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]vui §,((omi 
 
 malices aii. 
 
 |lev0ltttiona);g ^m. 
 
 BY J. W. SCHUCKERS. 
 
 • PHILADELPHIA: 
 JOHX CAMPBELL & SON. 
 
 1874. 
 
 A. C. BRYSON &• CO., PRINTERS, 607 CHESTNUT STREEiT.'^ 
 
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TO 
 
 MY FRIEND 
 
 COL. JOHN STILZ, 
 
 PHILADELPHIA. 
 
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 '^ r 
 
 ;/,l;Y 
 
 %xiti ^ctount 
 
 OF THE 
 
 S'^xmitt% antr ^w^tx Mmt^ 
 
 OP THE 
 
 
 PHILADELPHIA ; 
 JOHN CAMPBELL & SON, 
 
 740 SANSOM ST. 
 1874. 
 
 T 
 
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Entered, according to Act of Congress, in the year 1874, by 
 J. W. SCHUCKERS, 
 
 In the OfGce of the Librarian of Congress at Washington. 
 
 MEAKS AND DDSBirBBBT, 
 STEREOTTFBRS. 
 
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THE WRITER'S PREFACE. 
 
 I DO not pretend, in this little volume, to any new discoveries 
 touching the financial history of the Revolutionary War, but 
 only to having brought together, in one place, those facts which 
 are of prime interest and importance. They are written down 
 with almost statistical brevity, but he who thoughtfully reads 
 them will see how painfully our forefathers struggled and suf- 
 fered to bring us " out of the land of Egypt, out of the house 
 of bondage." 
 
 Ours is the only great nation which, in the Nineteenth Cen- 
 tury, has paid a public debt contracted for war purposes, and 
 it is not the least of the proud achievements of the American 
 people. I have brought my little book to an abrupt close, 
 because I wished to say here what might perhaps have been 
 more appropriately said in a closing paragraph. It is this: 
 That the most glorious celebration we could have have made 
 of our Centennial Anniversary, would have been the simple 
 
 announcement that, for a second time, in the first century of 
 
 (iii) ' 
 
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iv Preface. 
 
 our national existence, we had paid off a public debt. To do 
 this would have required great exertions and great sacrifices, 
 but such exertions and sacrifices were not beyond the powers of 
 the American people. 
 
 I will be allowed to add that the surest and safest way to a 
 resumption of specie payments is through the extinction of 
 the public debt. Its payment ought to be the paramount object 
 of every administration, and is a policy commended alike by 
 National Duty and National Honour. 
 
 J. W. SCHUCKERS. 
 
 New York, October 1st, 1874. 
 
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THE REVOLUTIONARY FINANCES. 
 
 Paper Money — technically called Bills of Credit — 
 were issued by the colony of Massachusetts Bay cer- 
 tainly as early as 1690 ; and probably some years 
 previously bills were emitted by private persons upon 
 "the security of private properties. There is evidence 
 that in 1686 a bank was formed in that colony by a 
 gentleman of Boston, with several others, some from 
 England, who were authorized to begin the issuing of 
 bills on the security of real and personal estates ; but 
 we have so little record of its history that no detailed 
 or definite account of it can be offered. We learn 
 from the Massachusetts Archives that authority was 
 given to seven persons to start a bank and issue bills, 
 in these words : "And having perused and considered 
 a proposall made to us by John Blackwell, of Boston, 
 Esqr., on behalf of himself and divers others, his parti- 
 cipants, as well in England as in this' countrey," liberty 
 is granted to the directors or " conservatives" of the 
 bank to commence the issuing of bills on real and per- 
 sonal security, and on merchandise. The writer of a 
 pamphlet, entitled " A Letter from one in Boston to 
 his Friend in the Country, in Answer to a Letter 
 
 5 
 
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6 The Revolutionary Finances. 
 
 directed to John Burrill, Bsqre., 1714," says: "Our 
 fathers about twenty-eight years ago entered into a 
 partnership to circulate their notes, founded on land 
 security, stamped on paper as our Province bills now 
 are."* 
 
 2. Bills of credit were issued by the several colo- 
 nies prior to the revolutionary war, and for their pay- 
 ment the public faith was pledged. They were called 
 in by taxes payable at different periods, and were not 
 only made receivable in payment of taxes, and of all 
 debts due to the government making them, but were 
 made a tender also in payment of private debts, until 
 this was prohibited by Act of Parliament in 1763. 
 Massachusetts led the way in making and issuing this 
 species of money. That colony incurred expenses in 
 an unfortunate maritime expedition against Quebec in 
 1690, much beyond its ordinary means of payment, 
 and to meet these expenses resorted to the expedient 
 of issuing bills of credit of the colony. This was after- 
 wards followed, as cases of emergency arose, by most 
 if not all the other British North American colonies. 
 They became less valuable, however, in every colony in 
 which they were issued, than gold and silver. In New 
 England they were valued at six shillings for a silver 
 dollar, and at that rate were denominated the lawful 
 money of that part of the country; in New York 
 they were valued at eight shillings, and in Pennsyl- 
 vania at seven shillings and sixpence for a dollar ; and 
 hence arose the different currencies in the several 
 colonies. Excessive emissions caused depreciations. In 
 
 * Nathaniel Painb : " Essay on Early Continental Currency." 
 
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The Revolutimiary Finances. 7 
 
 1745 Massachusetts alone — to pay the expenses of her 
 fortunate expedition against Louisbourg, and in other 
 preparations in the war then existing between France 
 and England — emitted bills to the amount of between 
 two and three million pounds lawful money. This 
 large increase in the amount of bills in circulation 
 naturally occasioned a greater depreciation, so that in 
 1748 eleven hundred pounds of these bills were only 
 equal to one hundred pounds sterling.' 
 
 3. Governor Pownall gives this account of the 
 Pennsylvania system : " I will venture to say there 
 never was a wiser or a better measure, never one 
 better calculated to serve the uses of an increasing 
 country, that there never was a measure more steadily 
 or more faithfully pursued, for forty years together, 
 than the loan office in Pennsylvania, formed and 
 administered by the Assembly of that province." He 
 gives a sketch of the loan office act passed in the year 
 1739, which he styles " the completest system of the 
 kind, containing all the improvements which expe- 
 rience had from time to time suggested in the execu- 
 tion of the preceding acts. By this act the trustees of 
 the loan office were to lend out the bills on real secu- 
 rity of at least double the value for a term of sixteen 
 years, to be repaid in yearly quotas or instalments 
 with interest. Thus one-sixteenth part of the prin- 
 cipal was yearly paid back into the office, which made 
 the payments easy to the borrower. The interest was 
 applied to public services; the principal during the 
 
 ' TiMOTHT FiLKiN : " Statistical View of the Oommerce of thfe" JQnited 
 States." 
 
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8 The Bevolutionary Fina7ices. 
 
 first ten years was let out again to fresh borrowers. 
 The new borrowers from year to year were to have 
 the money for only the remaining part of the term of 
 sixteen years, repaying by fewer and proportionately 
 larger instalments, and during the last six years of 
 the sixteen the sums paid in were not to be reloaned, 
 but the notes burned and destroyed ; so that at the end 
 of the sixteen years the whole might be called in and 
 burned, and the accdunts completely settled. The 
 trustees of the loan offices were taken from all the 
 counties of the province ; their residence in different 
 parts of the state giving them better opportunities for 
 being acquainted with the value and circumstances of 
 estates offered in mortgage. They were four years 
 continued in office, accounted annually to committees 
 of the Assembly, and at the expiration of that term 
 they were to deliver up all moneys and securities in 
 their hands to their successors before their bondsmen 
 could be discharged." 
 
 Various methods prevailed in the different colonies 
 for issuing bills, but the Pennsylvania system was 
 generally considered the best and safest; the paper 
 was made a legal tender in the payment of debts, and 
 generally maintained its original value, with slight 
 fluctuations, caused by a rise in gold and silver when 
 a larger quantity of these metals than usual was 
 wanted for exportation.* 
 
 4. In the modern mode of making war, money is 
 not less essential than valour in the field or wisdom in 
 the cabinet. The deepest purse decides the fate of 
 nations as often as the longest sword. It early occurred 
 
 ' Sparks : " Life of Franklin." 
 
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The Revolutwnary FiTiances. 9 
 
 to the founders of the American empire, that the 
 established fevenues of Great Britain must eventualljr 
 overbalance the sudden and impetuous sallies of men 
 contending for freedom, on the spur of the occasion, 
 and without the permanent means of defence; but 
 how to remedy the evil puzzled their wisest politicians. 
 Gold and silver, so far as was known, had not a physi- 
 cal existence in the country in any quantity equal to 
 the demands of war, nor could they be procured from 
 abroad, as the channels of commerce had been pre- 
 viously shut by the voluntary association of Congress 
 to suspend foreign trade. America having never been 
 much taxed in any, direct way, and being without 
 established governments, and especially as she was 
 contending against what was lately lawful authority, 
 could not immediately proceed to taxation. Besides, 
 as the contest was on the subject of taxation, the- 
 laying on of taxes adequate to the exigencies of war,, 
 even though it had been practicable, would have beeni 
 impolitic. The only plausible expedient remaining im 
 their power to adopt was the emission of bills of credit 
 representing specie, under a public engagement to 
 ultimately sink them in taxes or exchange them for 
 g >ld or silver.' 
 
 5. Pelatiah Webster, who wrote a series of Essays 
 during and subsequent to the war, which were full of 
 wisdom, and plethoric with italics, — a man well ac- 
 quainted with- the resources and financial condition 
 of the colonists, — says the current cash just before the 
 war was commonly estimated at about $30,000,000, 
 though the real sum did not probably exceed 
 
 ' Ram3at : " History of the American Revolution." 
 
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10 The Revolutionary Finances. 
 
 $12,000,000— of which about $5,000,000 was gold 
 and silver.' Colonial bills formed the chief part of the 
 circulating medium. 
 
 ■ Lord Sheffield — " Observations on the Commerce of America" — 
 estimated the specie in the colonies prior to 1775 at about $9,000,000 ; 
 Blodqett (" Manual") at about four millions. This latter is no doubt 
 much nearest the truth. — (Both cited in Seybekt's Statistics.) 
 
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The Revolutionary Finances. 11 
 
 11. 
 
 When, therefore, the Second Continental Congress 
 — an immortal body ! — addressed itself to a considerar 
 tion of the finances, almost immediately upon its 
 meeting. May 10th 1775, nothing was more natural 
 and probable than a prompt resort to paper money. 
 First, it provided for the creation of an army. Having 
 done this, and entirely conscious that the supply of 
 cash — (cash is a good word: a better than either 
 specie or coin, though the latter has a ringing sound, 
 cash being defined by Johnson to be " money ; properly 
 ready money ; money in the chest or at hand j" a good 
 thing to have and a sure friend) ; — the members of the 
 Congress being entirely aware, then, that the supply 
 of cash was inadequate even for the current and ordi- 
 nary business of the colonists, immediately betook 
 themselves to Bills of Credit, of which on the 22d 
 of June they ordered an emission of two millions of 
 dollars ; and in July another emission of one million. 
 Two joint treasurers ' were appointed as custodians of 
 
 * The original administrators or oustodians of the funds of the Conti- 
 nental Congress were two joint-treasurers, appointed July 29th 1775 ; 
 subsequently, August 6th 1776, one of these resigned, and one only was 
 continued in office. In February 1776, a committee of Congress, five 
 in number, was appointed to superintend the treasury; and in July 
 1779, a Board of Treasury was constituted ; its principal officers con- 
 sisted of five commissioners, two of whom were members of Congress 
 and three were not ; its duties were, the general management of the 
 
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12 Revolutionary Finances. 
 
 these and other funds of Congress, — and they were 
 authorized and directed, whenever they should have 
 gold and silver in their hands for the redemption of 
 the bills, to advertise the fact ; thereby signifying that 
 they were ready to pay it to such holders as desired 
 an exchange. Henry Phillips says he has made dili- 
 gent search — as perhaps some bill-holders did during 
 the war — for an advertisement of the treasurers, and 
 found none ! No doubt. However, the Congress, pro- 
 ceeding apparently upon the belief — and perhaps they 
 did believe — that gold and silver could be procured for 
 at any rate partial conversions, and also to provide 
 funds for the ultimate redemption and sinking of the 
 bills, made an estimate of the supposed population of 
 the colonies, including therein botli negroes and mu- 
 
 finanoes of the United States, the preparation of estimates of expendi- 
 tures, the auditing of accounts and the like. But this Board of Treasury- 
 was found to be an exceedingly cumbrous and inefficient body, and gave 
 way, in February 1781, to a Superintendent of Finance — Robert Mor- 
 ris — whose duties were substantially those exercised by the five com- 
 missioners, and more extensive in some important particulars, as will 
 hereafter appear. On the retirement of Mr. Morris, 1784, a Board of 
 Treasury was re-established ; this time consisting, however, of but tliree 
 members, and its powers included those of the Superintendent also. 
 The Treasury Department of the United States was organized under the 
 Act of Congress of 2d September 1789 ; next to the President, the prin- 
 cipal officer of this department is the most important personai;e in the 
 government, though technically outranked by the Secretary of State. 
 He digests and prepares plans for the improvement and management of 
 the revenue and for the support of public credit ; prepares and reports 
 estimates of the public revenues and the public expenditu*e8 ; collects 
 the revenue, and grants, in the way prescribed by law, all warrants for 
 moneys paid out of the treasury ; is the only member of the Cabinet 
 who makes annual reports directly to Congress ; he appoints a multi- 
 tude of subordinates, and exercises large and varied powers generally 
 in connection with his office. 
 
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Revolutionary Finances. 13 
 
 lattoes, and allotted taxes among them in proportions 
 based upon that estimate : the bills to be received in 
 payment of the taxes (which were of course to be laid 
 by the local assemblies of the states, the Congress 
 Laving no authority to do any such thing), and the 
 receipts into the state treasuries to be paid into the 
 continental treasury in four yearly instalments, the 
 first to become due in November 1779 ; it being the 
 expectation that long before the period arrived for the 
 first payment the war would be ended. Exclusive of 
 slaves at the South the estimate of population was this : 
 New Hampshire, 200,000; Massachusetts, 362,000; 
 Ehode Island, 58,000; Connecticut, 202,000; New 
 York, 238,000 ; New Jersey, 138,000 ; Pennsylvania, 
 341,000; Delaware, 37,000; Maryland, 174,000; Vir- 
 ginia, 300,000; North Carolina, 181,000; South Caro- 
 lina, 93,000 ; Georgia (unrepresented at the date of 
 this estimate), 27,000 : total, 2,243,000. Add 500,000 
 slaves, and the ultimate was 2,743,000. It was upon 
 the basis of this estimate that all the taxes and ex- 
 penses of the war were distributed among. the states; 
 it was conjectural, of course, and although some of the 
 states complained that it was unequal, and Congress 
 recommended them to take efficient means to arrive at 
 a correct knowledge of the numbers of their inhabit- 
 ants, no enumeration was made. In 1782, however, 
 the authorities of New Hampshire caused a census of 
 the state to be taken, and found the actual population 
 to be but 82,000 souls.- 
 
 The bills authorized in June did not get into circu- 
 lation until August. They were received by the public 
 with great favour. They circulated at the par of gold ; 
 
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14 The Revolutionary Finances. 
 
 '' that the endangered liberties of America ought to be 
 defended, and that the credit of their paper was essen- 
 tial to a proper defence," were the opinions engraven 
 on the hearts of a great majority of the people. It 
 was a point of honour, and was considered as a part of 
 duty, to take the bills freely at their full value. While 
 the ministry of England were puzzling themselves for 
 new taxes and funds on which to raise their supplies, 
 Congress raised theirs by resolution."* 
 
 On the 29th of November following — estimates hav- 
 ing been made of the expenses already incurred, and 
 of those probable to accrue up to the 10th of June 
 1776, "in the defence of America," Congress resolved 
 tipon a further emission of three millions, upon the 
 same plan as of the issues authorized in June and July. 
 In calculating the estimates to June 1776, Congress 
 proceeded upon the expectation then prevailing, that 
 by that time a reconciliation would be effected with 
 the Crown, which, as the reader is entirely aware, did 
 not happen. 
 
 ^ Ramsay. 
 
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The 'Revolutionary FiTiances. 15 
 
 III. 
 
 February 17th, May 9th and 27th, July 22d, Au- 
 gust 13th, November 2d, and December 28th 1776, 
 additional emissions were ordered ; the aggregate for 
 the year being nineteen millions, and the whole emis- 
 sions to the 1st of January 1777, were twenty-five 
 millions. " The United States for a considerable time 
 derived as much benefit from this paper creation of 
 their own, though without any established funds for 
 its support or redemption, as would have resulted to 
 .them from the free gift of as many Mexican dollars. 
 But there was a point both in time and quantity be- 
 yond which this congressional alchemy ceased to ope- 
 rate. That time was about eighteen months from the 
 date of their first issue, and that quantity about twenty 
 millions of dollars."^ 
 
 2. But long before the expiration of the year, Con- 
 gress began to realize the importance of some other 
 means of financial supply than continued emissions of 
 paper dollars. Though the bills were not actually 
 depreciated, they began to be seriously discredited at 
 a period not long subsequent to the " Declaration of 
 Independence." That act had wrought a radical change 
 in the objects of the war, and was certain indefinitely 
 to prolong it, and just as certain indefinitely to increase 
 
 ^ Bamsat. 
 
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16 The Revolutionary Firmnces. 
 
 the expenditures. It began to be widely apprehended 
 that the cost of liberty is something more than vigi- 
 lance ; it is a considerable percentage of the income of 
 the people. A good many whigs, even in those days of 
 patriotism and sacrifice, were almost as anxious about 
 their pocket-books as they were about their liberties, 
 and realized — as men in these degenerate days do — 
 that liberty without money is like a nobleman without 
 an estate, — the mere shadow of a lord. They received 
 the bills with some reluctance, and paid them out as 
 promptly as was consistent with a respectable regard 
 for the cause. Gold and silver disappeared, and prices 
 advanced, which is but another way of saying that 
 the circulation is superabundant,, or is in bad credit, or 
 both. " The stock of hard money which we possessed 
 in an ample degree at the beginning of the war, soon 
 flowed into Europe for supplies of arms, ammunition, 
 and other necessaries, which we were not in the habit 
 of manufacturing for ourselves. The produce of our 
 soil, attempted to be carried in our own bottoms to 
 Europe, fell — two-thirds of it — into the hands of our 
 enemies, who were masters of the sea ; the other third 
 illy sufficed to procure the necessary implements of 
 war, so that no returns of money supplied the place 
 of that which had gone off". A paper medium com- 
 pleted the exile of the hard money ; in the later stages 
 of the war we were, for years together, without seeing 
 a single coin of the precious metals in circulation."' 
 Contractors were multiplying, and those persons who 
 
 ' Thouas Jefferson. 
 
