24 October 2012

Pennsylvania – Creditors vs Debtors




The Whiskey Rebellion by William Hodgeland, 2006, Excerpts

In Pennsylvania, the radical state constitution allowed ordinary people an unusual degree of access to the government. The Pennsylvania assembly became a tense place. Throughout the eighties, power lurched back and forth from the party of creditors and merchants. The thing that truly dismayed the Morris circle was the Pennsylvania property requirement for voting: virtually none. Nor was there one for holding office. The poor could not only vote in Pennsylvania but also hold office.

Morris and other creditors had picked up depreciated Pennsylvania bonds, at a fraction of face value, from people in urgent need of cash. Having bought at a deep discount, creditors now hoped to get the state not merely to pay interest on but to actually pay off the debt, at face value, for an overnight creditor bonanza.

The radicals proposed instead to depreciate the bonds, by law, to real market value, about one-quarter face value, and make those depreciated certificates a legal tender for paying taxes, state mortgages, public fees of kinds, requiring creditors to accept that paper for payments on loans – never indeed redeeming them in gold and silver. Morris and other creditors, forced to accept these depreciated bills, castigated paper as the legalized pillage of the rich.

Pennsylvania State Flag


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