Ashore and Afloat: The British Navy and the Halifax Naval Yard Before 1820

9. Paying Bills and Raising Cash

Chapter Nine PAYING BILLSAND RAISING CASH "I have heard some say that if it were not for the troops and navy about Halifax , that we would have no money in circulation."1 Thenavalyard,when payingboth wages toits workers and the invoices from local contractors, acted as a quasi-bank. In this way it resembled the activities of the British army in North America, which helped fuel the money markets wherever their deputy-paymasters established themselves.2 Like them, the Halifax naval storekeeper was responsible for keeping the cash box adequately supplied. Todo this he advertised in the Halifax newspapers for those who possessed cash surpluses and who wished to exchange some cash for sterling bills of exchange. This navy bill of exchange, drawn on the naval pay office in London, was usually at thirty days' sight, at which point itbegan to earn interest. The bill became part of the navy's unfunded debt, guaranteed by government . These newly-drawnbills of exchange then became instrumentsof exchange in the Halifax money market. The final holders sent them to London to be redeemed, using the proceeds for a variety of purposes, but usually to pay off commercial or private debts owing in England. The navybill,likethose drawn by the army abroad,was usually considered an excellentform in which to hold liquidcapital. Approval for such bills of exchange being drawn had first to be obtained from the yard's resident commissioner, or in his absence the commander-in-chief, or senior sea captain. The procedure was spelled out in successive editions of the so-called General Instructions. Thereupon the naval storekeeper contacted the postmaster, the collector of customs, the receiver for Greenwich hospital and, from 1807, the regis- 202 Part Three: Economic Impact trar of the vice-admiralty court, "or other offices in the practice of remitting money to England on account of government" to inform them of the yard's cash needs.3 This was done before the storekeeper tested the local money market which was dominated by the import merchants of Halifax. By the time the navy established itself in Halifax and began to construct a careening yard in the 1750s, an impressive and successful system of public finance had been flourishing in Britain for decades. The British government from the 1690s had acquired a reputation, unsurpassed by any other European state with an extensive colonial empire, for both borrowing money and in paying interest regularly on its accumulating national debt. The size of the debt, which occasioned excessive and needless political anxiety and thus helped trigger the revolt in America in the 1770s, became an expanding instrument for investment by capitalists, a subject now understood well.4 It enabled Britain in wartime to put far more battalions into the field, subsidize many more foreign troops, and equip and man more warships than would otherwise have been possible. In the earliest days of Halifax, frequently the naval storekeeper could not raise enough cash in the colony, so rudimentary was its earlyeconomy and so dependent was it on government spending. He had to resort to the Boston or New York money markets, in the same manner as his military counterpart. The only loss ever experienced in shipping specie to Halifax occurred when sloop Granby with an experienced crew was lost at the mouth of Halifax harbour. Much of the cash was recovered, despite the fact that the poor fishers nearby secreted some of it.5 The details in Table 9.1 provide, among other things, a rare view of the variety of coins then incirculation. This American cash source dried up in 1775 with the outbreak of hostilities along the American coast. Thereafter the cash needs of the careening yard were filled elsewhere, principally in Jamaica but occasionally also from England. Later, in the first decade of the nineteenth century and beyond, when the cash demands on the yard were extreme, cash had to be imported from Jamaica in large quantities. When purchasing coin elsewhere, officers faced several problems. The most important related to the exchange rate obtained for sterling bills, an issue imperfectly understood by many sea officers. The navy, like all institutions of the British government, dealt in sterling. Yeteach of the colonies, Nova Scotia included, developed a different currency Paying Bills and Raising Cash 203 Table 9.1 Specie Recovered from Wreck of sloop Granby, 1771 Bag of gold unmarked 161 half-joes 4Q8V4 guineas 75 pistoles 914...