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The Revolutionary Finances. 17 
 
 do all sorts of, chores for the public and are paid in 
 commissions, were far more numerous in Revolution- 
 ary days than now; seeing that almost the whole 
 purchases of supplies for the armies were made upon 
 commission, and the percentages allowed were more 
 than liberal — they were extravagant. " What shall I 
 say," asked a curious and indignant observer, in a com- 
 munication to one of the newspapers,' "what shall 
 I say of the commissions allowed to quartermasters 
 and commissaries, with their hosts of deputies ? I am 
 far from impeaching every man who handles public 
 money, but look into every county in this and the 
 neighbouring states, and see the change in the man- 
 ners of the deputies in the staff departments. Come 
 with me to a public sale. The man of ancient patri- 
 monial estate is outbid for everything by an assistant- 
 deputy quartermaster's clerk ! See him lay down his 
 — I retract the word — your tens of thousands for a 
 farm. There is no end to his purchases. And unless 
 you put an end to the amazing perquisites of your 
 staff officers"-^many of whom, the writer alleged, were 
 taken out of the billiard-rooms — " I expect in a -few 
 years to see the delegates in Congress tenants of their 
 own quartermasters and commissaries !" Briefly, then, 
 resuming our narrative, the more sagacious began 
 clearly to forecast the future, and to prepare for it. 
 But,— 
 
 3. Congress dealt with these people as summarily 
 as they knew how, or as they had power to deal with 
 
 ' " PennsyWania Packet." 
 
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18 The Revolutionary Finances. 
 
 them, for in those days states' rights were things and 
 not words; in very truth the states had so many 
 rights they did not know exactly what to do with 
 them all; still they preferred keeping to delegating 
 them, and suffered countless present ills rather than 
 submit to others that might be worse : so Congress, 
 limited, and one might say almost shackled, could 
 only indulge a sort of political excommunication — 
 not upon admitted authority, however — but a very 
 powerful and effective kind of excommunication after 
 all. "Any person who shall hereafter be so lost to all 
 virtue and regard for his country as to refuse the bills 
 .or obstruct and discourage their currency or circula- 
 tioii, shall be deemed, published and treated as an 
 enemy of the country, and precluded from all trade 
 and intercourse with its inhabitants."^ Concerning 
 which we shall see more hereafter. 
 
 4. Congress had no power to tax'; but seeing that 
 something had to be done besides emitting bills and 
 excommunicating infidels who did not believe them 
 the equal of cash, a loan was proposed. [October 3d 
 1776] of five millions of dollars. This was no inter- 
 ference with the rights of the states — a beggar may 
 borrow if any one be willing to lend. Interest at four 
 per cent, per annum was offered, and for the conve- 
 nience of lenders, loan offices were to be established 
 in the several colonies, to be in the charge and keeping 
 of commissioners selected by the local authorities, 
 for Congress did not feel authorized to designate even 
 such officers. The commissioners were to have one- 
 
 ' Resolution of Congress, January 11th 1776. 
 
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The Revolutionary Finances. 19 
 
 ■eighth of one per cent, upon the whole sums brought 
 into their respective offices, in heu of all other claims 
 a,nd demands for transacting the loan business ; not . a 
 very lucrative compensation, seeing how small the 
 receipts were and the money seriously depreciated. 
 This was the beginning of the loan-office system. The 
 eertificates of loans were to be of the denominations 
 of three hundred, four hundred, five hundred, six 
 hundred and one thousand dollars ; and Congress, with 
 a characteristic attention to details, directed not only 
 the devices which were to be engraved upon them but 
 also the colours in which they were to be printed. 
 OouvERNEup Morris alleges that these certificates on 
 their first appearance were in less repute than the bills 
 of credit, " for causes not necessary to be mentioned, 
 as they are fresh in everybody's memory." ' It was 
 hoped and expected by Congress that as the certifi- 
 cates bore interest they would absorb the bills and be 
 hoarded. The result was otherwise. Being made 
 payable to bearer, they were not only transferable but 
 actually were transferred from hand to hand, and in- 
 stead of checking or diminishing the depreciation, 
 largely contributed to promote it. 
 
 5. Lotteries 'in the revolutionary age were not in 
 the disrepute which attaches to them in this generation ; 
 and even if they had been, it is quite likely Congress 
 would have resorted to one if it had promised any 
 considerable results. At any rate a scheme of much 
 magnitude was framed, and a good deal of time and 
 attention were devoted to it.- It dragged its slow 
 
 ' " Pennsylvania Packet," April 11th 1781. 
 
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20 The Revolutionary Finances. 
 
 length along through several years, and was substan- 
 tially a failure, though a good many people, ambitious 
 of sudden and accidental fortune, bought tickets. The 
 lottery certificates were among the transferable securi- 
 ties of the times. 
 
 6. The states separately emitted large quantities 
 of bills of credit. As they swelled the volume of the 
 circulation, and were in as good repute — being based 
 upon substantially the same security — as the conti- 
 nental bills, they were potent in hurrying on the dis- 
 credit and then the depreciation of the whole mass of 
 the currency. Against these emissions Congress, in 
 future years, appealed fervently and vainly. Though 
 the state assemblies had power to tax, taxes were 
 unpopular; and if there is anything in the world an 
 American legislator h'olds in abhorrence, it is personal 
 or political unpopularity. So the states didn't tax, 
 but they printed with unflagging vigour. Private 
 persons, seeing the mania for paper money, issued 
 circulating notes ; and some of these were quite as 
 good and some of them were a good deal better than 
 the bills either of the state governments or of Con- 
 gress, but .they were prohibited under severe penalties. 
 The counterfeiters were active, and their issues became 
 a wide-spread and formidable evil. The English govern- 
 ment — which seems to have a mania for counterfeiting 
 the paper money of its enemies — entered into compe- 
 tition with private criminals in this highly civilized 
 way of carrying on the war. 
 
 7. In this place it may be as well to advert to the 
 probable amount of the issues of the states. It is im- 
 possible accurately to state their amount; Thomas 
 
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The Revolutionary Finances. 21 
 
 Jefferson estimated them at two hundred millions, 
 an estimate which the table in the appendix showp to 
 be very near the truth j and the circulating value of 
 the state bills was, in general,«neither greater nor less 
 than that of the Continental emissions. 
 
 8. The whole issues of Congress, from June 1775 
 to January 1st 1777, aggregated twenty-five millions 
 of dollars, and their purchasing power, during the 
 campaigns of '75 and '76, was equivalent to that of 
 •specie, though, in consequence of the great abundance 
 ■of paper, prices had steadily advanced. 
 
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22 The Revolutwnary Fvrumces. 
 
 IV. 
 
 The beginning of 1777 found the bills at an open 
 discount of not less than one hundred per cent. 
 Notwithstanding the declaration of Congress, that 
 " they ought to pass current in all payments and deal- 
 ings, and be deemed equal in value to the Spanish- 
 milled dollars," their credit was steadily downward. 
 " The continental money," said the resolutions of 
 Congress on the subject (dated January 14th 1777), 
 " ought to be supported at the full value expressed in 
 the respective bills, by the people of the states, who 
 stand bound to redeem them according to the like 
 value, and also to guard against the artifices of 
 the enemies of liberty, who impair the credit of the 
 bills hy raising the nominal value of gold and silver." 
 At the same time, as a remedy for the depreciation, the 
 state legislatures were recommended to pass laws in- 
 flicting penalties and forfeitures upon persons who sold 
 their land sand merchandises for continental bills rated 
 at a specie value, and to make them a lawful tender 
 in the payment of both public and private debts ; debts 
 payable in sterling money to be discharged with conti- 
 nental dollars at 4«. &d. sterling per dollar (that is to 
 say, at par), and in discharge of all other debts and 
 contracts to pass as the equivalent of the Spanish milled 
 dollar, a refusal of the bills at these alleged values to 
 
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The Revolutionary Finances. 23 
 
 operate as an extinguishment of the debt. To these 
 appeals the states responded, with what effect will be 
 hereafter seen. 
 
 2. The campaign of 1777 was conducted with paper 
 money, and was not seriously affected by its decreased 
 and fluctuating value. At the beginning of the year 
 two paper dollars were equal to one hard dollar, and 
 in December one hard dollar was worth four paper 
 ones. The emissions authorized in the mean time 
 were thirteen millions, worth at a cash valuation about 
 three millions. A great quantity of counterfeits were 
 put into circulation ; this evil became so great that it 
 was found necessary at a later period officially to with- 
 draw from circulation two of the continental emissions, 
 amounting in the aggregate to ten millions of dollars. 
 
 3. Congress, with an earnestness almost pathetic, 
 appealed to the legislatures not only to refrain from 
 further local issues of bills, but to call in and cancel 
 those already emitted ; they were urged to take mea- 
 sures for the limitation of prices, and to authorize the 
 seizure of supplies in the hands of forestallers and 
 engrossers and pay for them at fixed rates, and to tax 
 their people. Taxes to. the amount of five millions, to 
 be raised during the year 1778, were allotted among 
 the states : New Hampshire was called upon for 
 1200,000; Rhode Island for $100,000; Massachu- * 
 setts, $820,000; Connecticut, $600,000; New York, 
 $200,000; New Jersey, $270,000; Pennsylvania, 
 $620,000; Delaware, $60,000; Maryland, $520,000; 
 North Carolina, $250,000; South Carolina, $500,000; 
 Georgia, $60,000. Hitherto, said the address of Con- 
 gress to the legislatures, " we have not burdened our 
 
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24 The Revolutionary Finances. 
 
 fellow-citizens with taxes, but have raised the necessary- 
 supplies on the public faith ; and the same method has 
 been embraced b}' the respective states to answer their 
 internal wants. The currency is by these expedients 
 multiplied beyond good policy, and its comparative 
 value is proportionately reduced. To this cause, con- 
 spiring with the arts of open and secret enemies — the 
 shameful avidity of professed friends and scarcity of 
 foreign commodities— are we to ascribe the deprecia- 
 tion of our currency. The consequences to be appre- 
 hended are equally obvious and alarming; they tend 
 to the depravity of morals, the decay of public virtue, 
 a precarious supply for the war, debasement of the 
 public faith, injustice to ihdividuals, and the destruc- 
 tion of the honour, safety and independence of the 
 United States." Hitherto spared from taxes, the 
 people were now called upon, " with cheerful hearts 
 to contribute according to their circumstances." But 
 the sums set down against the respective states were 
 not to be considered as their real proportions, but 
 being paid into the common treasury were to be 
 placed to their credit, and interest allowed at the rate 
 of six per centum per annum. 
 
 4. Signal advantages — so Congress said — having 
 been derived from the establishment of the continental 
 loan offices, it was recommended, at the same time, 
 that the system be further extended by the opening 
 of subscriptions in all the towns, counties and districts 
 of the several states. 
 
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The Revolutionary Finwrnes. 25 
 
 V. 
 
 Seeing with extreme and just alarm the public 
 and extensive depreciation of the currency, Congress 
 and the people, at the beginning of 17,77, cast about 
 for prompt and efficient remedies. We have already 
 seen the declaration of Congress in January 1776, 
 that persons refusing the bills should be treated as 
 public enemies, and that at the period of which we 
 are now writing penal laws were recommended against 
 those who made a discrimination against the conti- 
 nental currency. Excommunication not having been 
 sufficiently effective, it was now determined to proceed 
 to punishment. 
 
 2. " The? fatal error that the credit and currency of 
 the continental money could be kept up and supported 
 by acts of compulsion, entered so deep into the mind 
 of Congress and of all departments of administration 
 through the states, that no considerations of justice, 
 religion or policy, or even experience of its utter ineffi- 
 cacy, could eradicate it ; it seemed to be a kind of ob- 
 stinate delirium, totally deaf to every argument drawn 
 from justice and right, from its natural tendency and 
 mischief, from common sense and even common safety. 
 Congress began, .as early as 11th January 1776, to 
 hold up and recommend that maxim of maniaism, 
 when continental money was but five months old. 
 Congress then resolved that whoever should refuse to 
 
 receive in payment the continental bills, should be 
 • 
 
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26 The Revolutionary Finances. 
 
 deemed and treated as an enemy of his country, and 
 be precluded from all trade and intercourse with the 
 inhabitants; i. e. should be outlawed — which is the 
 severest penalty (except life and limb) known to our 
 laws. This ruinous principle continued in practice for 
 five successive years, and appeared in all shapes and 
 forms, in tender acts, in limitations of prices, in awfiil 
 and threatening declarations, in penal laws with dread- 
 ful and ruinous punishments, and in every other way 
 that could be 'devised; and all executed with a relent- 
 less severity by the highest authorities then in being, 
 to wit : by Congress, by assemblies and conventions of 
 the states, by committees of inspection (whose powers 
 were in those days nearly sovereign), and even by 
 military force; and though men of all descriptions 
 stood trembling before this monster without daring to 
 lift a hand against it, yet its unrestrained energy was 
 ever found ineffectual to its purposes, but in every 
 instance increased the evils it was designed to remedy, 
 and destroyed the benefits it was intended to promote ; 
 at best its utmost effect- was like that of water sprinkled 
 upon a blacksmith's forge, which indeed deadens the 
 flame, but never fails to increase the heat and force of 
 the internal fire. Many thousand families, of full and 
 easy fortunes, were ruined by these fatal measures, 
 and lie in ruins to this day, without the least benefit 
 to the country, or to the great cause in which we were 
 then engaged-^'' But others, perhaps as competent 
 to judge, thought the tender and limitation laws the 
 efficient instruments that saved the country. And 
 who shall say these were not the true prophets ? Un- 
 
 ' Pblatiah Webster: Essay printed in 1790. 
 
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The Revolutionary Finances. 27 
 
 doubtedly those laws were cruel in spirit and execu- 
 tion; less rigorous and distressing remedies might 
 have been equally potent in curing the evils ; we can- 
 not say, for they were not tried, or being attempted, 
 were found impracticable of execution. What is cer- 
 tain is, that while the tender and limitation acts did 
 not and could not completely prevail against the inex- 
 orable laws of traffic, they were very powerful in their 
 eflfects, and for some brief time, at any rate, preserved 
 a degree of credit for the bills even after they were, 
 utterly valueless. Now, nothing less than this can 
 truly be said. ' And when one reads the history of 
 those disastrous and most distressful days, — when tories 
 and savages from over the sea, as well as savages from 
 the wilds and jungles of America, were joined toge- 
 ther in despoiling and desolating the country, when 
 counterfeiting and lying were adde4 by our enemies to 
 their swords and rifles as means of war upon our an- 
 cestors : now TOTT, sitting — so to speak, but metaphor- 
 ically only of course — under your own vine and fig- 
 tree, with none to molest or make you afraid ; Mill, 
 RiCAEDO and Amasa Walker (wise, all of them, in 
 their day and generation, but none of them there pre- 
 sent to partake in the calamities and griefs of the war), 
 sayinjg sag6 judicial things and impressing you with 
 thfe' soundness of their philosophy on the currency 
 question, — recall the fear and distress of the people, of 
 America in those days of trial, their poverty, loss of 
 trade, homes destroyed, fields and farms laid waste, 
 open enemies assailing them with arms, and secret, 
 insidious and unscrupulous enemies lying in wait for 
 them at their very doors ; recall all these surroundings 
 
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28 The Revolutionary Finances. 
 
 of danger and difficulty, and if you be a financier, — 
 and no doubt you are, — heaven forefend that anything 
 here said should imply a suspicion to the contrary, — 
 after all, what could have been done other than what 
 was done ? The fathers, driven to extremity, resorted 
 to those measures which promised the most immediate 
 and certain relief. The intrinsic error was in the use 
 of paper money ; for true it is that paper money being 
 in the nature of evil, its use must ever be attended 
 with abuse ; and while nobody doubts the vast influ- 
 ence it has exerted in modifying the whole structure 
 of modern society, and the powerful effective instru- 
 ment it has been in the creation of material wealth, 
 the untold suffering it has inflicted upon people of all 
 ranks and donditions in every coantry in which it has 
 been used, is not at all compensated by the good it 
 has wrought, if indeed it has wrought any. 
 
 3. The fathers of the republic, being reduced then 
 to the necessity of emitting paper money, notwith- 
 standing the evils that followed in its track,, were 
 bound to use every means to support its credit. All 
 considerations other than The Safety of the State 
 must of necessity give way. Public and private jus- 
 tice were sacriflced; corruption of manners, extrava- 
 gance, improvidence, disgraceful habits of suspicion, 
 espionage and cheating, were introduced among a 
 really virtuous people. 
 
 4. The first of the pernicious system of laws which 
 Webster condemned so trenchantly were those making 
 the bills a legal tender in payment of debts. Congress 
 recommended the states to do this, and Rhode Island 
 led off in August 1775 in doing it. The other states, 
 
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The Revolutionary Finances. 2^ 
 
 one by one, did the same, and all attached severe 
 penalties for refusing the money at its nominal value- 
 So long as the bills remained at par, but little mischief 
 'resulted; whefl they were in course of depreciation 
 great evils and hardships followed. A well-known 
 historian has described the general operation of the 
 continuously-enlarging volume of paper, and at the 
 same time the legal tender. The possessors of the 
 bills, he says, who either from sagacity or accident 
 conjectured rightly as to their ultimate fate, or finding 
 that they daily lost a part of their value, vpere perpetu- 
 ally in quest of bargains. As they knew that Congress 
 must make further emissions to supply the armies, 
 they concluded that it- would be better to purchase up 
 property of any kind than to lay up their money, 
 while the deceitful sound of large nominal sums 
 tempted many possessors of real property to sell, some 
 of them opulent persons of ancient family ; and on the 
 other hand, again, some hoarded up the bills in prefer- 
 ence to buying solid property at supposed extravagant 
 prices. SVCany bold speculators made fortunes by run- 
 ning in debt beyond their present p,bilities, and paid 
 their debts in a depreciating currency ; the merchants 
 and moneyed men were great losers by the legal ten- 
 der. It changed the nature of obligations so far that 
 he was counted an honest man who on principle de- 
 layed to pay his debts. It disposed thpse who were 
 losers by the legal tender, and who preferred their 
 money to the liberties of America, to wish for a re-es- 
 tablishment of British government, and filled others 
 with murmurings and bitter complaints against the 
 ruling powers. The public-spirited, who were sincere 
 
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30 The Revolutionary Finances. 
 
 in their declarations of devoting life and fortune to 
 the cause of their co'untry, patiently submitted to their 
 hardships from a conviction that the cause of liberty 
 required the sacrifice.' 
 
 All classes were infected. The paper produced a 
 rage for speculation. The mechanic, the farmer, the 
 lawyer, physician, members of Congress, and in some 
 places even a few of the clergy, were contaminated. 
 The/ morals of the people were corrupted beyond any- 
 thing that could have been believed prior to the event. 
 All ties of honour, blood, gratitude, humanity and 
 justice were dissolved. Old debts were paid when 
 the paper money was more than seventj' for one. 
 Brothers defrauded brothers, children their parents 
 and parents their children. Widows, orphans and 
 others were paid for money lent in specie with depre- 
 ciated paper, and were compelled to receive it.^ 
 
 That the helpless part of the community were legis- 
 latively deprived of their property ,was among the 
 lesser evils which resulted from the legal tender of the 
 depreciated bills of credit. The iniquity of *the laws 
 estranged the minds of many citizens from the habits 
 and love of justice. The mounds which government 
 had erected to secure the observance of honesty in the 
 commercial intercourse of man with man were broken 
 down. Truth, honour and justice were swept away' 
 by the overwhelming deluge of legal iniquity.^ 
 
 The tender laws were substantially the same in all 
 the states ; and their vital principle was, that a tender 
 
 ' Rahsav: " riistory.of South Carolina." 
 
 ' Gordon : " History of the War of the American Revolution." 
 
 ' Rahsay : " History of the American Revolution." 
 
