Gov. Belcher took strong ground of opposition to the Land Bank which had begun operations without authorization. He published a proclamation warning the people against the notes as fraudulent, contrary to civil order, and harmful to trade. He treated the bank as rebellious, since it was unauthorized, and he tried to compel all civil and military officers to abandon it. The Specie Bank also commenced business. The government was, in fact, generally so lenient and indulgent that it was very weak when it tried to exert authority. One project led to another until there was a bank mania in a small way.
These projects led to an extension of the Bubble Act to the colonies.[1] The act is entitled, "For restraining and preventing several unwarrantable schemes and undertakings in His Majesty's colonies and plantations in America." All clauses of the Bubble Act "did, do, and shall extend to, and are and shall be in force and carried into execution" in America.
The act went on to say that the occasion for it was the doubt whether the act of 1719 could be executed in America, because the aggrieved persons must, according to that act, bring suit in Westminster, Edinburgh, or Dublin. This act now provides that suits may be heard in any of the King's courts of record in America. Noteholders were given a right of action against each partner for the amount and interest, although by the tenor the note might not yet be due. Any person suffering harm might recover treble damages and costs; and the persons composing the company were liable to a premunire, according to 16 Richard II. These penalties were all to be arrested if the company should dissolve and go into liquidation before September 29, 1741. According to the fashion of the times, this enactment was met in a recalcitrant disposition. All the jargon about liberty and the charter was repeated. The irritation produced in the Colonies by the attempts of the mother country to restrain paper issues contributed more than perhaps any other one thing to produce that estrangement which resulted in the Revolution. Upon this occasion the first impulse of those interested in the Land Bank was to defy the law, and it appears that the bank produced no little demoralization of civil institutions for a year. As we shall see below, the States fought unceasingly against unchartered issuers of paper, from the Revolution to the Civil War; and the federal government, in its dealings with Territories, which are a complete analogon to Colonies, has reserved to itself the right to disallow any legislative acts of the Territories and has exercised that right, notably in respect to banks.[2]
September 22, 1741, a committee of the General Court was appointed to meet at Milton "to examine the condition of the Land Bank. They find £49,250 of its notes are struck off and endorsed and that the Treasurer had issued them from his hands to the amount of £35,582, and that the directors employ £,4,067 of them in trade. This investigation is soon followed with heavy restrictions upon the funds of the company."
