The New
London Society for Trade and Commerce
By
Bruce P. Stark
In
the period between 1690 and 1740, Connecticut experienced extremely
rapid growth. Population increased from around 27,000 in 1690
to about 90,000 in 1740, and the number of incorporated towns
jumped from twenty-eight in 1690 to fifty-three in 1735. The
growth,
however, was uneven, for population grew much more rapidly east
of the Connecticut River than west of it. Eastern farmers,
aspiring
petty traders, and artisans, seeking to improve their economic
circumstances, united in support of monetary inflation and
plans
to promote international trade. Unsuccessful efforts were made
in 1726, 1728, and 1729 to augment the money supply by establishing
a land bank and printing large quantities of paper money, called "Bills of publick Credit." In May 1732, however, the
General Assembly endorsed a memorial signed by sixty-one men,
mostly from eastern Connecticut, wanting to promote trade with
Great Britain and the West Indies and to encourage the fishing
industry. The legislature designated the memorialists the "New
London Society united for Trade and Commerce" and gave the
organization privileges similar to those granted joint-stock
companies.
The
original petition and the enabling legislation made no mention
of emitting "Bills for Currency," but the New London
Society soon began to circulate bills of credit based upon real
estate mortgages, making the trading company a land bank, the
first such organization in North America. By January 1733 some
£15,000 in Society bills of credit entered circulation, providing
a badly needed medium of exchange. But the Connecticut government,
dominated by fiscal conservatives, intervened. The act establishing
the Society was repealed in February 1733, and the government
imposed counterfeiting penalties upon all those who emitted currency
designed as a medium of exchange. The General Assembly then attempted
to placate paper money advocates by passing two acts which authorized
the emitting of £50,000 in bills of credit. Of that sum, £15,000
was made available to holders of worthless Society bills.
The
economic problems that led to the establishment of the New
London
Society for Trade and Commerce--the lack of a circulating medium
of exchange and the desire to gain the profits from international
trade--were not solved by the destruction of the Society and
the
colony's emission of 1733. Paper money advocates blamed the government
for their economic difficulties and attempted to displace unsympathetic
magistrates. In the winter of 1739-40, dissatisfied politicians
from western Connecticut, interested in promoting the fortunes
of Thomas Fitch (c. 1696-1774), and paper money men from eastern
Connecticut agreed on an election plan to elevate Fitch to
the
Council and replace enough additional assistants to make a paper
money majority in the Upper House. The plan succeeded. Three
assistants
lost their Council seats, and the legislature authorized the
printing of £30,000, in bills of credit of a new tenor.
The
election of 1740 marked the beginning of a new era of political
factionalism in Connecticut, launched the political careers of
Fitch and Jonathan Trumbull (1710-1785), and marked the end of
more than a decade of agitation over the paper money issue, an
issue brought into the political limelight by the establishment
of the New London Society of Trade and Commerce.
For
Further Heading
Stark,
Bruce P. "The New London Society and Connecticut Politics,
1732-1740." Connecticut History, XXV (January 1984),
1-21.
*
Entry under revision.
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