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The Revolutionary Finances. 31 
 
 *of the bills, whether accepted or refused, equally 
 worked an extinguishment of the debt. They were 
 repealed in the early part of the year 1781; but to 
 the very last, and in despite of the known misery and 
 injustice wrought by them, they had warm and per- 
 sistent advocates — they had been revised during the 
 spring of 1780 to conform them to the " forty-for-one" 
 scheme of Congress of March 18th of that year, 
 though at the very moment of revision the deprecia- 
 tion was ten to twenty-fold in excess of the rate fixed 
 by law ; but in Maryland, and perhaps in other states, 
 contracts to be discharged in gold and silver were 
 made lawful, which in some measure at any rate 
 relieved the people. 
 
 It may be observed here : it seems impossible to 
 ■doubt indeed — that the framers of the constitution 
 from personal knowledge aware of the intrinsic vicious- 
 ness of legal tender paper, intended to prevent its use 
 by constitutional prohibition.^ 
 
 ' The debate in the Federal Convention is here cited in support of 
 this observation : 
 
 Mr. GouTERNEUR MoRRis moved to strike out " and emit bills on 
 the credit of the United States." If the United States had credit such 
 bills would be unnecessary ; if they had not, unjust and useless. 
 
 Mr. Butler seconds the motion. 
 
 Mr. Madison : Will it not be sufficient to prohibit the making them a 
 temler? This will remove the temptation to emit them with unjust 
 views. And promissory notes in that shape may in some emergencies 
 be best. 
 
 Mr. GouvERNEUR Morris : Striting out the words will leave room 
 still for the notes of a responsible minister, which will do all the good 
 without the mischief. The moneyed interest will oppose the plan of 
 government if paper emissions be not prohibited. 
 
 Mr. GoRHAM was for striking out without inserting any prohibition. 
 If the words stand they may suggest and lead to the measure. 
 
 3 
 
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32 The Revolutionary Fitiances. 
 
 5. The second of the system of laws for supporting- 
 the value, or more properly the purchasing power of 
 
 Mr. Mason had doubts on the subject. Congress, he thought, would 
 not have the power unless it were expressed — though he had a mortal 
 hatred to paper money, yet as he could not foresee all emergencies, he 
 was unwilling to tie the hands of the legislature. He observed that the 
 late war could not have been carried on had such a prohibition existed. 
 
 Mr. GoRHAM : The power, as far as it will be safe or necessary, is 
 involved in that of borrowing. 
 
 Mr. Mercer was a friend to paper money, though in the present state 
 and temper of America he should neither propose nor approve of such 
 a measyre. He was consequently opposed to a prohibition of it alto- 
 gether. It will stamp suspicion on the government to deny it a discre- 
 tion on this point. It was impolitic also to excite the opposition of all 
 those who were friends to paper money. The people of property would 
 be sure to be on the side of the plan, and it was impolitic to purchase 
 their further attachment with the loss of the opposite class of citizens. 
 
 Mr.' Ellsworth thought this a favourable moment to shut and bar the 
 door against paper momey. The mischiefs of the various experiments 
 which had been made were now fresh in the public mind, and had 
 excited the disgust of all the respectable part of America. By with- 
 holding the power from the new government, more influence would be 
 gained to it than by almost anything else. Paper money can in no case 
 be necessary. Give the government credit and other resources will 
 follow. The power may do harm — never good. 
 
 Mr. Randolph, notwithstanding his antipathy to paper money, could 
 not agree to strike out the words, as he could not foresee all the occa- 
 sions that might arise. 
 
 Mr. Wilson : It will have a most salutary influence on the credit of 
 the United States to remove all possibility of paper money. This expe- 
 dient can never succeed whilst its mischiefs are remembered ; and as 
 long as it can be resorted to, it will be a bar to other resources. 
 
 Mr. Butler remarked that paper was a legal tender in no country in 
 Europe. He was urgent for disarming the government of such a power. 
 
 Mr. Mason was still averse to tying the hands of the legislature 
 altogether. If there was no example in Europe, as just remarked, it 
 might be observed, on the other side, that there was none in which the 
 government was restrained on this head. 
 
 Mr. Reed thought the words if not struck out would be as alarming' 
 as the mark of the Beast in Revelation. 
 
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The Revolutionary Finances. 33 
 
 the bills, were those for the limitation of prices. The 
 deluge — for it could be called nothing else — of paper 
 money which flooded the country, steadily and rapidly 
 raised the prices of commodities of every kind. The 
 rise was attended by embarrassing fluctuations; they 
 made the poor poorer, if they did not make the rich 
 richer, as indeed in many cases they did. The people, 
 feeling the pressure constantly grow greater, with the 
 income of this week able to purchase less than with 
 the income of the last week, and this constantly recur- 
 ring, became restless, impatient, clamorous and even 
 threatening. They were not political economists, and 
 could not trace the trouble to its real source, but natu- 
 rally enough charged it upon forestallers, engrossers 
 and the tories. Having arrived at this conclusion — 
 and there were bulls and speculators, forestallers, en- 
 grossers and " withholders" in those days — rthey cast 
 about for a remedy. If prices could be kept down the 
 trouble would be prevented, — anybody could see that 
 Why not limit prices, then ? This idea seems to have 
 originated in New England ; and Congress, impressed 
 with a belief that limitations would be effective in sus- 
 taining the bills, seized upon the New England idea, 
 
 Mr. Langdon had rather reject the whole plan than retain the three 
 words, " and emit bills." 
 
 Nine states voted to strike out ; two states to retain. Virginia voted 
 in the affirmative, and in explanation of his vote with his state Mr. 
 Madison appends a note, thus : " The vote in the afEirmative by Virginia 
 was occasioned by the acquiescence of Mr. Madison, who became satis- 
 fied that striking out the words would not disable the government from 
 the use of public notes, as far a# they could be safe and proper ; and 
 would only cut off the pretext for a, paper currency, and particularly for 
 making the bills a tender either for public or private debts." — See 
 Madison Papers, iii. 1343, 1344, 1345, 1346. 
 
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34 The Revolutionary Finances. 
 
 and recommended it to the states [November 22d 
 1777], for their immediate adoption, and renewed it 
 in respect of various details during the ensuing two 
 years. Apply the regulations, said Congress in sub- 
 stance, to the prices of labour, to manufactures,^ internal 
 produce and imported commodities,' to the charges of 
 innkeepers and to land and water carriage : limit the 
 number of retailers in the counties, and make them 
 take out licenses to observe the laws made for their 
 regulation ; let such persons as have no licenses be 
 restrained from purchasing greater quantities of cloth- 
 ing and provisions than are necessary for family use, — 
 and upon oflFenders against these laws let such penal- 
 ties be inflicted as will brand them with indelible infamy I 
 Seize and forfeit the stores of forestallers, engrossers 
 and withholders ; seize the supplies also of any per- 
 sons who have larger quantities of commodities than 
 are competent for the private annual consumption of 
 their families ; and pay such prices as you shall think 
 proper. The excessive spirit of sharping and extor- 
 tion was to be put down most certainly. " We are 
 convinced," said Congress in January 1779, "that there 
 is not so much diligence used in detecting and reform- 
 ing abuses as in committing and complaining of them !" 
 And later in the same year — November — Congress de- 
 •4clared that the fluctuating state of prices not only 
 ^caused inequality and injustice in private dealings and 
 in procuring the public supplies, but rendered it im- 
 practicable to make proper estimates for future ex- 
 penses, and to fix equitabl/ the salaries of employees 
 , of the United States ; that as the estimates upon which 
 
 ' Military atores to be oxoopted, however. 
 
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The Revolutionary Finances. 35 
 
 the requisitions for taxes upon the states were based 
 proceeded upon the principle that the prices of com- 
 modities necessary for the public use should not exceed 
 twenty-fold of the former prices, it was urged upon 
 the states to enact laws for a general limitation in ac- 
 cordance therewith : that is to say, upon the principle 
 •of an advance of twenty-fold above the prices current 
 through the various seasons of the year 1774. Accord- 
 ing to Thomas Jefferson's table the depreciation at 
 the time these recommendations were made was thirty- 
 eight for one. In order to hasten action, it was de- 
 clared that those states failing to enact laws upon this 
 principle before February 1st 1780, should be charged 
 in the public accounts with the aggregate amount of 
 the difference between prices paid from and after the 
 1st of February next in such states and those paid in 
 states enacting the laws. 
 
 Some idea of the prevailing feeling of the people in 
 relation to forestallers and engrossers may be gathered 
 from the expressions of Washington on the subject. 
 " Certain I am," he said, " that unless extortion, fore- 
 stalling and other practices, which have crept in and 
 become prevalent and injurious to the common cause, 
 can meet with proper checks, we must inevitably sink 
 under the load of accumulated oppression. To make 
 and extort money in every shape that can be devised, 
 and at the same time decry the value (of the paper 
 money), seems to have become a "mere business and 
 epidemical disease, calling for the interposition of 
 every good man and body of men." To President 
 Reed he wrote : " It is most devoutly to be wished 
 that some happy expedient could be hit upon to 
 
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36 The Revolutionary Finances. 
 
 restore the credit of our paper emissions, and punish 
 the infamous practice of forestalling and engrossing 
 such articles as are essentially necessary to the very 
 existence of the army." 
 
 It was in 1779 and 1780 that the popular excite- 
 ment in relation to the limitation laws and the " nefa- 
 rious practices of forestallers and engrossers" was at 
 at its wildest. Public meetings were held in the 
 different cities and towns, and violent penalties and 
 denunciations — in addition to the legal penalties and 
 forfeitures provided by the states in pursuance of 
 the recommendations of Congress — were denounced 
 against offenders. Not only were offenders denounced ; 
 they were also punished in property and person.' It 
 is enough to say — as Mr. Webster truly observes — 
 that the local committees of safety and inspection 
 exercised almost sovereign powers. Their decrees 
 were rigorously executed, but notwithstanding the 
 
 ' " Bid the community of the monopolizers and extortioners who, like 
 canker worms, are gnavnng upon your vitals. They are reducing the 
 currency to waste paper by refusing to take it for many articles. We 
 have borne with such wretches, but will hear no longer. Public examples 
 are public benefits I You then that have articles to sell, lower your 
 prices; you that have houses to let, refuse not the currency for rent; for, 
 inspired with the spirit of those heroes and patriots who have' struggled 
 and bled for their country, and moved with the cries and distresses of the 
 widow, the orphan and the necessitous, Boston shall no longer be tour 
 place of security !" — From a broadside poster, Boston, June 16th 1779. 
 It contained also a caution — " Lawyers, keep yourselves to yourselves." 
 A second broadside about the same time contained these words : " THE 
 CRISIS 1 Remember that the old spirit of opposition to the stamp act 
 that first originated at Boston and sounded the alarm through the con- 
 tinent, is not yet smothered, but shall soon burst with an unabating 
 vengeance on the heads of monopolizers as it did on the odious stamp 
 masters. Br Heavens it shall not die 1" 
 
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The Revolutionary Finances. S7 
 
 ■violence and stringency of the measures of repression, 
 the depreciation pursued its inflexible course, though 
 doubtless measurably restrained. 
 
 6. Partaking of the character of the limitation laws 
 were those laying embargoes upon the exportation of 
 grains and provisions. Congress alleged that such 
 •exportations occasioned serious difiiculties in procuring 
 supplies for the army, and by the capture of exporting 
 vessels by British ships relieved the enemy from dis- 
 tresses that would greatly have embarrassed his opera- 
 tions. Declaring it absolutely necessary, therefore, that 
 an embargo be immediately laicj, and unwilling to 
 await the action of the state legislatures — some of 
 them distant from Congress, and assembling at differ- 
 ent periods — lest the purposes of the embargor should 
 be frustrated, Congress proceeded to lay a prohibition 
 upon the exportation of wheat, corn, beef, pork, live- 
 stock and other provisions, and recommended the states 
 to enforce it with the necessary regulations. This was 
 on the 8th of June 1778, and the embargo was to con- 
 tinue in force till the 15th of the following November. 
 On the 2d of September Congress so far modified the 
 prohibition as to allow provisions to be exported from 
 Pennsylvania .and the states south of Pennsylvania 
 to eastern ports, for the use of the people of the 
 Eastern States, but this permission having led to fraud- 
 ulent clearances, on the 2d of October the states were 
 recommended to grant no exemptions from the general 
 operation of the laws, unless the shipper and every 
 seaman and passenger on the vessel should solemnly 
 ewear, without any mental reservation or equivoca- 
 tion, that neither directly nor indirectly were they 
 
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38 The Revolutionary Finances. 
 
 concerned in any measure whatever that might tend 
 to prevent the arrival of the vessel in the eastern port 
 of destination, and the shipper was required also to 
 agree before departure upon the price at which the 
 flour or grain was to be delivered. Congress continued 
 the prohibition from time to time, and the states aided 
 by enacting the laws necessary to carry it into execu- 
 tion. 
 
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Revolutionary Finances. 39 
 
 VI. 
 
 Now, touching the confiscation acts ' of the several 
 states, it may as well be stated here as elsewhere 
 that at various periods during the war, acts were 
 passed by all of them to confiscate and sell, to se- 
 quester, take possession of and lease the estates , of 
 the loyalists — that is to say, of the tories — and to apply 
 the proceeds towards the redemption of certificates 
 and bills of credit, or towards defraying the expenses 
 of the war ; to enable debtors to pay into the state 
 treasuries or loan offices paper money in discharge of 
 their debts to British and tory creditors. Under some 
 of these laws many, individuals were attainted by 
 name, others were banished for ever from the country, 
 and if found within the state were declared felons 
 without benefit of clergy. In some states the estates 
 and rights of married women, of widows and minors, 
 and of persons who had died within the territories 
 possessed by the British arms, were forfeited. Autho- 
 
 ^ The operation of the confiscation and tender laws was thus described 
 by Daniel Dulaney, a citizen of London and a subject of the British 
 Crown, and a refugee. He was the residuary legatee of Ann Taskeb, 
 who died at Annapolis, Maryland, in 1775, and the sum of Ann Taskbr's 
 property, after paying other legatees, which belonged to Daniel Dcla- 
 NET, amounted to about £14,000 sterling, chiefly in outstanding debts 
 due the estate. Daniel Dulaney had other property in Maryland, the 
 whole of which, including Ann Taskbk's legacy, was confiscated by act 
 of the legislature, and sold for the benefit of the state, to the amount of 
 
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40 Revolutionary Fivmnces. 
 
 rity was given to the executive departments to require 
 persons who adhered to the Crown to surrender them- 
 selves by a given day and abide trials for high treason ; 
 in failure of which the parties so required were attaint- 
 ed, were subject to and suffered all the pains, penalties 
 and forfeitures awarded against persons convicted of 
 high treason. In New York a power was vested in 
 the courts to prefer bills of indictment against persons 
 alive or dead, who had adhered to the king or joined, 
 his fleets or armies; if in full life and reputed to hold 
 or claim, or if dead to have held or claimed at the 
 time of decease, real or personal estate. And upon 
 notice or neglect to appear and traverse the indic<> 
 
 upwards of £70,000 current money. By public acts of the provincial 
 convention and legislature, the executor of Ann Tasker (being the 
 father of Daniel Dulaney) was prohibited from bringing suits for the 
 recovery of the debts due to her estate ; but by an act passed in Febru- 
 ary 1777 bills of credit emitted by Congress and the state of Maryland 
 were made a legal tender in payment of all debts at the rate of 4«. 6d. 
 sterling per dollar, and a tender of such bills, whether accepted or 
 refused by the creditor, or his or her executor or administrator, not 
 only extinguished so much of the debt as was tendered, but the creditor 
 refusing to deliver up the evidence of the debt to be cancelled upon 
 demand, was thereby subject to have the same recovered upon an action 
 of trover, together with damages for the detention. Under this act very 
 large sums of legal tender paper money were tendered to the executor 
 of Ann Tasker by sundry debtors of her estate, and the executor, to 
 avoid the penalties he would have incurred under the law for refusing 
 to receive it, as well as to escape the public ignominy and popular ven- 
 geance he would otherwise have inevitably sustained, was compelled to 
 receive the paper at the rate of 4«. 6d!. sterling for each dollar, When in 
 fact it was worth but one-fifth of that sum ; and the executor being 
 compelled to make good to the other legatees their respective claims 
 upon the estate of Ann Tasker, the whole loss fell upon Daniel Dula- 
 ney, and amounted to about £10,000 sterling money of Great Britain ; 
 and Daniel Dulaney sought to recover the real value of the debts due 
 the estate of Ann Tasker and his other confiscated property, and suc- 
 ceeded in doing neither. — MSS. in Pa. Hist. Society. 
 
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The Revolutionary Finances. 41 
 
 nient, whether in full life or deceased, were respectively 
 declared guilty of the offences charged and their estates 
 forfeited, whether in possession, reversion or remainder. 
 In some of the states confiscated property was applied 
 to the purposes of public buildings and improvements; 
 in others it was appropriated as rewards to individuals / 
 for military services rendered during the war, and in 
 one instance, property mortgaged to a British creditor 
 was liberated from the encumbrance by a special act 
 of the legislature as a provision for the representatives 
 of the mortgagor, who had fallen in battle. Even after 
 the war, in some of the states, the confiscation laws 
 were acted upon, and new regulations made to carry 
 them into effect. The British government paid to the 
 loyalists about seventeen millions of dollars On account 
 of losses sustained by them in consequence of these 
 various enactments.^ 
 
 ' See the correspondence between Mr. Hammond, the British Minister, 
 and Mr. Jefferson, Secretary of State, during Washington's adminis- 
 tration, touching alleged failures in carrying out certain stipulations of 
 the Treaty of Peace between Great' Britain and the United States. — 
 American State Papers: Foreign Relations. 
 
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42 The Revolutmiary Fimmces. 
 
 VII. 
 
 While Congress was struggling at home with the 
 embarrassments always attending upon disordered 
 finances, the cause of America found powerful friends 
 and extensive helps among generous foreigners. 
 
 2. Let us recount these : 
 
 The efforts of Beaumarchais to engage his govern- 
 ment to aid the colonists began so early as 1774. His 
 versatile talents and indefatigable zeal were not with- 
 out their due effect upon the French King and his pru- 
 dent Minister of Foreign Affairs ; but the difficulty of 
 assisting the colonists without compromising the peace- 
 ful relations of England and France had indisposed 
 them to give or lend the colonists anything — but their 
 ears. Early in 1776, however, Beaumarchais devised 
 the commercial disguise through which the French 
 government might give aid and comfort to the enemies 
 of England without the risk of being treated as one 
 of the number. His project, the history of which fills 
 one of the most romantic pages in the chronicles of the 
 country, received the approval of Vergennes, and sud- 
 denly, like a shifting scene in one of his dramas, a 
 blazing sign proclaimed that the mysteriously-begotten 
 firm of Rodriguez, Hortaling & Co. had established 
 its headquarters in the Hotel d'Hollande, in Paris, and 
 the author of the " Marriage of Figaro," who never did 
 anything except in a grand way, was in less than a 
 
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The Revolutionary Finances. 43 
 
 year the most extensive shipping-merchant in Europe. 
 In the course of a few months, after he had brought 
 the King to his views, several ships loaded with what 
 the colonists most needed — cannon, mortars, shells, 
 cannon-balls, small-arms, nearly three hundred thou- 
 sand pounds of powder, and tents and clothing suffi- 
 cient for 25,000 men — were despatched to the United 
 States, to be in readiness for the approaching campaign 
 of 1777, which was expected in England to put an 
 end alike to the war and the callow young republic 
 that was fighting for its existence. Before the summer 
 of 1777, Beaumarchais was in advance for supplies to 
 Congress nearly a million of dollars, for which he had 
 counted upon prompt returns in tobacco and other 
 merchantable products of the country. Unhappily 
 the jealousy of Arthur Lee and the eccentricities of 
 Beaumarchais rendered his operations completely un- 
 intelligible to Congress. " Imagine," says De Lominie, 
 in his admirable Life of Beaumarchais, "imagine seri- 
 ous Yankees, who had nearly all been traders before 
 becoming soldiers, receiving cargo after cargo, which 
 were frequently embarked by stealth during the night, 
 and the invoices of which constantly presented some 
 irregularities, and all this without any other letters 
 of advice than the rather bombastic missives signed 
 with the romantic name of Eodriguez, Hortaling & Co., 
 in which Beaumarchais mixed protestations of. enthu- 
 siasm, offers of unlimited services and political advice, 
 with applications for tobacco, indigo or salt fish, and 
 indeed with tirades, of which we may take the follow- 
 ing as an example : Gentlemen, — Consider my home 
 as the head of all operations useful to your cause in 
 
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44 The Revolutionary Finances. 
 
