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Colonial New Jersey's provincial fiscal structure, 1704–1775: spending obligations, revenue sources, and tax burdens during peace and war

  • Farley Grubb (a1)
Abstract

I reconstitute the spending obligations and revenue sources of colonial New Jersey's provincial government for the years 1704 through 1775 from primary sources using forensic accounting techniques. I identify and analyze the methods for raising revenue to meet normal peacetime and emergency wartime expenses. I calculate the provincial tax burdens imposed on New Jersey's citizens. I identify how Britain interfered with New Jersey's fiscal structure. I estimate what the revenues and tax burdens would have been without this interference. New Jersey paid for war expenses by issuing bills of credit, spreading the tax burden of redeeming these bills into the future. New Jersey paid its yearly administrative costs with current property taxes and with current interest earnings from loaning paper money. In the absence of British interference and wars, New Jersey could have driven tax burdens to zero by using interest earnings to pay for all its provincial administrative costs.

Copyright
Corresponding author
F. Grubb, Professor and NBER Research Associate, Economics Department, University of Delaware, Newark, de 19716 USA. Email: grubbf@udel.edu. Website: www.lerner.udel.edu/faculty-staff/farley-grubb .
References
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F. Grubb (2015). Colonial New Jersey's paper money regime, 1709–1775: a forensic accounting reconstruction of the data. Historical Methods, 48, pp. 1334.

D. L. Kemmerer (1939). The colonial loan-office system in New Jersey. Journal of Political Economy, 47, pp. 867–74.

J. J. McCusker (1978). Money and Exchange in Europe and America, 1600–1775. Chapel Hill, NC: University of North Carolina Press.

I. Rodriguez-Tejedo and J. J. Wallis (2012). Fiscal institutions and fiscal crises. In P. Conti-Brown and D. A. Skeel Jr (eds.), When States Go Broke. New York: Cambridge University Press, pp. 939.

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Financial History Review
  • ISSN: 0968-5650
  • EISSN: 1474-0052
  • URL: /core/journals/financial-history-review
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