.” Silver and gold were eternal, God-given measures of value. Spurning them in favor of something man-made disrupted the natural order of things, and betrayed an unholy desire to play God.

According to this logic, paper money’s sinful origins meant that its use inevitably encouraged immoral acts, like debtors cheating their creditors and speculators exploiting the volatility of value. Paper was a kind of illusionist’s trick with potentially catastrophic consequences, an intrinsically deceitful medium that bred bad behavior as it spread like a virus through
the body politic. Both the officials who printed money legally and the counterfeiters who forged it were sorcerers of a sort, inspiriting otherwise worthless paper with the power to be exchanged for goods and services.

The oft-repeated charge that paper money was unnatural revealed a deeper, more tangible fear. Paper posed a very real threat to the traditional class system of colonial America, an order that its self-appointed stewards liked to think of as natural. While hard currency tended to be concentrated in the hands of rich merchants, paper money was more widely distributed and changed hands more frequently. As a fluid and fickle form of wealth, paper’s dynamism undermined a static social arrangement built around fixed classes and a fixed currency. An entrepreneurial class buoyed by credit clearly unnerved traditionalists, who were terrified of an economy where value had been sublimated into something spectral and slippery. Their alarm at the “ghost” of paper money had a metaphysical aspect: what they really feared was a world where appearances no longer reliably corresponded to reality, where a piece of paper could equal a pile of gold or an uncultured tradesman could become a powerful member of society. No one typified this phenomenon better than counterfeiters, who made a fortune capitalizing on the interval between appearance and reality. They were the most extreme exemplars of paper money’s corrosive effect on social conventions: men of simple origins who became rich and famous riding the coattails of an incorporeal currency.

IF THE PHANTOM OF PAPER
frightened men like Thomas Hutchinson, then Owen Sullivan was the flesh-and-blood fulfillment of their fears. In many respects, he was their worst nightmare: a hard-drinking Irish immigrant who used colonial America’s dependence on paper currency to become as wealthy as a prosperous Boston merchant. It was an exercise in immorality that only an economy built on paper could produce.

The only account of Sullivan’s early life is a pamphlet that appeared
posthumously entitled
A Short Account of the Life, of John—alias Owen Syllavan
. He probably dictated the narrative just before his death to someone who transcribed and printed it. Although his embellishments and omissions, or those of the pamphlet’s printer, are impossible to know, the sequence of events he describes fits the chronology outlined by colonial records and newspaper accounts. Printed in twelve pages of thick black type, the confession recounts Sullivan’s life, beginning with his childhood in Ireland in the 1720s and 1730s.

Imagine a child cowering in bed while an invisible spirit floating somewhere within the lightless room calls his name for several minutes before disappearing. It starts each night at eleven o’clock, and continues for days, weeks, months: ministers from local parishes come to pray alongside the boy’s bed, begging him to repent of his sins, hoping to dispel the spirit with prostrate displays of devotion. Word spreads, drawing hundreds of visitors from near and far to the child’s room to get a glimpse of the afflicted boy and convey their sympathies. But the spirit keeps returning, now calling so loudly that the windows of the house shake, and when the child falls ill, the voice becomes even more powerful, and the boy, lying in bed, feels a hand press the skin between his shoulders as if the specter, after three months of nightly visitations, were at last reaching down to pry his soul from its mortal cavity.

Sullivan started hearing voices as a young boy. Born and raised in a seaside village in southeastern Ireland, he became a troublemaker early, perhaps out of boredom, perhaps on the advice of the demon that haunted his sleep. “[F]rom my youth I was always in all kinds of Mischief,” he confessed, “so that I never minded Father nor Mother, Sister nor Brother; but went on in all Manner of Vice.” He tormented his parents, who tried desperately to discipline their unruly son. First they locked him in his room with only bread and water, then they sent him to live with a schoolmaster. Neither reformed his ways.