 Europe, and myself as the most zealous partisan of 
 your nation, the soul of your successes, and a man 
 profowidly filled with the respectful esteem with which 
 I have the honour to he, etc., Rodriguez, Hoktalinq 
 & Co. — The calculating disposition of the Yankees 
 naturally inclined them to think that so ardent and 
 fantastic a being, — if after all such a being really ex- 
 isted, — was nothing but a commercial comedy agreed 
 upon between the French government and himself, 
 and that they might in all security of conscience use 
 of his supplies, read his amplifications, and dispense 
 with sending him tobacco." Which they did. Beatj- 
 MARCHAis received neither tobacco, nor thanks, nor 
 even a letter from Congress. His communications 
 remained unanswered, his funds and credit were ex- 
 hausted, and all his expectations of returns were dis- 
 appointed. Congress persisted in treating him as a 
 sort of Mrs. Harris, whose existence was more than 
 doubtful. At last reduced to extremities, he sent to 
 the United States a confidential agent, to obtain, if 
 possible, some explanation of results so chilling to his 
 enthusiasm, and for which he was so poorly prepared. 
 This agent made ardent efforts to effect a settlement 
 of the claims of his principal against the republic, 
 but ineffectually, and it was not until long after the 
 members of the Congress he had assisted, and Beau- 
 MARCHAis himself, had gone " where the wicked cease 
 from troubling and the weary are at rest," that his heirs 
 obtained a final settlement with our government.' Beau- 
 
 ' See " Beaumarohais, the Merchant," a lecture delivered by John 
 BioELow before the Historical Society of New York, and printed by 
 ScRiBNER 1871, from which this account of Beaumarohais is extracted. 
 
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The Revolutionary Finances. 45 
 
 MARCHAis's claim against the United States amounted 
 to 4,547,593 livres, approximating to one million of 
 dollars. A deduction of one million livres was made^ 
 and the remainder was paid ; and in 1835 his heirs 
 were allowed by the Congress of the United States a 
 further sum of eight hundred thousand francs. 
 
 3. Besides the assistance received through Beatj- 
 MARCHAis, the French government paid to the Ameri- 
 can commissioners in Paris, previous to the treaty of 
 1778, two millions of livres as a gratuity, and the 
 Farmers-General of France loaned them a million. 
 
 The aids received from France from the beginning 
 to the end of the war, besides men and ships, are 
 these: Previous to 1778, and including the loan of 
 the Farmers-General, '3,000,000 livres; in 1778 loan 
 3,000,000 livres; in 1779 loan 1,000,000 livres; in 
 1780 loan 4,000,000 livres; in 1781 loan 4,000,000 
 livres; subsidy 6,000,000 livres; loan in Holland 
 guaranteed by France 10,-000,000 livres (5,000,000 
 Dutch florins) ; in 1782 loan 6,000,000 livres ; and in 
 1783 loan 6,000,000 livres.' That is to gay, the 
 
 ' The six million livres borrowed in 1783 were advanced from the 
 royal treasury to ',' answer numerous urgent and indispensable expenses 
 in the course of the year." The contract made between the King of 
 France and the United States, on the 25th of February, contains thes& 
 words : " The Minister Plenipotentiary of the United States having 
 represented to the King the exhausted state to which the Americans 
 have been reduced by a long and disastrous war, His Majesty has taken 
 into consideration the request of the American Minister, in the name- 
 of the Congress of the United States, for a new advance of money to 
 answer numerous urgent and indispensable expenses in the course of 
 the present year, and notwithstanding the no less pressing necessities 
 of his own service, has determined to grant to Congress a new pecuniary 
 assistance, which he has fixed at the sum of six million livres tournois, 
 under the title of loan under the guarantee of the whole thirteen United 
 States." — See Journal of Congress for 1783. 
 
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46 The Revolutionary Finances. 
 
 French government assisted the United States to the 
 extent of 43,000,000 livres; 9,000,000 in the way of 
 subsidy, 24,000,000 by loans, and 10,000,000 by 
 guaranty— total, |7,962,962. The French loans car- 
 ried interest at the rate of five per cent, per annum ; 
 the Dutch loan four per cent. ; as to that on the 
 French loans, " His Majesty being willing to give to 
 the United States a new proof of his affection and 
 friendship, makes a present of and forgives the whole 
 arrears of interest to the day of the treaty of peace, a 
 favour which the Minister of the Congress of the 
 United States acknowledges to flow from the pure 
 bounty of the King." ^ 
 
 ' See the third article in the contract between the United States and 
 France, completed at Versailles July 16th 1782. 
 
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The Revolutionary Finances. 47 
 
 VIII. 
 
 On the 6th of February 1778 Louis XVI. en- 
 tered into treaties of amity and commerce and of 
 alliance with the United States, on a footing of the 
 most perfect equality and reciprocity. By the latter 
 of these the French King became the guarantee of 
 their sovereignty, independence and commerce. The 
 Marquis de Lafayette was among the first in the 
 American army who received the welcome tidings. 
 In a transport of joy he embraced General Washing- 
 ton, exclaiming — " The King, my master, has ac- 
 knowledged your independence, and entered into an 
 alliance with you for its establishment." The joy 
 felt hy the people and the army exceeds description. 
 The several brigades assembled by order of the 
 Commander-in-Chief, and offered public thanks to 
 Almighty God. " Long live the King of France !" 
 burst from the breast of every private in the army. 
 The Americans fancied that peace was within view. 
 But Congress was wiser, and that the people might 
 not be lulled into a dangerous confidence warned 
 them : " You must yet expect a severe conflict ; though 
 a foreign alliance may secure our independence, it 
 cannot save our country from devastation." ^ 
 
 And so the event proved. 
 
 ' Ramsat. 
 
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48 The Revolutionary Finances. 
 
 IX. 
 
 Unfortunately the tax recommended to the states 
 in November 1777 failed, and the sums derived 
 from loans were greatly inadequate to the expendi- 
 tures for the support of the war; and although the 
 aflfairs of the states had experienced a favourable turn 
 in 1778, the depreciation of the notes, under the 
 unavoidable necessity of largely increased issues, grew 
 rapidly greater. The emissions authorized during the 
 year aggregated sixty-three million five hundred 
 thousand dollars ; the whole sum of bills emitted up 
 to the 1st of January 1779 being one hundred and one 
 million five hundred thousand. The solid cash pass- 
 ing through the continental treasury during the year 
 was only seventy-eight thousand six hundred and 
 sixty-six dollars, and in 1779 but seventy-three thou- 
 sand dollars — so that the whole machinery of govern- 
 ment was carried on for two entire years, so far as the 
 agency of coin was concerned, with one hundred and 
 fifty-one thousand six hundred and sixty-six dollars ! 
 So small an expenditui-e of metallic currency shows 
 the powerful agency of paper in the war operations of 
 that critical period, performing as it did, in spite of 
 counterfeits and depreciation, the office of hard money.' 
 
 ' Breck. — " This handful of coin in gold would weigh but seven 
 hundred pounds ; and we may not be surprised at the government being 
 80 chary as to refuse General Washinoton's demand for a small share 
 
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The Revolutionary Finances. 49 
 
 2. According to Thomas Jefferson's table the cash 
 'value of the emissions authorized in 1778 was some- 
 what' more than eleven million three hundred and 
 thirty thousand dollars. The depreciation in January 
 and February was four paper dollars for one in silver ; 
 in March five for one ; in April six for one ; in May 
 five for one ; in June and July four for one ; in Au- 
 gust and September five for one; in November and 
 December six for one.* The rise in value in June and 
 July was due to intelligence of the French alliance. 
 
 3. The year was but a repetition of the financial 
 difficulties and embarrassments of 1777. "Let those 
 among you who have leisure and opportunity," said 
 ■Congress, in an address to the public in May, " collect 
 the moneys which individuals in your neighbourhood 
 are desirous of placing in the public funds. Let the 
 several legislatures sink their respective issues, that so 
 there being but one kind of bills there may be less 
 ■danger of counterfeits. Refrain a little while from 
 purchasing those things that are not absolutely neces- 
 sary, so that they who have engrossed commodities 
 may suffer (as they deservedly will) the loss of their 
 ill-gotten hoards." Later, in the last days of Decem- 
 ber, it was considered important officially to deny re- 
 ports "circulated in divers parts," that "Congress 
 ■would not redeem the bills issued by them to defray 
 the expenses of the war, but would suffer them to sink 
 
 gf it to pay bounties to enlisted soldiers. In denying him Congress 
 declared that the coin must be kept for the commissaries of prisoners, 
 to be used where paper would not pass." 
 
 ' It is to be observed that the depreciation was greater in some states 
 than in others at the same moment. 
 
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50 The RevolutioTiary Finances. 
 
 in the hands of the holders." Such allegations were 
 denounced as false and derogatory to their honour. 
 And doubtless at that time the confident belief waa 
 that the bills would be paid to the uttermost. 
 
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The Revolutionary Finance's. 51 
 
 X. 
 
 Notwithstanding, however, the great helps receiv- 
 ed from France of men, ships and money, and the 
 vridespread hopes which the alliaiice with that great 
 empire had excited, the financial circumstances of both 
 Congress and the states were daily growing more em- 
 barrassing and gloomy. With a view to radical im- 
 provement in the public credit. Congress signaliz'ed the 
 opening of the year 1779 with measures of substantial 
 importance. On the 2d of January — besides calling 
 out of circulation the bills authorized the 20th of May 
 1777 and the 11th of April 1778,' both of which emis- 
 sions had been so extensively counterfeited as practi- 
 
 ' That great source of moral turpitude, the circulating paper, died of 
 itself without any visible wound, except from the immense quantity 
 counterfeited in New York and elsewhere under British influence. In 
 a confidential letter to Lord George Germaine, about this time (1781), 
 General Clinton observed, '' that the experiments suggested by your 
 lordships have been tried ; no assistance that could be drawn from the 
 power of gold or the arts of counterfeiting have been left untried, but 
 still the currency, like thq widow's cruise of oil, has not failed." — 
 [Gordon's History of the American Revolution.^ "It is a fact too well 
 authenticated to admit of dispute," says Henry Phillips, Jr., '' that 
 General Howe aided the making and altering of counterfeit continental 
 bills. In the same newspaper — in New York — in which the British 
 ofBoial documents were printed, were also printed advertisenjents pro- 
 posing to supply counterfeit money to persons going into other colonies ; 
 so nearly and exactly executed that no risk attended their circulation. 
 Persons accompanying a British flag of truce were known to have made 
 use of the opportunity for circulating the counterfeits ; and emissaries 
 from New York endeavoured to obtain from the mills paper similar to 
 that used by Congress for its emissions." — [Phillips's Continental 
 Money, ii. 70.] 
 
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52 The Revolutionary Finances. 
 
 cally to destroy their value — Congress appealed to the 
 states to pay into the continental treasury their respect- 
 ive quotas of fifteen millions of dollars for the year 
 1779, and six millions a year for eighteen years from 
 and after 1779; the whole sums so paid to be a fund 
 for sinking the loans and emissions made prior to the 
 31st of December following. So much of it as was 
 derived from the yearly payments of six millions was 
 to be devoted in the first instance to the payment jof 
 interest on loans made and to be made up to the 1st 
 of January 1780, and secondly, to the redemption of 
 the principal of loans contracted up to the same date. 
 The residue, together with the amount derived from 
 the fifteen millions to be paid during the year 1779, 
 was not to be reissued but destroyed. And finally, 
 the bills issued by Congress prior to 1780 were alone 
 to be received on account of the quotas. Three days 
 later taxes to the amount of fifteen millions were al- 
 lotted among the states ; Georgia was exempted from 
 the apportionment, that state being occupied by British 
 troops. — On the 21st of May, in consequence of the 
 extreme depreciation of the paper, in addition to the 
 fifteen millions asked for in January, the states were 
 called upon to supply, for the service of the year 1779, 
 their several quotas of forty-five millions — the whole 
 to be paid into the continental treasury before the 1st 
 of January 1780. On the 6th of October, Congress, 
 accommodating itself to the depreciation as it then 
 stood, and still hoping that the taxes already called 
 for — if duly collected — would stop it where it was, 
 and answer the demands on the public till February 
 following, called on the states to pay into the treasury 
 
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The Revolutionary Finances. 63 
 
 on the first of that month, and on the first day of 
 each succeeding month to the 1st of October 1780, in- 
 clusive, their respective quotas of the further sum of 
 fifteen millions of dollars. 
 
 Each of these calls was- accompanied by circular 
 letters addressed to the states. " Suddenly called 
 upon," said the first of these, "to repel the unpro- 
 voked invasion of a prince who ought to have exerted 
 himself for our protection ; without arms or ammuni- 
 tion, without military discipline or permanent finances, 
 without an established government and without allies, 
 and enfeebled by habitual attachments to our very 
 enemies, we were precipitated into all the expensive 
 operations relative to a state of war with one of the 
 most formidable nations on earth. Surrounded on all 
 sides with wants, difficulties and dangers, notwithstand- 
 ing the internal wealth of our country, immediate taxa- 
 tion was impracticable. And for the same reason, and 
 a share of ill success at different periods, we could not 
 hope, either at home or abroad, to borrow money to 
 supply our exigencies. From necessity we embraced 
 the expedient of emitting paper money on the faith 
 of the United States ; an expedient often successfully 
 practised in separate states while we were subjected to 
 British dominion. Large sums were indispensably ne- 
 cessary, and the paper currency multiplied beyond 
 what was necessary for the purposes of a circulating 
 medium. This alone could not fail to discredit it in 
 some degree, but the arts of an unprincipled enemy 
 have added to the mischief. As their last effort, they 
 have had recourse to fraud. Their emissaries have 
 employed a variety of artifices to debase our money 
 
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54 The Revolutionary Finances. 
 
 and increase the prices of commodities. The fears 
 and apprehensions of the people have been ^larmed 
 by misreprefsentations, while our enemies of the high- 
 est rank have not hesitated to counterfeit our bills of 
 credit and disperse them through the country. Such 
 being the embarrassments which interrupt the free 
 circulation of our money, they loudly call for a remedy, 
 and Congress, from a regard for good faith, for private 
 justice and the public safety, are bound to apply it. 
 To raise the value of our paper money and to redeem 
 it will not, we are persuaded, be diiEcult. Without 
 public inconvenience or private distress, the whole of 
 the debt incurred in paper emissions to this day may 
 be cancelled by taxes ; it may be cancelled within a 
 period so limited as must leave the possessor of the 
 bills satisfied with his security, and if, by a continu- 
 ance of the war, the public service should demand 
 further emissions, they, too, may be cancelled within 
 the same period; it being evident that our ability to 
 sustain a tax must increase in proportion to the quan- 
 tity of money in circulation." " The great and in- 
 creasing depreciation of your currency, " said the second 
 of these addresses, issued in May, " requires the imme- 
 diate, strenuous and united efforts of all true friends 
 of the country. In vain will it be for your delegates 
 to form plans of economy, to strive to stop continued 
 emissions by loans or taxation, if you do not zealously 
 co-operate with them in promoting their designs, and 
 use your utmost industry to prevent waste of money 
 in expenditure, which your respective situations in the 
 places where it is expended may enable you to do. A 
 discharge of this duty and a compliance with recora- 
 
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The Revolutionary Finances. 55 
 
 Hiendations for supplying money, may enable Congress 
 to give speedy assurances that no more emissions shall 
 take place, and thereby end that source of deprecia^ 
 tion. We are persuaded you will take all possible 
 care that the public welfare interfere as little as may 
 be with the comfort and ease of individuals; and 
 though raising these sums will press heavily on some 
 of your constituents, yet the obligations we feel for 
 your venerable clergy, the truly helpless widows and 
 orphans, your most gallant, generous and meritorious 
 officers and soldiers, and the public faith and common 
 weal, so irresistibly urge us to attempt the apprecia- 
 tion of your currency that we cannot withhold obedi- 
 ence to those authoritative sensations. To our con- 
 stituents we submit the propriety and purity of our 
 intentions, well knowing they will not forget that we 
 lay no burden upon them but those in which we par- 
 ticipate with them ; a happy sympathy that pervades 
 society formed on the basis of equal liberty. Many 
 ■cares, many labours — i\nd may we not add reproaches ? 
 — are peculiar to us. These are the emoluments of our 
 unsolicited stations, and with these we are content if 
 you approve our conduct." In the brief letter of the 
 9th of October Congress said : " The money which 
 Congress is at liberty to emit (the limit of emissions 
 had been fixed on the 1st of September preceding at 
 •$200,000,000, of which a considerable amount was as 
 yet unauthorized), will probably be expended in the 
 beginning of December next, and subsequent supplies 
 must be furnished by the states. This evinces the 
 necessity of punctual payment of the respective quotas, 
 on which their public credit, the existence of their 
 
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56 The Eevolutionari/ Finances. 
 
 arras and the support of their liberties so greatly de- 
 pend. We are deeply concerned to find the sum* 
 required are so large, but since the emissions are lim- 
 ited we doubt not that the operations of the taxes and 
 other salutary measures in the course of the year will 
 reduce prices, and enable Congress to lessen the quotas^ 
 or apply a part of them to diminish the public debt. 
 To promote so desirable an object we, on our part, 
 will endeavour to observe the strictest economy in the 
 public expenditures." 
 
 Unhappily the states did not respond to these ap- 
 peals in any adequate degree. 
 
 2. " A compliance with these requisitions," said a 
 committee of Congress in April 1781, "would not 
 only have answered the exigencies of the year (that 
 is, the year 1789), but would have arrested deprecia- 
 tion in its progress. But as they were not complied 
 with in due time, and the demands of the public were 
 pressing and constant, the prospect of future taxes 
 served only to urge those who had in their possession 
 the supplies and accessaries wanted to enhance the 
 price in order to pay their taxes with greater ease^ 
 while the treasury, receiving no recruit from taxes, 
 was from time to time replenished with new emissions 
 — and from these causes combined, the depreciation, 
 instead of receiving a check, proceeded with redoubled 
 vigour." 
 
