The Land Bank, Sam Adams, and the Revolution
A Now-Forgotten Crisis That Primed Massachusetts for Independence
Oct 4, 2009
Massachusetts was the focal point of discontent in advance of the American War of Independence. Every American schoolchild learns about the Boston Massacre, the Boston Tea Party, and the Battles of Lexington, Concord, and Bunker Hill, all occurring in Massachusetts before the Declaration of Independence in 1776.
Why was Massachusetts the center of the rebellion? Why did Massachusetts, of all the colonies, take up arms first?
Resentment Over Intervention by Parliament
Among the reasons was resentment over intervention by the British Parliament into a crisis in Massachusetts in the 1740s. That intervention had to do with problems related to money and the economy in Massachusetts. Parliament's actions angered many people, especially farmers. It also ruined the fortunes of some, including Deacon Adams, the father of Samuel Adams, who became a leading revolutionary figure. One of the lessons of the episode was the knowledge that Parliament could and would act against the wishes of the majority. Young Sam Adams, among others, remembered.
The controversy that cause such a stir had to do with what was called the Land Bank. A chronic problem in colonial America was a shortage of coins made of silver or gold. Paper money was almost unknown. Coins made of precious metal was the only currency everyone trusted. But too few coins were in circulation. Many people managed by offering credit. Many then accepted goods, rather than cash to pay off debts. A tavernkeeper, for example, might keep a tab for a customer who bought drinks and meals on credit. That customer might then eventually settle the debt by, perhaps, shoeing the tavernkeeper's horse. Many people recognized that this system was not satisfactory.
Shortage of Cash, Hard Times
In the 1740s, problems associated with the shortage of cash came to a head with hard economic times. Many farmers and artisans found themselves deeply in debt, mostly to wealthy merchants in Boston, who exacerbated the coin shortage by shipping money to Britain to purchase goods to sell in America.
Deacon Adams (whose name was Samuel, but was known as Deacon) was among the leaders of a movement to solve the money shortage by issuing paper money. The plan called for the creation of a Land Bank. The Land Bank would issue paper money backed, not by precious metal such as silver or gold, but by land. This paper money, Land Bankers hoped, would stimulate the economy as people accepted it and used it to pay off debts and buy goods. Most people in Massachusetts liked the idea. This was evident in elections as people voted into office men who favored the Land Bank.
Opposed by Governor, Many Merchants
But the Land Bank was opposed by the governor, who was appointed by the king. The governor prohibited appointed officials in the colony to associate with the bank. The bank was also opposed by some merchants, especially those who were owed money. They anticipated that the Land Bank money would be inflationary--an advantage to people in debt, but a disadvantage to creditors. Some saw the Land Bank as a scheme for debtors to escape their full obligations. Also, many merchants were involved in international trade and therefore preferred the most widely accepted form of currency--gold and silver. But despite this opposition, the Land Bank was launched.
Then, those merchants, working with the governor sought help from the British Parliament. Parliament responded by declaring the Land Bank illegal.
Many people in Massachusetts recognized Parliament's action as potentially ruinous. Some considered resisting. But no organized resistance emerged. In the end, the Land Bank collapsed. Deacon Adams was financially ruined. Samuel Adams, a student Harvard College at the time, was reduced to waiting tables at the college, although he remained a student. Samuel Adams spent years sorting out his father's financial mess.
Political Faction of Discontented Men
The main group of people supporting the Land Bank eventually formed the backbone of the political faction of discontented men that Samuel Adams pointed toward rebellion.
The crisis concerning the Land Bank in many ways paralleled the crisis in 1775 that led to the start of the American Revolution. In both cases, the majority of people in Massachusetts were pitted against a small, but wealthy, powerful and entrenched faction. In both cases, that entrenched faction called on Parliament for help. In both cases Parliament responded against the will of the majority. In both cases an Adams was in the middle of it all.
However, in 1775, Massachusetts was better prepared than in the 1740s to resist Parliament.
Sources:
Dunn, Elizabeth E., " 'Grasping at the Shadow': The Massachusetts Currency Debate, 1690-1751," The New England Quarterly, Vol. 71, No. 1 (Mar., 1998), pp. 54-76.
Miller, John C. Sam Adams, Pioneer in Propaganda. Boston, Little, Brown, and Company, 1936.
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