 The emissions authorized between the 1st of January 
 and the 1st of September 1779 aggregated one hun- 
 dred millions of dollars, and from the 1st of September 
 to the 29 th of November, when the last emission was 
 authorized, the aggregate sum of emissions was forty 
 
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The Revolutionary Finances. 57 
 
 millions — making a total for the year of one hundred 
 and forty millions ; and from the first emission in June 
 1775 to September 1st 1779 of one hundred and sixty 
 millions (1159,948,880) ; the coin value of the emissions 
 of 1779 (1140,052,280) being, according to Thomas 
 Jefferson's table, seven millions three hundred and 
 twenty-nine thousand two hundred and seventy-eight 
 dollars. The depreciation, according to the same 
 authority, was — January 14th, eight for one ; February 
 3d and 12th, ten for one; April 2d, seventeen for onej 
 May 5th, twenty-four for one; June 4th and 17th, 
 twenty for one; September 17th, twenty-four for one; 
 October 14th, thirty for one; November 17th and 
 29th, thirty-eight and a half for one. 
 
 3. As there was a general outcry because of the 
 depreciation and the floods of money in circulation, 
 Congress resolved on the 1st of September that they 
 would on no account whatever emit more bills than 
 enough to make the whole ambunt up to two hundred 
 millions. Forty million fifty-one thousand one hun- 
 dred and twenty dollars being the sum necessary to 
 conclude the two hundred millions, it was determined 
 that only so much thereof be emitted as should be 
 absolutely necessary for the public exigencies before 
 adequate supplies could be otherwise obtained, relying 
 for such supplies on the exertions of the states.' 
 
 4. On the 13th of September Congress issued an 
 elaborate address, exhaustive of the condition of the 
 financial afiairs of the country. Money, said the 
 authors of this important paper, was necessary to 
 
 ' Report of Committee of Congress, 18th April 1781. 
 
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58 The Revolutionary FirMnces. 
 
 create, pay and supply the army. " Of your own, 
 there was at the beginning of the war but little ; of no 
 nation in the world could you then borrow." Bills of 
 credit were emitted of necessity, and the faith of the 
 people was pledged for their payment, and loans were 
 solicited and obtained. A national debt was unavoid- 
 ably created. The sura of the debt on which interest 
 was payable in Trance was $7,545,196; on which 
 interest was payable in America $26,188,909 ; the 
 amount borrowed abroad was not exactly known, the 
 balances not having been transmitted, but was sup- 
 posed to be about $4,000,000. The aggregate taxes 
 paid into the continental treasury were stated at 
 $3,027,560; so that all the funds advanced by the 
 people in the form of loans and taxes were but 
 $36,761,665. "Judge then of the necessity of emis- 
 sions, and learn from whom and whence that necessity 
 arose." " We unanimously declare it essential to the 
 welfare of the states that the taxes already called for 
 be immediately paid into the treasury." " Exclusive of 
 the great expenses of the war, the depreciation of the 
 currency has swelled the price of every necessary 
 article, and of consequence has made such additions 
 to the usual amount of expenditure that very consid- 
 erable supplies must be immediately provided by 
 taxes and loans." The physical ability of the States 
 to pay its debts was elaborately argued, while the 
 excellence of the circulation provided by Congress was 
 alleged in a well-known phrase : " Let it be remem- 
 bered that paper money is the only kind of money . 
 which cannot ' make wings unto itself and fly away.' 
 It remains with us; it will not forsake us; it is ever 
 
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The Revolutionary Finances. 59 
 
 ready and at hand for the purposes of commerce or 
 taxes, and every industrious man can find it." It had 
 been charged by the enemies of America that there 
 was reason to apprehend a violation of the public 
 faith. This imputation was indignantly repelled. " It 
 is with great regret and reluctance," said the authors 
 of the paper from which we are quoting, " that we can 
 prevail on ourselves to take the least notice of a ques- 
 tion which involves in it a doubt so injurious to the 
 honour and dignity of America." "We should pay 
 an ill compliment to the ujiderstanding and honour 
 of every true American were we to adduce many 
 arguments to show the baseness or bad policy of vio- 
 lating our national faith,, or omitting to pursue the 
 measures necessary to preserve it. A bankrupt faith- 
 less republic would be a novelty in the political world, 
 and appear among reputable nations like a common 
 prostitute among chaste and respectable matrons. The 
 pride of America revolts from the' idea : her citizens 
 know for what purposes these emissions were made, 
 and have repeatedly plighted their faith for the 
 redemption of them ; they are to be found in every 
 man's possession, and every man is interested in their 
 being redeemed : they must therefore entertain a 
 high opinion of American credulity, who suppose the 
 people capable of believing, on due reflection, that all 
 America will, against the faith, the honour and the 
 interest of all America, be ever prevailed upon to 
 countenance, support or permit, so ruinous, so dis- 
 graceful a measure Determine to finish the 
 
 contest as you began it, honestly and gloriously. Let 
 it never be said that America had no sooner become 
 
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60 The Revolutionary Finances. 
 
 independent, than she became insolvent ; or that her 
 infant, glories and growing fame were obscured and 
 tarnished by broken contracts and violated faith, in 
 the very hour when all the nations of the earth were 
 admiring, and almost adoring, the splendour of her 
 rising." 
 
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The Revolutionary Finances. 61 
 
 XI. 
 
 The campaign of the year had been barren of 
 important results. On the part of the British it had 
 been predatory ; one of robbery, burning and destruc- 
 tion ; on the part of the Americans defensive, although 
 the actions at Stony Point and Powles Hook were 
 notable instances of their enterprise and valour. 
 Georgia, however, was substantially recovered to the 
 Crown ; and the British, seeing in the condition and 
 circumstances of the Southern States opportunity for 
 successful operations, made vigorous preparations for 
 a winter and spring campaign in that portion of the 
 country. The means of defence were inconsiderable ; 
 and Congress, deeply impressed with the importance 
 of impending events — not only in the South but in the 
 North also' — exerted all its powers to provide for the 
 crisis. The condition of the treasury was one of 
 anxious solicitude. Empty, and greatly in arrears, 
 taxes and loans utterly inadequate, prevented from 
 further emissions of paper money by a solemn pledge 
 to the people,' the army unpaid, the subsistence de- 
 
 ' " The situation of the army with respect to supplies is beyond descrip- 
 tion alarming. It has been five or six weeks past on half allowance, 
 and we have not more than three days' bread at a third allowance on 
 hand, nor anywhere within reach. When this is exhausted we must 
 depend on the precarious gleanings of the neighbouring country. Our 
 magazines are absolutely empty everywhere, and our commissaries 
 entirely destitute, of money or credit to replenish them. We have never 
 
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62 The Revolutionary Finances. 
 
 partment unsupplied, — a new mode of requisition was 
 now adopted by the Congress. On the 25th of Feb- 
 ruary the states were called' upon to furnish, for the 
 campaign of 1780, supplies in kind, to be raised and 
 delivered at such times and places as the commander- 
 in-chief of the army should fix upon as most conve- 
 nient. The call was for 330,000 hundred weight of 
 beef; 455,000 gallons of rum; 123,000 barrels of 
 flour; 695,000 bushels of corn or other short forage 
 equivalent ; 53,000 bushels of salt ; 9000 tons of hay ; 
 7000 hogsheads of tobacco, and 52,000 bushels of rice. 
 The accounts of the states for these supplies were to 
 be kept and settled in Spanish milled dollars, and the 
 balances ultimately paid in specie ; and if, upon final 
 adjustment, any state was found to have supplied more 
 than its quota under the call, the value of the surplus 
 was to be paid for in specie, and interest allowed at 
 the rate of six per cent, a year; while, if any state 
 failed in delivering its quota, it was to be charged with 
 the aggregatie sum of the deficiency, and pay to the 
 United States a like interest thereon. None of the 
 states complied with this call, nor did anything ap- 
 proximating to a compliance. Later in the year, on 
 
 experienced a like extremity at any period of the war. We have often 
 felt temporary want from accidental delays in forwarding supplies, but 
 we always had something in our magazines and the means of procuring 
 more. Neither one nor the other is at present the case. This repre- 
 sentation is the result of a minute examination of our resources." — 
 [Washington to President Reed, December 16th 1779.] " Our provi- 
 sions are in a manner gone. We have not a ton of hay at command, 
 nor magazines to draw from. * * Money is extremely scarce, and worth 
 little when we get it. We have been so poor for a fortnight that we 
 could not forward the public despatches for want of cash to support the 
 expresses." — [General Qreenb to President Reed, February 29th 1780.] 
 
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The Revolutionary Finances. 6S 
 
 the 4th of November, a similar requisition was made 
 for taxes amounting to ten millions of dollars in gold 
 or silver, or " money of the new emission," — or specific 
 articles enumerated in the call and to be supplied at 
 fixed prices, and upon terms the same as those which 
 accompanied the call of the 25th of February. In 
 the interim between these two dates, several appeals 
 were made to particular states; September 15th no- 
 tably, when Massachusetts, New Hampshire and Con- 
 necticut were asked, for the " immediate supply of 
 the army," to furnish one thousand head of cattle 
 weekly ; and New Jersey, Pennsylvania and Delaware 
 were urged " with all possible despatch" to supply two 
 thousand head for instant want's. It illustrates the 
 extreme poverty of Congress during this important 
 year, that it was compelled to draw warrants to the 
 amount of $28,300, on the loan-offices, for means ne- 
 cessary to defray the expenses of forwarding the cattle 
 to the army. 
 
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64 The Revohitmiary Finances. 
 
 XII. 
 
 The depreciation of the bills was now (March 
 18th 1,780) so excessive, and the disorders it oc- 
 casioned so wide-spread and important, that Congress 
 resolved upon a vital modification of their character. 
 " These United States having been driven into this 
 just and necessary war at a time when no regular 
 civil governments were established of sufficient energy 
 to enforce the collectipn of taxes, or to furnish funds 
 for the redemption of such bills of credit as their ne- 
 cessities obliged them to issue, and before the powers 
 of Europe were sufficiently convinced of the justice of 
 their cause, or of the probable event of the contro- 
 versy, to affijrd them aid or credit ; in consequence of 
 which their bills increased in quantity beyond the sum 
 necessary for the purposes of a circulating medium, — 
 and wanting at the same time specific funds upon 
 which to rest for their redemption, they have seen 
 them daily sink in value, notwithstanding every 
 effijrt that has been made to support them; insomuch 
 that they are nbw passed, by common consent in 
 most parts of the United States, at at least thirty-nine 
 fortieths below their nominal value, and still depre- 
 ciating, — whereby the community suffers great injus- 
 tice, the public finances are deranged, and the necessary 
 dispositions for the defence of the country are impeded 
 and perplexed ; to remedy these evils, for which pur- 
 
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The Revolutwnary Finances. 65 
 
 pose the United States are now become competent, — 
 their independence being well assured, their civil gov- 
 ernments established and vigorous, and the spirit of 
 their citizens ardent for exertion, — it is essential 
 speedily to reduce the quantity of the paper medium 
 in circulation, and to establish and appropriate funds 
 that shall insure the punctual redemption of the bills," 
 Congress resolved, that the respective states should 
 continue to bring into the continental treasury, by 
 taxes or otherwise, their fulF quotas of the fifteen mil- 
 lions of dollars assigned among them on the 6th of 
 October 1779 ; that silver and gold should be received 
 in payment of the taxes at the rate of one Spanish 
 milled dollar in lieu of forty dollars of the bills ; that 
 the bills so brought in (except those for January and 
 February, which were required to discharge past con- 
 tracts), should not be reissued but destroyed; that as 
 rapidly as such bills were brought in and funds should 
 be provided, other bills should be issued, not to ex- 
 ceed on any account a twentieth part of the nominal 
 sum of the bills brought in to be destroyed; that the 
 new bills to be issued should be redeemable in specie 
 after six years, with interest at five per cent., also to 
 be paid in specie at the time of redemption, or at the 
 election of the holder annually in sterling bills of ex- 
 change drawn upon the American commissioners in 
 Europe at 4s. %d. sterling per dollar. The new bills 
 were to be issued on the funds of the individual states, 
 to be established by them for the purpose of redemp- 
 tion, and the faith of the United States was also 
 pledged as an additional security, in case any state 
 should be rendered incapable to redeem them. The 
 
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66 The Revolutwnary Finances. 
 
 new bills were to be issued by the continental trea- 
 sury, and six-tenths of them- were to be delivered to 
 the states in their proper proportions; four-tenths to 
 be for the use of the United States, and credited to 
 the states in adjustment of -their quotas under the call 
 of 6th of October 1779 ; the states to be charged with 
 whatever portion of the interest was paid by the 
 United States in bills of exchange ; and finally, they 
 were called on to provide funds for their severial 
 quotas of the new bills, to be so productive as to sink 
 or redeem one-sixth part of them annually after the 
 first of the ensuing January (1781). 
 
 It is not worth while to dwell upon this act ; it was 
 denounced by Doctor Witherspoon as a "great and 
 deliberate breach of the public faith;" the Count de 
 Vergennes said it was "an act of bankruptcy," and 
 other public men were equally bitter in their expres- 
 sions concerning it. The reader can judge for him- 
 self — in view of all the circumstances — how far the 
 Congress was censurable, or whether it was so at all 
 or not. 
 
 The statesmen of Congress offered this scheme to 
 the states in the confident hope and belief that it would 
 be accepted with punctuality ; that it would restore 
 the currency to a fixed standard ; that it would enable 
 the states to furnish the supplies called for on the 25 th 
 of February ; and that it would put Congress in a po- 
 sition to pay the army, discharge the more pressing 
 debts already contracted, and provide means for the 
 exigencies of the campaign. But the states did not 
 respond, as Congress so strongly hoped; and public 
 necessities again compelled the adoption of temporary 
 
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The Revolutionary Finances. 67 
 
 •expedients. Among these was that of raising funds 
 by drawing bills of exchange on the American minis- 
 ters in Europe ; although, as was afterwards with ex- 
 treme simplicity admitted, Congress had not sufficient 
 assurance that the bills would be honoured. The 
 whole amount of these foreign bills authorized to be 
 drawn, including those intended to pay interest on the 
 public debt, approximated to near three-quarters of a 
 million of dollars. 
 
 On the 20th of March the states were recommended 
 to so modify their tender laws as to conform them to 
 the existing state of the currency, and to take care so 
 to frame them as to prevent unjust advantage being 
 taken of the proposed action of the legislatures. The 
 states complied, though it is hardly necessary to re- 
 mark that it was impossible to prevent fraud and 
 injustice, however vigilant the assemblies were to 
 attempt it. 
 
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68 The Revolutionary Finances. 
 
 XIII. 
 
 On the 24tli of April Congress made another ap- 
 peal to the states : "It is the duty of Congress to be 
 as full and explicit in their requisitions as the public 
 exigencies are great and pressing ; and they are confi- 
 dent that the citizens of the states are not more de- 
 sirous to be informed of their iiflfairs than they are 
 ready to afford the most vigorous assistance. It is 
 unnecessary to mention our embarrassments ; they are 
 known to you ; to the means of relieving them we 
 wish to call your attention. The whole of the moneys 
 due on the quotas of taxes to the 1st of March last 
 .are become of immediate and indispensable necessity. 
 On these quotas drafts are now making and must con- 
 tinue to be made to the whole amount, nor can a 
 doubt be admitted of their being punctually answered. 
 If any state be unprepared, if the collections are in- 
 complete, not a moment is to be lost. Delay may 
 involve consequences too fatal to be hazarded. Urge, 
 therefore, the instant execution of eyery measure which 
 has been adopted, and the speedy adoption of such as 
 yet remain to be taken. The crisis calls for exertion. 
 Much is to be done in a little time, and every motive 
 that can stimulate the mind of man presents itself to 
 view. No period has occurred in this long and glori- 
 ous struggle in which indecision could be so destruct- 
 
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The Revolutionary Finances. 69 
 
 ive; and on the other hand no conjunctui'e has been 
 more favourable to great and deciding efforts." 
 
 2. On the 19th of May Congress called upon the 
 states from New Hampshire to Virginia — those two 
 states included — to collect and pay into the public 
 treasury, within thirty days, ten millions of dollars in 
 •continental currency, part of the sum required to be 
 paid last year. The states, in order to comply, pressed 
 the collection of the taxes, which occasioned so much 
 clamour on the part of those who had furnished sup- 
 plies on credit, that on the 27 th of May the legisla- 
 tures were recommended to empower the collectors of 
 continental taxes due before the 1st of March 1780, 
 to receive in payment of them the notes or certificates 
 which had been given by the quartermaster and com- 
 missary of purchases for supplies. 
 
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70 The Revolutionary Fimmces. 
 
 XIV. 
 
 During this year [1780] Congress directed its 
 eflforts to the reforming of abuses, and a more respon- 
 sible administration of the army funds and supplies. 
 In every department there had been peculation and 
 wastefulness. There was a good deal of complaint at 
 a very early period touching these things, to which na 
 special heed had been given ; at any rate not in any 
 eflFective official way; but at length, in May 1779, the 
 matter came before Congress. The Board of Treasury, 
 on the 28th of that month, reported that in the judg- 
 ment of its members it would be impracticable to 
 carry on the war with paper money at the existing 
 enormous expenditures made by the departments of 
 the commissary and quartermaster generals, and of 
 the medical director. The Board said that an opinion 
 generally prevailed among the people that one cause 
 of the alarming cost of those departments arose from 
 allowing commissions to the numerous persons em- 
 ployed in purchasing for the army, and that there was 
 a wide dissatisfaction in consequence. A committee 
 was appointed to inquire into and report upon the 
 subject. On the 9th of July the committee reported,^ 
 recommending to the executive powers of the states 
 instantly to make strict inquiry into the conduct of 
 every person within their several jurisdictions em- 
 ployed in any of the departments charged, and to 
 
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The Revolutiojiary Fiimnces. 71 
 
 suspend and cause the prosecution of those guilty or 
 strongly suspected. Later, in August 1780,. Congress 
 declared that it was of the utmost importance to 
 prevent waste, destruction, embezzlement and misap- 
 plication of the public stores; and as no adequate 
 means had been provided for the just punishment of 
 delinquents in the various military departments, it 
 was resolved [it is to be observed that the resolves of 
 Congress were substantially acts of Congress, intended 
 to have the effect and force of laws so far as they 
 went] that any one who should sell, embezzle or wil- 
 fully misapply the military or hospital stores, horses, 
 arms or ammunition, should suffer death, or such other 
 punishment as a court-martial should deem equal to 
 the punishment of the offender. 
 
 2. " In addition to short crops- (speaking of the 
 years 1779 and 1780) and depreciating money, dis- 
 order and confusion pervaded the departments for 
 supplying the army. Systems for these purposes had 
 been hastily adopted, and were very inadequate to the 
 ends proposed. To provide for an army under the 
 best establishment and with a full military chest is a 
 work of difficulty, and, though guarded by the precau- 
 tions which time and experience have suggested, opens 
 a door to many frauds ; but it was the hard case of the 
 Americans to be called on to discharge this duty with- 
 out knowledge of the business, and under ill-digested 
 systems and with a paper currency never two days of 
 the same value. Abuses crept in, frauds were prac- 
 tised, economy was exiled. To obviate these evils 
 Congress adopted the expedient of sending a commit- 
 tee to the camp of the main army. They were fur- 
 
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72 The Reifolutionary Fiminces. 
 
 nished with ample powers and instructions to reform 
 abuses, to alter preceding systems and to establish 
 new ones in their room. The committee proceeded to 
 camp in May 1780, and thence wrote sundry letters 
 to Congress and the states, in which they confirmed 
 the representations made of the distresses and dis- 
 orders everywhere prevalent.' In particular they 
 stated — that the army was unpaid for five months; 
 that it seldom had more than six days' provisions in 
 advance, and was on several occasions for successive 
 days without meat ; that the army was destitute of 
 forage ; that the medical department had neither sugar, 
 cofi'ee, tea, chocolate, wine nor spirituous liquors of 
 any kind ; that every department of the army was 
 without money, and had not even the shadow of credit 
 left ; that the patience of the soldiers, borne down by 
 the pressure of complicated sufferings, was on the 
 point of being exhausted." * 
 
 ' President Reed, in his message to the Assembly of Pennsylvania in 
 1779, says : '' In conformity to the laws of the state and your desire, we 
 have proceeded to the sale of ihe confiscated estates, and have the satis- 
 faction to acquaint you that the sums arising therefrom are so consider- 
 able as to afford a great relief to the good people of this state from their 
 public burdens." 
 
 ^ Ramsay, ii. 189. 
 
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The Revolutionary Finances. 73 
 
 XV. 
 
 Now, here are some facts concerning the constitu- 
 tion of the army : The first enlistments into the conti- 
 nental service expired at the end of the year 1775. The 
 commander-in-chief, not being able to re-enlist the sol- 
 diers, was reduced almost to the necessity of abandoning 
 the extensive lines in the vicinity of Boston ; but not- 
 withstanding this, such were the prejudices in favour 
 of short enlistments, and such the dread of a standing 
 army, that Congress was obliged to enlist the second 
 army for one year, and the time of its service expired 
 at or about the end of 1776. During that campaign 
 Congress was so fully convinced of the. fatal conse- 
 quences of such a policy as at all events to determine 
 that the next enlistments should be for the war; but 
 was afterwards constrained to provide the alternative, 
 *'or for three years," — and those who enlisted for this 
 term left the army in 1780. In 1780 the army was 
 greatly reduced, and the states were earnestly called 
 on to recruit their respective regiments, — but such 
 were the prospects of gain from privateering and other 
 employments — such had been the sufferings of the 
 array, and so weakened was the confidence in public 
 faith, as to require enormous bounties in specie for ob- 
 taining recruits ; the average bounty in many states 
 was two hundred and fifty dollars in specie, and in 
 Massachusetts it was upwards of two hundred and 
 
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74 The Revolutionary Finances. 
 
 eighty. If we divide the army into four classes it will 
 appear that the soldiers of the first and second classes 
 were discharged and fully paid in 1775 and 1776 ; 
 that the soldiers of the third class, who enlisted for 
 the war between 1777 and 1780, served six, five or 
 four years, without any other prospect of reward than 
 the stipulations of Congress ; and that the fourth class, 
 some of whom served two and a half years, others two 
 years and others one, were amply paid by bounties, the 
 least of which amounted to one hundred dollars a year, 
 or eight and one-third dollars a month in specie, exclu- 
 sive of the allowance made by Congress. The third 
 and fourth classes were, however, entitled by their 
 contract to six and two-third dollars in specie per 
 month, or to an equivalent exclusive of bounties, ra- 
 tions and clothing." 
 
 2. Until the opening of the campaign of 1780 the 
 army had borne its sufferings with unparalleled patience 
 and perseverance. What pay they had received was 
 chiefly depreciated money. But Congress was not un- 
 mindful of their sufferings and services. As early as 
 September 1776 it was resolved to make provision for 
 granting lands in certain proportions to the officers 
 and soldiers who would engage in the service and con- 
 tinue therein to the close of the war or until discharged 
 by Congress, and to the representatives of such officers 
 and soldiers as might be slain by the enemy. On the 
 15th of May 1778 it was unanimously resolved that 
 all military officers commissioned by Congress, who 
 were then or who thereafter might be in the service 
 
 ' Elbridoe Gerry in IIouHe of Representatives, 18th February 1790: 
 "Debates in Congress," ii. 1325-6. 
 
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The Revolutionary Finances. 75 
 
 of the United States and continue therein during the 
 war, should, after the conclusion thereof, receive annu- 
 ally for the term of seven years, if they lived so long, 
 one-half of the pay then established for such officers, 
 with a proviso that general officers should not receive 
 more than the half-pay of a colonel; and it was re- 
 solved also that non-commissioned officers and soldiers 
 enlisted for the war should receive at the expiration 
 of it, a reward of eighty dollars. On the 17th of Au- 
 gust 1779, having prefaced their resolution with a 
 preamble setting forth that the army of the United 
 States of America, by their patriotism, valour and 
 perseverance in the defence of the irights and liberties 
 of the country, were entitled to the gratitude as well 
 as approbation of their fellow-citizens, they recom- 
 mended to the several states to make such further 
 .provision for the officers and soldiers enlisted for the 
 war as belonged to them respectively, and who should 
 continue in service till the establishment of peace, as 
 should be an adequate compensation for the many dan- 
 gers, losses and hardships they had suiFered in the course 
 of the contest ; either by granting to their officers half- 
 pay for life and proper rewards to their soldiers, or in 
 such other way as might appear most expedient. And 
 it was recommended also that the states should make 
 provision for the widows of such of their officers and 
 soldiers who had enlisted for the war, as had died or 
 might die in the service, as would secure to them the 
 sweets of that liberty for the attainment of which 
 their husbands had laid down their lives. On the 
 10th of April 1780, Congress resolved that so soon as 
 the state of the public finances would admit, they would 
 
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76 .Tlie Revolutionary Finances. 
 
 make good to the line of the army and the indepen- 
 dent corps, the deficiency of their original pay occa- 
 sioned by the depreciation of the currency ; but none 
 were to derive the benefit of this resolution except 
 those who had engaged to serve for the war or for three 
 years, and were then in service, or should thereafter 
 engage to serve during the war. On the 13th of Au- 
 gust 1780, Congress resolved that from and after the 
 first of that month the army should receive their pay 
 in the " new bills," and again recommended to such of 
 the states as had not made compensation to their offi- 
 cers and soldiers, agreeably to the resolution of Con- 
 gress of the 17th August 1779, to do so as soon as 
 possible. At the same time the provision for granting 
 lands was extended to the general officers ; and on the 
 24:th the resolution of May 1778, granting half-pay 
 for seven years to officers who should continue in ser-. 
 vice to the end of the war, was extended to the gene- 
 rals and such as had died or should thereafter die in 
 the service, to commence from the time of such officers' 
 death ; or if there should be no widow, or in case of 
 her intermarriage, that it should go to the orphan 
 children of such marriage. But still the public trea- 
 sury remained unsupplied ; the army continued with- 
 out pay, and oftentimes were in great distress for want 
 of provisions." 
 
 ' Beport of Committee of Congress, 18th May 1781. 
 
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The Revolutionary Finances. 77 
 
 XVI. 
 
 The distress which the Americans suffered from 
 the diminished value of their currency, though felt in 
 the year 1778, did not arrive at its highest pitch till 
 the year 1780. Under the pressure of sufferings from 
 this cause, the officers of the Jersey line addressed a 
 memorial to their state legislature, setting forth, " that 
 four months' pay of a private would not procure for 
 his family a single bushel of wheat ; that the pay of a 
 colonel would not purchase oats for his horse; that a 
 common labourer or expressman received four times 
 as much pay as an American officer." They urged 
 that unless a speedy and ample remedy was provided 
 a dissolution of their line was inevitable, and con- 
 cluded by saying that their pay should be made up in 
 Mexican dollars or in something equivalent.' 
 
 2. The original idea of a continental army, to be 
 raised, paid, subsisted and regulated upon an equal 
 and uniform principle, had been in a great measure 
 exchanged for state establishments. This mischievous 
 measure partly originated from necessity, for state 
 credit was not quite so much depreciated as conti- 
 nental ; Congress not possessing the means for support- 
 ing the army, devolved the business on the component 
 parts of the confederacy. Some states, from their 
 internal ability and advantages, furnished their troops 
 
 ' Ramsay, ii. 184. 
 
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78 The Revolutionary Finances. 
 
 not only with clothing but with many conveniences. 
 Others supplied theirs with some necessaries, but on a 
 more contracted scale. A few, from their particular 
 situation, could do little or nothing at all' 
 
 3. So great were the necessities of the American 
 army, that "Washington was obliged to call on the 
 magistrates of the adjacent counties for specific quan- 
 tities of provisions, to be supplied in a given number 
 of days. At other times he was compelled to send 
 out detachments of his troops to take provisions at 
 the point of the bayonet.^ 
 
 4. But though a tide of misfortunes appeared to 
 be pouring in upon the United States, no signs were 
 discovered of any disposition to relinquish the strug- 
 gle. " They seemed to rise in the midst of their 
 distresses, and to gain strength from the pressure of 
 calamities." When Congress could command neither 
 money nor credit, the citizens of Philadelphia formed 
 a bank — called the " Bank of Pennsylvania" — the sole 
 object of which was to furnish the army with a large 
 supply of rations. This institution was the project 
 of Robert Morris, who, in conjunction with others, 
 his fellow-citizens, subscribed altogether 315,000Z. 
 Pennsylvania money. The subscribers to the bank 
 pledged themselves to pay their subscriptions in gold 
 and silver, if it became necessary in order to fulfil its 
 engagements, while Congress, to indemnify and reim- 
 burse them, directed the Board of Treasury to deposit 
 in the bank 150,000(1. sterling bills of exchange. The 
 usefulness of this institution was great, and it was all 
 the greater because the times were out of joint and 
 
 ' Ramsav, ii. I .SO. ' Kamsay, ii. 186. 
 
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The Revolutionary Finances. 79 
 
 critical. The " Bank of Pennsylvania" continued its 
 operations for about a year, and was the ground-work 
 of the "Bank of America," established in 1781. 
 . 5. The powers of the committee of Congress in the 
 camp of the General-in-Chief were so enlarged as to 
 authorize them to frame and execute plans for draw- 
 ing out the resources of the country. In this character 
 they urged the states to prompt and vigorous exer- 
 tions ; but though the legislatures enacted laws and 
 undertook their execution, they were only measurably 
 successful. Touching this want of success in meeting 
 the public exigencies, Ramsay philosophizes thus : 
 " The result of the experiment was, that however 
 favourable republics may be to the liberty and happi- 
 ness of the people in time of peace, they will be 
 greatly deficient in that vigour and despatch which 
 military operations require, unless they imitate the 
 policy of monarchies by committing the executive 
 department to a single will." Which is excellent good 
 politics, but extremely unrepublican. 
 
 6. Family gifts — the gifts of afiection to soldiers 
 in the army — entered not inconsiderably into the sum 
 total of its support, while the exertions of associated 
 neighbours were also most useful. The ladies of Phil- 
 adelphia — as an example of this — contributed of their 
 means ; the widow gave her mite, and the rich, — well, 
 the rich did not give in the proportion of Phillis the 
 coloured woman who gave 7s. 6cZ., but they did ex- 
 tremely well, and on the 4th of July 1780, the wdfe 
 of President Eeed wrote to Washington that the 
 amount of their subscriptions was somewhat over 
 three hundred thousand dollars ($300,634), and that 
 6 
 
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80 The Revolutionary Finances. 
 
 his orders were awaited as to the best plan of dispos- 
 ing of the money. The Marchioness De Lafayette 
 gave one hundred guineas in specie to this fund, and 
 the Countess De Luzerne — another French lady of 
 rank — gave six thousand continental dollars, equiva- 
 lent to $150 in cash.^ 
 
 7. Notwithstanding all that was done, however, 
 the army continued in distress and Congress in its em- 
 barrassments. On the 26th of August 1780, the states 
 were earnestly recommended to take the most speedy 
 aud effectual measures for drawing in their respective 
 quotas of the continental bills by taxes or otherwise, 
 in order that the new money might be issued. And 
 at the same time the states were further reconunended 
 to raise by taxes, payable in the new bills, their re- 
 spective quotas of three millions of dollars, and to pay 
 the same into the public treasury as speedily as pos- 
 sible, the whole payment to be completed by the last 
 day of December following. From this it was hoped 
 that Congress would draw a supply of money to 
 enable them to pay the army and carry on the war 
 with vigour; to discharge the unfunded debt, and pay 
 the interest due on loan-office certificates. The con- 
 sequences that ensued from the failure of the states to 
 comply with this call, though alarming and painful to 
 recollect, were far short of what might have been 
 apprehended.^ 
 
 ■ Life of President Joseph Reed, 26, et scq. 
 
 ' Report of Committee of Congress, April 18th 17S1. 
 
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The Revokitionary Finances. 81 
 
 XVII. 
 
 Now the consequences, so alarming and painful 
 to the public recollection, are summed up in a word — 
 mutiny. 
 
 From a complication of wants and sufferings, a dis- 
 position to revolt began to show itself in the army. 
 It broke forth into full action among the soldiers 
 stationed at Fort Schuyler. Thirty-one men of that 
 garrison went off in a body; being pursued, sixteen 
 of them were overtaken, and thirteen of the sixteen 
 were instantly killed. About the same time two regi- 
 ments of Connecticut troops mutinied and got under 
 arms. They determined to return home or gain sub- 
 sistence at the point of the bayonet. Their "officers 
 reasoned with them, and urged every argument that 
 could interest either their pride or their passions. 
 They were reminded of their good conduct and of the 
 important objects for which they were contending, — 
 their answer was, '' Our sufferings are too great, and 
 we want present relief." After much expostulation, 
 they were at length prevailed upon to return to duty. 
 It is remarkable that this mutinous disposition of the 
 Connecticut troops was in a great measure quelled by 
 the Pennsylvania line, which in the course of a few 
 months planned and executed a much more serious 
 revolt than that which they now suppressed. On the 
 night of the 1st of January 1781, a mutiny broke out 
 
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82 The Revolutionary FiTuinces. 
 
 among these. The whole line, except three regiments, 
 mustered under arms and declared for a redress of 
 grievances. They alleged that they had enlisted for 
 three years or during the war; the three years were 
 expired, and the men insisted that the choice of stay- 
 ing or going was in themselves. The officers con- 
 tended that the choice was in the state. Superadded 
 to this cause of dispute, were the real sufferings of the 
 soldiers, — want of food, want of clothing, want of pay. 
 The British tried to corrupt the mutineers ; but the 
 mutineers were not traitors ; they arrested the British 
 spies; delivered them into the hands of General 
 Wayne, and they were tried, condemned and exe- 
 cuted. The difficulties which lay at the bottom of 
 this revolt were finally adjusted ; but the example was 
 contagious. Some Jersey troops later in the month 
 mutinied also ; they were less wise than the Pennsyl- 
 vanians ; they proceeded to acts of outrage against 
 particular officers, and professed obedience to others. 
 The measures for reducing them to submission were 
 prompt and energetic; two were executed, and the 
 others were pardoned upon promise of future good 
 behaviour.^ 
 
 * See Rahsay ii. 185, 219, et seq. 
 
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The RevolutioTiary Finances. 83 
 
 xviri. 
 
 The depreciation of the bills proceeded during the 
 year very steadily down to the point of seventj- 
 five continental dollars for one in cash. In January 
 the exchange stood at forty for one ; February, fgrty- 
 seven for one ; March and April, sixty for one ; May, 
 fifty-nine for one; June, sixty for one; July, sixty- 
 four for one ; August, seventy for one ; September and 
 October, seventy-two for one ; November, seventy-four, 
 and in December, seventy-five for one. A familiar 
 instance of the effects' of the depreciation was thus 
 given by a writer in The Pennsylvania Packet: "1 
 had money enough to buy a hogshead of sugar. I 
 sold it again, and got a good deal more money than it 
 cost me ; yet what I sold it for, when I went to 
 market again, would buy but a tierce. I sold that too 
 for a great deal of profit, yet the whole of what I sold 
 it for would afterwards buy but a barrel. I have now 
 more money than I ever had, and yet I am not so rich 
 as when I had less. I am sure we shall grow poorer 
 and poorer unless we fall on some method to lower 
 prices, and then the money we have to spare will be 
 worth something." 
 
 2. The depreciation of 1780 was partly due to the 
 want of decisive results in the war operations, and 
 partly to continued emissions by the states. As an 
 extreme example of this latter, Virginia authorized 
 
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84 The Revolutionary Finances. 
 
 emissions to an aggregate of thirty millions during the 
 year, and made it a legal tender at forty for one ! 
 Other states did the same thing though less exten- 
 sively ; so that the steady increase in the volume of 
 the currency steadily depressed its nominal value. 
 
 3. And it is a curious illustration of the laws which 
 govepn paper money, that as excessive issues had 
 exiled the cash of the country from its accustomed 
 place in the business of the people, it began to flow 
 back, as the paper money approached the period of its 
 mortality. As this daily less capably performed the 
 office of the instrument of exchange, gold and silver 
 more certainly and amply flowed in to supply its place. 
 
 4. If all the taxes called for by Congress during the 
 year had been paid into the treasury, they would have 
 aggregated one hundred and eighty-six millions of 
 dollars I 
 
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The Revolutionary Fiimnces. 85 
 
 XIX. 
 
 The exhausted state of the continental treasury 
 and the universal disorder of the finances, the pressing 
 demands for supplies in every department of the public 
 service, the consequences which began to appear, and 
 the confusion that threatened, became very serious 
 and alarming at the beginning of the year 1781, and 
 the public necessities had arisen to such a pitch of 
 urgency as convinced all thinking men that a speedy 
 remedy or ruin was in waiting.^ 
 
 2. Though the revolts recited in a preceding para- 
 graph had alarmed the states, they did not result in 
 measures of permanent relief. The wants of the army 
 were only partially supplied, and this chiefly by the 
 exercise of military force, generally by seizing provi- 
 sions and paying for them with a certificate which; — 
 as required by Congress — contained a statement on its 
 face of the quantity and quality and price of what had 
 been taken. But this sort of thing could not last ; 
 though in defiance of clamour Congress, impelled by 
 the extremity of want, seriously thought of empower- 
 ing the General-inChief to seize all the provisions he 
 Could find within twenty miles of his camp ! During 
 the whole winter and, spring the army suffered untold 
 privations, — without food, without clothing, often 
 
 ' Pelatiah Webster. 
 
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86 The Revolutiondry Finances. 
 
 without fire even, they still clung — with a noble 
 devotion — to the cause in which they were embarked. 
 
 3. On the 15th of January Congress, desirous of 
 affording some immediate relief to these devoted men, 
 made a requisition upon the states for eight hundred 
 and seventy-nine thousand dollars (|879,342), to be 
 paid in cash. " The arrears of pay due to the army," 
 said Congress in an address accompanying this requi- 
 sition, " demand your most serious consideration. The 
 honour of government and military order and disci- 
 pline depend on their regular discharge." But not- 
 withstanding the smallness of the sum demanded, and 
 the vital importance of the object to which it was to 
 be devoted, Congress reported on the 18th of April 
 that the requisition had not been answered ! 
 
 4. About the beginning of the year John Laurens 
 was sent to France, as a special minister, to seek 
 further pecuniary aids from France. The King, nol> 
 withstanding the many demands upon his treasury for 
 his own service, resolved to " give a new proof of his 
 aifection for the people of the United States," and 
 granted a further subsidy of six millions of livres 
 tournois ; and also guaranteed the payment of a loan 
 of ten millions made in Holland.* As the whole sum of 
 the subsidy granted by the King would not probably be 
 needed for demands in Europe, he consented that the 
 remainder should be put at the disposal of the super- 
 intendent of finance for use in the United States. , 
 
 5. Congress made a public statement (April 18th), 
 showing the condition of the finances to the 10th of 
 
 ' Mention has been made of this subsidy and guarantee in a former 
 paragraph. 
 
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The Revolutionary Finances. 87 
 
 February. The foreign debt was computed at six 
 millons, carrying a yearly interest of $360,000. The 
 domestic debt (which included one hundred and sixty 
 millions of old bills rated at seventy-five for one), was 
 stated as being at a cash valuation $18,057,157, on 
 seven millions of which ($7,313,306) interest was 
 payable in bills of exchange on France, amounting to 
 the yearly sum of $438,798. 
 
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88 The Revolutionary Finances, 
 
 XX. 
 
 It is at this point that we appropriately trace the 
 history of the bills from the first of January to the 
 time of their mortality in May. At the beginning of 
 the year the idea that the bills were to depreciate to 
 the point of no value whatever, and that such depre- 
 ciation must be regarded as a tax upon the people 
 ["depreciation," said Gouverneur Morris, in June 
 1780, " is an assessor that reaches every farthing and 
 baffles every attempt to deceive"], began widely to 
 prevail, and prepared the public mind for the catas- 
 trophe which soon befell them. The gradual charac- 
 ter of the depreciation, latterly very much accelerated, 
 however, had brought this particular phase of the 
 currency question home to the understandings of most 
 men; while the limited presence of real money, per- 
 forming the business of exchange with celerity and 
 perfect certainty, excited high hopes of a future stable 
 and flourishing commerce. 
 
 On the 1st of January the exchange stood at seventy- 
 five for one, and continued at that figure until about 
 the 1st of March. 
 
 2. In order clearly to apprehend the circumstances 
 which gave a final and fatal blow to the bills, and ex- 
 tinguished them utterly as the instrument of exchange, 
 it is necessary that we retrace our steps backward into 
 the spring of 1780. In March of that year the As- 
 
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The Revolutionary Finances. 89 
 
 serably of Pennsylvania authorized an emission of 
 lOOjOOOZ. paper bills, equivalent to about two hundred 
 and sixty-six thousand dollars. In addition to carry- 
 ing interest at five per cent., and the pledge of the 
 faith of the state for their redemption, the assembly 
 set apart as a further security a number of city lots 
 in Philadelphia and the Province Island, at that time 
 the property of the Commonwealth. — Hence the emis- 
 sion was called " the Island money." Although it was 
 expected that, supported in this ample way, the bills 
 would command their face-value, the fact was that 
 they speedily depreciated. In order to remedy this, 
 the assembly in December passed an act making them 
 a legal tender, and added severe penalties for refusing 
 to take them. This act, among other things, contained 
 a clause which fixed the rate of the exchange between 
 the continental and the province dollars at seventy- 
 five for one ; seventy-five of the former for one of the 
 latter. This regulation was to continue until the 1st 
 of February then next ensuing ; after which date the 
 State Executive Council was to publish the rate in the 
 first week of each month ; and as thus published it 
 was to be the legal exchange between the continental 
 and province money until the next publication. On 
 the 2d of May 1781 one silver dollar was equal to 
 three province dollars; and one province dollar was 
 equal to seventy-five dollars of the continental bills ; 
 while at the same time the exchange between conti- 
 nental dollars and silver was 220 and 225 for one, to 
 which point they had depreciated during March and 
 April. The practice among the people was to multi- 
 ply the published rate by three; so that when this was 
 
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90 The Revolutionary Finances. 
 
 seventy-five for one, the exchange would be as be- 
 tween continental dollars and silver, 225 for one. 
 When, therefore, on the 2d of May, the council fixed 
 the rate between continental dollars and the island 
 money at one hundred and seventy-five for one, they 
 in eflFect fixed the exchange between continental dol- 
 lars and silver at 525 for one. And this consequence 
 immediately followed ; and so vast and sudden a de- 
 preciation destroyed them utterly. They ceased to 
 circulate as money, and were thenceforward objects 
 only of curiosity and speculation. In this latter field, 
 their value fluctuated from 600 to 1000 for one.' 
 
 3. Thomas Jefferson says the public apprehension 
 was, that the extinction of the bills would shake the 
 confederacy to its very centre ; but the result was en- 
 tirely contrary to this gloomy anticipation ; their an- 
 nihilation was not only unattended by tumult, but was 
 everywhere a matter of rejoicing and congratulation. 
 Their great' services as a support of the war were 
 known and felt by all, and all knew and felt that their 
 destruction was a certain public good. 
 
 4. But a single demonstration attended this great 
 and important event. In Rhode Island — an obstrep- 
 erous little commonwealth — ^"some continental bills 
 were buried with the honours of war. They were 
 enclosed in a splendid repository, and over this a 
 eulogy was pronounced as over the remains of a de- 
 parted friend and benefactor. An emission of paper 
 money had lately been made by the state; it was 
 commonly called the " red money." During the ob- 
 
 ' Pelatiau Webster. 
 
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The Revolutionary Finances. 91 
 
 sequies of the continental bills, a pithy orator held up 
 a bundle of the red money, with the expression, " Be 
 thou also ready, for thou shalt surely die !" which soon 
 happened.' 
 
 ' Sanderson ; " Life of Robert Morris.'' 
 
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92 Tlie Revolutionary Finances. 
 
 XXI. 
 
 Congress, taught by a sad and disastrous expe- 
 rience the utter inefficiency of financial management 
 by a " Board of Treasury," created a new officer. He 
 was called the Superintendent of Finance. But, 
 doubting the competency of any citizen of America tO' 
 discharge the duties of so onerous and responsible a 
 station, an appeal was made to an eminent foreigner, 
 — who, pleading his advanced age, but declaring his 
 interest in the cause of the American people, declined 
 the office. This was Dr. Price. 
 
 2. Robert Morris was elected superintendent on 
 the 21st of February 1781. He was a man of vast 
 abilities and energy, and chose as his assistant Grocr- 
 VERNEUR Morris, — a man not less able and determined 
 than himself. 
 
 3. Robert Morris, perfectly apprehending the dif- 
 ficulties and dangers of this office, and resolute not 
 to undertake it except upon conditions which would 
 make him independent and absolute in its administra- 
 tion, dictated terms which excited great opposition. 
 He insisted upon the power of appointing and dis- 
 charging all persons who received or disbursed the 
 public money. Congress protested and then yielded. 
 The whole business of finance was comprised, he said, 
 in two short and comprehensive sentences : in the first 
 place, it was to collect the revenues in the way most 
 
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The Revolutionary Finances. 93 
 
 equal and easy to the people ; in the second, to ex- 
 pend them frugally and honestly; and he required 
 ample powers to effect these objects. 
 
 4. He found himself called upon — at the very 
 threshold of office — to remedy great defects and sub- 
 stantially to reorganize the whole treasury service. 
 Prodigality was a crying public evil; he retrenched 
 with unflinching resolution. There was a multitude 
 -of unnecessary employees ; he discharged them with- 
 out fear or favour. In the places where confusion, 
 wastefulness and weakness had reigned, he introduced 
 order, economy and efficiency. He was not so for- 
 tunate, however, as — in stilted phrase — Webster in 
 later years described Hamilton to have been. At the 
 time of Morris's appointment, the rock of the public 
 credit — exhausted by repeated smitings' — stubbornly 
 refused to gush. But he drew from a fountain of 
 greater honour and glory; it was that of a superb 
 personal credit — and it did the business. The Eng- 
 lish were driven from the continent before he relin- 
 quished administration, and in a way which — though 
 marked by many painful anxieties and sufferings — is 
 yet highly satisfactory to read about; meaning, of 
 course, as to final results. 
 
 5. Washington has described the condition of the 
 army in the spring of 1781. "Instead of having 
 magazines filled with provisions, we have a scanty 
 pittance scattered here and there in the several states ; 
 instead of having arsenals well supplied with military 
 stores, we are poorly provided, and the workmen all 
 leaving them ; instead of the various articles of field 
 
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94 The Revolutwnary Finances. 
 
 equipage ready to deliver, the quartermaster-general 
 is but now applying to the several states (as the der- 
 nier ressort) to provide these things for their troops 
 respectively ; instead of a regular system of transpor- 
 tation, established upon credit or funds in the quarter- 
 master's hands to defray the contingent expenses of 
 it, we have neither one nor the other; and all that 
 business, or a great part of it, being done by military 
 impressment, we are daily and hourly oppressing the 
 people, souring their tempers and alienating their af- 
 fections. In a word, instead of having everything in 
 readiness to take the field, we have nothing, and in- 
 stead of the prospect of a glorious offensive campaign, 
 we have a bewildered and gloomy prospect of a defen- 
 sive one." 
 
 6. It is quite impracticable to exhibit in detail the 
 methods adopted by Mr. Mokkis to satisfy the 
 clamours of creditors (he found the treasury two and 
 a half millions in arrears at his entrance), and to sup- 
 ply the indispensable wants of the army. Among 
 these, however, were considerable anticipations of 
 funds provided in Europe for the service of the year 
 1782, and a prompt and extensive use of his own 
 credit and that of his friends. As an example of this 
 latter, in May — the treasury being utterly exhausted 
 — he drew upon General Philip Schuyler, then in 
 command at Albany, and Governor Lowrey, of New 
 Jersey, for one thousand barrels of flour each, for 
 which he pledged himself both as a public oflBcer anct 
 a private man to pay in hard money within two 
 months. Without immediate relief Washington would 
 
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The Revolutionary Finances. 95 
 
 have been driven to put the laws of necessity in force, 
 which it was the object of Mr. Morris to avoid and 
 prevent. "I shall make it a point to provide the 
 money," he said, "being determined never to make 
 an engagement that cannot be fulfilled ; for if by any 
 means I should fail in this respect, I shall quit my 
 office as useless from that moment." He hurried for- 
 ward as rapidly as it was possible to do, and in as great 
 quantities as were possible to be obtained, the specific 
 supplies that had been called for by Congress. The 
 Eastern States provided as abundantly as they were 
 able to do at the time, meat, salt and liquors. About 
 this time — that is to say, during the summer of 1781 
 — he undertook to furnish, during the current year, 
 all the requisitions of Congress upon Pennsylvania, 
 which consisted chiefly of flour, and were to be reim- 
 bursed out of the proceeds of taxes laid by a late act 
 of the assembly upon the people of the state. Congress 
 approved the contract as beneficial to the interests of 
 the United States; it involved the sum of one milliom 
 one hundred and twenty thousand dollars, and the- 
 supplies were furnished in anticipation before the? 
 money was obtained from the state treasury. Asi 
 fiscal agent of Pennsylvania, he so managed the paper 
 emissions of the state as to appreciate their value 
 from six for one up to two for one. He had agents at 
 all the important military stations; and though it was 
 an absolute impossibility, political and financial, to 
 supply the army as it ought to have been supplied, or 
 even to furnish it adequately with essential things, he 
 so contrived his management as to afibrd relief in the 
 7 
 
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96 The Revolutionary Finances. 
 
 hours of extremity. Had he exhibited too great re- 
 sources, the executive powers of the states would have 
 relaxed their efforts ; they did less than their share as 
 it was, and Morris was censured that he did not do 
 more ; and he was constrained by the exigencies of his 
 situation many times to deny succours that his great 
 heart would willingly have supplied had his resources 
 been equal to his wishes. " The late movements of 
 the army." he wrote on the 20th of September 1781, 
 " have so entirely drained me of money that I have 
 been obliged to pledge my personal credit very deeply, 
 besides borrowing from my friends and advancing^ to 
 promote the public service, every shilling of my own." 
 He issued his own promissory notes in large amounts 
 — in the first year of his administration to a million 
 and a half — and other notes — amounting in the aggre- 
 gate to five huiidred and eighty thousand dollars — 
 signed by himself and payable at different times out 
 of foreign funds and revenues of the United States, 
 which circulated through the states and served the 
 purposes of money. He went in person to the army 
 of General Washington to inquire into its wants. He 
 states in his diary (August 21st 1781) that while at 
 head-quarters he had constant applications for money 
 from almost everybody, as all had claims on the public 
 treasury. But in a word, arms and ammunition, pay 
 of troops and subsistence stores, were supplied upon 
 the private resources of Robert Morris. He bore 
 upon his broad and ample shoulders, to the close of 
 the war, almost the whole pecuniary burdens it en- 
 tailed, and through its most critical and important 
 
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The RevolutioThary Finances. 97 
 
 period he was its vital stay and support. It is no 
 figure of speech to aver that in his field of public duty 
 he rendered services not less valuable and splendid 
 than those even of Washington ; though it is neces- 
 sary to state that he was reimbursed for all his 
 advances. 
 
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98 The Revolutionary Finances. 
 
 XXII. 
 
 A PROJECT to which Mr. Moeeis attached pre-emi- 
 nent importance was the erection of a bank. In this 
 the busy, vigorous and capacious mind of Alexander 
 Hamilton was deeply concerned. Of course there was 
 opposition to it; in good truthi, there was opposition 
 to pretty much everything Morris undertook to do, 
 though nobody proposed to do better ; but his wishes 
 prevailed. Congress, in May 1781, authorized the 
 erection of a bank, and in December passed a formal 
 act incorporating it " for ever," under the name and 
 style of The President, Directors and Company of the 
 Bank of North America. The states of Pennsylvania 
 and Massachusetts also granted it charters — more pro- 
 perly the latter chartered a branch — and other states 
 enacted laws for its support and protection in the 
 course of the year 1782. Its capital was fixed at four 
 hundred thousand dollars, with a singular provision to 
 the effect that it should not hold property in value 
 exceeding ten millions of dollars. Subscriptions to 
 the capital were to be paid in gold or silver ; and its 
 notes, payable in cash on demand, were to be received 
 in payment of all taxes, duties and debts, due or which 
 might become due to the United States. It began busi- 
 ness on the 7th of January 1782, with a subscription 
 aggregating about seventy thousand dollars from private 
 persons [a portion of which were transferred from a 
 
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The Revolutionary Finances. 99 
 
 former subscription to the Bank of Pennsylvania, of 
 ■which mention has already been poade], and of this 
 small sum not exceeding forty thousand dollars were 
 actually paid in. " I shall do all in my power," said 
 Mr. Morris in his Diary under date of January 7th 
 1782, "to establish and support the bank, and as a 
 beginning have this day drawn my warrant on the 
 treasury for two hundred thousand dollars in part of 
 the shares I have subscribed in behalf of the public." 
 The usefulness of the bank to the government was 
 very great; not so much in the way of direct ad- 
 vances as in the accommodation of persons engaged 
 in supplying the army and in giving stability to 
 the traffic of the community. " The sudden resto- 
 ration of public and private credit which took place 
 on the establishment of the bank, was an event 
 as extraordinary in itself as any domestic occurrence 
 during the Revolution."' An ingenious historian of 
 American Bankmg Institutions, Gouge — and joined in 
 this by some others — has endeavoured to discredit the 
 services of the bank, but Morris is a better authority : 
 " It may not only be asserted but is demonstrated," 
 he said, " that without the establishment of the na- 
 tional bank, the business of the department of finance 
 could not have been performed," — for within six 
 months its advances to the government were four hun- 
 dred and eighty thousand dollars, and up to the 1st 
 of July 1783 its accommodations to government and 
 private persons were over one million. 
 
 8. The whole sums received into and paid out of the 
 continental treasury during the years 1781, 1782 and 
 
 ', Paine: " Dissertations on Government," &o. 
 
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100 The Revolutionary Finances. 
 
 1783, made a total of eight millions eight hundred and 
 one thousand seven hundred and ninety-four dollars 
 and sixty-eight cents ; that is to say, — 
 
 In 1781, . . $1,942,465.30 
 " 1782, . . 3,632,745.85 
 " 1783, . . 3,226,583,43— $8,801,794.68 
 
 9. But it must not be supposed, notwithstanding what 
 has been said in a former place concerning the influx 
 of gold and silver into the country in 1780, that the 
 transactions of the treasury were in cash. They were 
 chiefly in bills of credit of Pennsylvania and other 
 states, in the notes issued by the Bank of North Ame- 
 rica and by Robert Morris, rated at a specie value ; 
 and though the notes signed by Mr. Morris were 
 known to be government obligations, the strength of 
 his name supported them, and they did not depreciate 
 until near the close of the war, and then only slightly ; 
 and ultimately were all redeemed in good faith.' 
 
 ' Of the two hundred millions issued by Congress in continental bills 
 of credit, eighty-eight millions received into the state treasuries (at the 
 close of the war) in payment of taxes at the rate of forty for one, had 
 been replaced by bills of the " new tenour," to the amount of four 
 millions four hundred thousand dollars, bearing interest at six per cent. 
 Massachusetts, New Hampshire and Rhode Island had thus taken up 
 and redeemed their entire quotas of the old paper. Connecticut, Dela- 
 ware, the Carolinas and Georgia had taken up none ; the remaining states 
 had taken up and replaced but a part of their quotas. As to the out- 
 standing one hundred and twelve millions there was no thought of 
 redeeming that at any higher rate than seventy-five or one hundred for 
 one. Many of these were in the state treasuries, into which they had 
 come in payment of taxes, but a large amount remained also in the 
 hands of individuals. — IIildretu iii. 446. 
 
 At the time of disbanding the army three months' pay was agreed to 
 be given to the soldiers ; and they were allowed to keep their arms and 
 accoutrements as an extra allowance. This pay was to be supplied by 
 the states, but meanwhile was to bo advanood from the continental 
 
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The Revolutionary Finances. 101 
 
 XXIII. 
 
 On the 30th of October 1781, Congress called 
 upon the states for eight millions of dollars for the 
 service of the war department and the support of 
 the civil establishment in the ensuing year, to be paid 
 in equal quarterly sums, beginning on the 1st of April 
 1782. On the 4th of September 1782, a call was 
 made for twelve hundred thousand dollars, — " imme- 
 diately and absolutely necessary for the payment of 
 interest on the public debt;" and six weeks later, 
 October 16th, for a further sum of two millions of 
 dollars, for the service of the year 1783. But in an- 
 swer to these repeated requisitions, up to the 30th of 
 January 1783, less than fifteen hundred thousand dol- 
 lars [$1,486,511] had been paid into the continental 
 treasury on account of them ! . Nor, meantime, was 
 Congress derelict in the adoption of measures — such 
 miserable ones as were in their power — to support and 
 improve the public credit. In February 1781 they 
 recommended the states — as indispensably necessary — 
 to enact laws vesting in Congress "power to levy for 
 the use of the United States a duty of five per cent, 
 ad valorem, at the time and place of importation, upon 
 
 treasury in treasury notes, — a new species of paper currency, payable! 
 in six months from date, and receivable for all continental taxes. These 
 notes were signed by Robert Morris, and were finally redeemed out 
 of money borrowed by John Adams in Holland in 1784. 
 
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102 The Revolutionary Finances. 
 
 all wares, goods and merchandise imported into any 
 of the states from any foreign port, island or planta- 
 tion, arriving after the 1st of May 1781," excepting, 
 however, certain specified articles ; the moneys arising 
 from such duties to be appropriated to .the discharge 
 of the principal and interest of the debt already con- 
 tracted, or which might be contracted on the faith of 
 the United States for the support of the war; and 
 moreover, finally, with power to continue the duties 
 till the debt was fully discharged. Rhode Island ut- 
 terly refused to comply ; Virginia consented, and then 
 retracted her consent, and a third state (Georgia) 
 showed no sign of consciousness of the subject at all. 
 And Congress made a second appeal of a like kind 
 in April 1783, with a substantially .similar result. 
 
 11. These things being of no avail, the debt, re- 
 mained in a very depraved state. The interest was 
 unpaid, the public credit was as bad as that of the 
 Count Sham Shaller, and the various forms of the 
 debt, being considered of little or no value, were sold 
 by the origihal holders for an average of about one- 
 tenth their nominal value. The worst of it was, and 
 it was a painful business, the army remaiiied unpaid ; 
 and in order to prevent some very serious dangers, 
 Washington, with characteristic caution, separated it 
 as much as he could, and it was discharged without 
 tumult. 
 
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The Revolutionary Finances. 103 
 
 XXIV. 
 
 The war was in effect ended by the surrender 
 of CoKNWALLis at Yorktown in October 1781 ; but 
 it was actually ended by the -treaty between the King 
 and the States, concluded in 1782, and officially noti- 
 fied to the American army in April 1783. 
 
 Now, it is a subject for wonder, and very great won- 
 der too, that the independence of America was estab- 
 lished at all. In the first instance, because a large 
 proportion of the whole people, — certainly one-third 
 of them, and perhaps more nearly a half, — remained 
 loyal to the Crown ; many of them went into the Bri- 
 tish army, to the number of thousands;' and they 
 who did not, restrained and embarrassed the efforts of 
 the whigs in a more subtle, but perhaps equally eflFec- 
 tive way, by discrediting the currency and discourag- 
 ing in various ways the "sympathizers with the re- 
 bellion." 
 
 ,In the second instance, because of that characteris- 
 tic of the American people which Alexander Hamil- 
 ton called " an excess of the spirit of liberty." This was 
 a firm and abiding conviction of the absolute personal 
 and political equality of all the members of the com- 
 monwealth. It taught that the judgment of every 
 individual man in the state was equal to that of the 
 
 ' The " loyalists" ivho served in the British armies from the beginning 
 to the end of the war were not less than 20,000. 
 
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104 The Revolutionary Finances. 
 
 whole body of men composing it. Its method of ex- 
 pression was, universal suffrage. The fruits of the 
 doctrine were, pride of personal opinion, and an ine- 
 radicable spirit and habit of criticism of those in au- 
 thority and insubordination against them.' Of course 
 among men of this character, the necessarily strict dis- 
 cipline of a regularly organized army was impossible ; 
 and it is simply true to say that an effective discipline 
 never did exist among the continental troops. But 
 they were brave and enduring, and fortunately were 
 opposed in the main by troops not much more disci- 
 plined than themselves ; and they had the incalculable 
 advantage of fighting /oj' an idea. 
 
 Now, in the third instance, it was a most fortunate 
 circumstance that Washington was known to be un- 
 ambitious, and that he was not the possessor of a bril- 
 liant and daring genius, but that he did carry in him- 
 self those noble qualities which beget among men solid 
 convictions of respect and confidence. He cared no- 
 thing for political honours ; still less was he ambitious 
 of a crown ; he was not an overshadowing image, 
 save in moral qualities, and his conduct of the war 
 was cautious and careful, rather than enterprising and 
 splendid. Wherefore he was satisfactory to his com- 
 patriots. He escaped the jealousies and suspicions 
 which a man of vigorous action would have excited ; 
 though he did not wholly avoid imputation. It is no 
 
 ' How far universal suffrage, and the natural necessary consequences 
 which flow from a universal participation by all citizens in the po- 
 litical power of the state, are hostile to the effective discipline of 
 armies, is an inquiry well worthy the careful examination of political 
 philosophers. 
 
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The Revolutio7iary Finances. 105 
 
 matter of doubt at all that Washington alone, of all 
 the men of his time, was fitted for the leadership, and 
 that but for Washington, the revolution would have 
 failed at the end of the third year of the struggle, if 
 not sooner. 
 
 In the fourth instance, the weakness of the conti- 
 nental Congress clogged the conduct of the war at 
 almost every step. Perhaps in all history there never 
 was a body at once so powerful and so helpless as this. 
 It exercised all the powers of the national sovereignty, 
 and yet never collected a dollar of taxes in its own 
 right. It accredited, its ministers to foreign courts, 
 and received ambassadors in return, but would have 
 trembled to appoint a tax-collector in Rhode Island or 
 Delaware. It created armies, emitted money, made 
 foreign loans, and had no certain resources upon which 
 to base any one of those acts. In a word, it was a sove- 
 reign and a mendicant. 
 
 In the fifth instance, because of the disorganization 
 and inefficiency of the state governments, and of the 
 jealousies existing between them. There was a good 
 deal of fear that some one of. them would do more 
 than its share, and that some others would do less ; 
 while lethargy, and inability, and " states' rights," all 
 entered in to make up the whole sum of the public 
 difficulties. 
 
 In the sixth instance, because of the extensive 
 financial disorders and embarrassments which have 
 been but imperfectly detailed in these pages. In the 
 early years of the war, incompetent, inefficient and 
 wasteful administration; in the later years, biting, 
 pinching pcyoerty — that poverty which Robert Burns 
 
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106 The Revolutionary Finances. 
 
 has called the " half-sister of death and the cousin- 
 german of hell."' 
 
 It is, after all, to France — our most glorious and 
 noble ally, the first of the nations of modern Europe 
 notwithstanding her recent great defeat, and grander 
 and more admirable in adversity than in victory, — it 
 is to France as much as to ourselves that the Ameri- 
 can people owe their deliverance from the British 
 Crown. It was because of the French alliance that 
 Spain and Holland were embroiled in war with Eng- 
 land ; it, was because England was at war with France 
 and Spain and Holland, that she was effectually pre-, 
 vented from putting forth, upon American soil, all her 
 immense energies toward " crushing the rebellion," 
 and was finally forced to acknowledge the thirteen 
 colonies as free and independent states. And of all 
 the political events of modern history, the admission 
 of American independence has been the weightiest in 
 its effect upon the destinies of mankind ; whether for 
 good or for evil, men will be better prepared to speak 
 a century hence. 
 
 Calonne stated in 1786 that the cost of the Ameri- 
 can war to France had been fourteen hundred and 
 forty millions of francs, or two hundred and fifty-six 
 millions of dollars, — a vast sum, and one showing the 
 extent of the French efforts. The English national 
 debt was increased by the war from £123,000,000 at 
 its beginning to £238,000,000 at its close ; in dollars 
 ;about five hundred and seventy-five millions, besides 
 actual payments on account of it drawn from taxes, 
 
 1 " Poverty 1 thou half-aister of death, thou cousin-german of hell, 
 where shall I find foroe of execration equal to the aptitude of thy 
 demerits?" — Burns. 
 
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The Revolutionary Finances. 
 
 lOT 
 
 XXV. 
 
 The condition of the public finances on the 1st of 
 January 1783 was thus stated : — 
 
 Due to the Farmers-General of France , ■ , 1,000,000 livres. 
 
 Due to individuals in France in unliquidated accounts 
 estimated 3,000,000 •' 
 
 Due to the Crown of France, including a loan of 
 10,000,000 borrowed in Holland, guaranteed by 
 France . 28,000,000 " 
 
 Due. to Crown of France, loan 6,000,000 " 
 
 38,000,000 
 
 Translated into dollars at five livres eight sous per dollar 
 Due to lenders in Holland, received in part of the loan oon- 
 -tracted by John Adams, 1,678,000 florins 
 Borro*ed in Spain by John Jay 
 One year's interest on Dutch loan 
 
 Whole foreign debt . . 
 
 Loan-office certificates reduced to cash value 
 Interest unpaid 1781 . 
 " " 1782 . 
 
 Credit to sundries in treasury books 
 Army debt to 31st December 1782 
 Unliquidated debt estimated at . 
 Commutation to the army' . 
 Bounty due to privates 
 Deficiencies in 1783 supposed to be 
 
 $7,037,037 
 
 671,200 
 
 150,000 
 
 26,848 
 
 17,885,085 
 
 f 11,463,802 
 
 190,000 
 
 687,828 
 
 638,042 
 
 5,635,618 
 
 8,000,000 
 
 5,000,000 
 
 500,000 
 
 2,000,000 
 
 34,115,290 
 7,885,085 
 
 Whole debts $42,000,375 
 
 Add total of arrears on both foreign and domestic debt, on 
 account of interest • . . $2,415,956 
 
 ' The' half-pay establishment was adopted to the great offence of some 
 
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108 The RevolutioTiary Fiirmnces. 
 
 2. Ill addition to these debts of the confederation^ 
 were those of the individual states, which at the close 
 
 of the states, and these sent petitions to Oongress against the measure, 
 representing it as impolitic and unjust. In addition to the allowances 
 of Congress, the states generally made provision for their own lines. In 
 Pennsylvania, for example, the depreciation of pay was fully made up ; 
 at the sales of confiscated estates their certificates were received the 
 same as if they were hard money ; they vrere received at a hard-money 
 value at the land offices ; the interest on their certificates was for several 
 years paid ; an additional bounty of land was given to them, ready sur- 
 veyed and free from expense, and when the public debt was funded (by 
 the United States) their three per cent, and deferred debt were made 
 good by additional certificates from the state, which were afterwards 
 redeemed at from fifty to thirty per cent, in hard money. — In December 
 1782 it deputation of officers waited upon Congress and presented a 
 strong memorial from the army touching' their sufferings, and asked 
 Congress, &Tat, for some present pay ; secondly, /or a settlement of their 
 accounts and security for the balances; and thlrdly,ybr a commutation 
 of their half-pay for life, — as they found that iliat measure was odious 
 to their fellow-citizens, and would prevent the happy intercourse they 
 expected when they relumed to private life. Some present pay and a 
 settlement of accounts were immediately provided for, and as to security 
 for the balances. Congress resolved that for whatever was found due on 
 settlement, the troops of the United States had an undoubted right to 
 expect such security, and that every effort in tlieir power should be 
 made to obtain from the states substantial funds adequate to the object. 
 Touching the matter of the commutation, it was represented on the part 
 of the army that five or six years' full pay was- but a reasonable com- 
 pensation, not only on account of the deficiency in pay but on other 
 accounts ; and that it would be more agreeable to the feelings of the 
 people than that they should be pensioners for life, and they were 
 •willing to receive the commutation in certificates of debt of the United 
 States — there being no money indeed — the same as other public credit- 
 ors. It was finally determined to accede to this, but in order to prevent 
 the officers from alienating their certificates at an under rate, and so 
 injuring the public credit, it was proposed to make the commutation 
 certificates non-transferable. Whereupon the deputation asked if they 
 were not freemen, and whether they had not the same right to dispose 
 of their property as other citizens? which Congress could not gainsay, 
 and on the 22d of March 1783 resolved that the half-pay for life should 
 be commuted, and that the officers entitled to it should receive instead 
 of half-pay the sum of five years' full pay, in money or seourities'of the 
 
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The Revolntumary Finances. 
 
 ,109 
 
 ■of the war amounted to about twenty millions of dol- 
 lars. Of these, in some of the states small parts. were 
 paid interim between the end of the war and the 
 ■establishment of the government of the United States, 
 when they were assumed by the Union and fixed at an 
 aggregate of $21,500,000. 
 
 3. The whole expenses of the war were never ascer- 
 tained of course ; and they have been estimated at 
 various amounts. Thomas Jefferson's estimate was 
 1170,000,000 ; that of Mr. Geert is no doubt nearer 
 the truth; his estimate was |180;000,000. In 1790 
 the Register of the Treasury stated the cash expendi- 
 tures of the continental treasury at $92,485,693.15, as 
 follows : — 
 
 1775 "I ^ 
 
 1776 |^*«P««« 
 
 value 
 
 
 
 
 
 . 120,064,366.66 
 
 1777 " 
 
 ( 
 
 
 
 
 
 24,986,646.85 
 
 1778 " 
 
 > 
 
 
 
 
 
 24,289,438.26 
 
 1779 " 
 
 ' 
 
 
 
 
 
 10,794,620.65 
 
 1780 " 
 
 ( 
 
 
 
 
 
 3,000,000.00 
 
 1781 " 
 
 f 
 
 
 
 
 
 1,942,465.30 
 
 1782 'f 
 
 ( 
 
 
 
 
 
 3,632,745.85 
 
 1783 
 
 
 
 
 
 3,226,583.43 
 
 1784 (to Nov. Ist) 
 
 
 
 
 
 548,525.03 
 
 Total . 
 
 $92,485,693.15 
 
 To these cash disbursements were to be added 
 arrears on account of army pay, foreign ex- 
 penditures and the state debts (assumed at 
 $21,500,000) '. 42,708,009.75 
 
 Total 
 
 $135,193,703:00 
 
 tJaited States at six per cent, per annum, as Congress should find most 
 convenient, though it was left at the option of the lines of the respective 
 states either to accept or decline the commutation, — which amounted 
 to $4500 to a colonel, and $2400 to a captain. This commutation 
 system, however, was scarcely less offensive to many of the people 
 than the half-pay establishment itself. 
 
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110 Tlie Revolutionary Finances. 
 
 In this estimate of the Register are not included the 
 actual expenditures of the states, exclusive of their 
 debts. Their total emissions of bills of credit aggre- 
 gated two hundred millions (and these mainly shared 
 the fate of the continental bills), worth, at the several 
 periods of their issue, thirty-five millions ; they drew 
 in by taxes, say, six millions more, — total, forty-one 
 millions. But to these sums ought to be added the 
 natural necessary waste of the war by destruction of 
 buildings and crops, and the large subsistence of 
 troops on both sides by forced levies, and the contri- 
 butions of private persons and associations; certainly 
 not less in the aggregate than ten millions, — making 
 a grand total of one hundred and eighty-six millions. 
 
 4. But whether this sum represents the actual cost 
 of the war may well be doubted, for it seems to be 
 pretty clear that the issues of continental bills of 
 credit were materially in excess of the emissions au- 
 thorized by Congress. There were paid out of the 
 continental treasury of old and new emissions during 
 the six years the war was conduoted upon paper, of 
 the former |357,476,641 and of the latter |2,070,485 
 —total, 1359,547,126. There were authorized of the 
 former 1200,000,000 and of the latter $10,000,000. 
 There were received into the treasury from all sources, 
 that is to say — 
 
 From old emissions authorized $200,000,000 
 
 From new emissions actually paid in 2,070,485 
 
 From all other sources, including loans .... 63,289,212 
 
 $2(55,359,697 
 From emissions authorized to replace mutilated bills' . 2;),552,780 
 From emissions authorized to replace counterfeited bills . 10,000,000 
 
 $300,912,477 
 
 ' Statemo:it of TnoMAa Jefferson. 
 
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The Revolutionary Finances. * 111 
 
 The result therefore is, — Received into the treasury 
 from all sources, |300,912,477; paid out on all ac- 
 counts, $359,547,126, — excess of disbursements over 
 receipts, $58,634,649. 
 
 5. Now, interim between the peace and the inaugu- 
 ration of the Federal government, Congress had no 
 means of paying either principal or interest of the 
 debt, except by requisitions upon the states, and they 
 had no power to enforce them of course ; so that all 
 their efforts were vain. Though during the years 
 1782, '84, '85, and '86 requisitions — for payment of 
 interest — were made amounting in the aggregate to 
 16,279,376, up to the 31st of March 1787 but one mil- 
 lion ($1,003,725) had been paid into the continental 
 treasury, leaving a balance due of $5,275,650. 
 
 6. But, after all, the condition of Congress was no 
 worse than that of the states and the private people. 
 During the war, or at any rate the latter years of it, 
 the collection of debts was widely suspended, and on 
 the return of peace a flood of foreign products were 
 poured into the country, much beyond the means of 
 payment of the importers, though they drained the 
 states of their coin; then came more bills of credit 
 and severe tender laws to support them ; the upshot 
 of the whole business being that the people could not 
 pay their debts, and the courts were filled with plain- 
 tiffs and defendants, and that the states, suffering from 
 the prevailing disorders^ had more than they could do 
 to provide for their own internal administration and 
 the payment of their own debts, which they didn't 
 pay either. But a more serious difficulty was the 
 jealousies arising between the importing and the non- 
 
 8 
 
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112 The Revolutionary Finances. 
 
 importing states. The former, having convenient 
 ports, found it to their advantage to raise money by 
 duties on imported merchandises, while they who re- 
 ceived their foreign goods through this means were 
 indignant and unhappy about it, and averred that 
 they had only changed masters, and that instead of 
 being taxed by the British Parliament, they were 
 taxed by neighbouring states ; and doubtless a good 
 many of this complaining sort of people would have 
 preferred the old masters to the new. Briefly, then, 
 trade was obstructed, industry decayed and hard times 
 on all sides ; and everybody began to see that a rem- 
 edy must be applied, or that the fruits of the war 
 would be lost through internal dissensions and not 
 impossibly through internal wars. 
 
 7. All of which resulted in a convention of delegates 
 from the several states, who met to consider the pub- 
 lic disorders and devise remedies for them. These 
 framed the Constitution, which being submitted to" the 
 people or the states — nobody seems to know exactly 
 which — they, the people or the states, or both, after a 
 great deal of debate and dispute, finally ratified it, and 
 it became in theory at least — :for no merely written 
 instrument can ever become so in reality — the su- 
 preme law of the American Union. It contained one 
 important provision bearing upon thi§ history : it de- 
 clared that all the debts and engagements contracted 
 by the confederated states should be valid as against 
 the United States. 
 
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lite Revolutionary Finances. 113 
 
 XXVI. 
 
 It remains to show the mode in which the war 
 debts of the Revolution were finally settled and dis- 
 charged. 
 
 2. The government of the United States was or- 
 ganized by the inauguration of President Washington 
 at New York, April 30th 1789. The treasury depart- 
 ment was established by the act of September 2d sub- 
 sequent, and on the 11th of September Alexander 
 Hamilton was appointed Secretary. On the 9 th of 
 January 1790 Mr. Hamilton informed the House of 
 Representatives of his readiness to submit plans for 
 the support of public credit. This notice gave instant 
 rise to a somewhat excited debate touching the mode 
 in which the Secretary should communicate with the 
 House, — whether by written report or oral statement. 
 The unreasoning terror of monarchy' which in those 
 days prevailed among all classes and conditions of 
 Americans, triumphed over what would seem to be 
 
 ' During and since the war of the rebellion, efforts have been made to 
 change the law, so that the Secretary of the Treasury may personally 
 appear in the House of Representatives and explain his "budget" and 
 his plans. But the prejudices of revolutionary times, in this matter 
 of real importance, seem still to reign paramount. 
 
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114 The Revolutionary Finavr.es. 
 
 the good sense of the thing, and he was directed to 
 report in writing, which he accordingly did. 
 
 3. In that important paper the Secretary carefully 
 reviewed the origin of the debt and the terms upon 
 which it had been contracted, and elaborately argued 
 the methods by which he proposed its payment should 
 be effected. Touching the foreign debt, no difference 
 of opinion existed, either in Congress or out, as to the 
 precise obligations it involved*. It was quite otherwise 
 with respect to the domestic debt. That was already 
 the subject of a virulent excitement and controversy ; 
 and it had been strenuously insisted by a large party 
 in the country — headed in Congress by Mr. Madison 
 — that there ought to be a discrimination between the. 
 original holders and the present possessors by purchase. 
 Mr. Hamilton combated these views with vigorous 
 and invincible arguments, and declared that such a 
 discrimination would be unjust, impolitic, highly inju- 
 rious even to the original holders, and ruinous to the 
 public credit. The project of discrimination was after 
 a long debate rejected. But a second question, and 
 one of far greater importance, arose upon a proposal 
 that the debts of the individual states should be 
 assumed by the United States. It was debated with 
 great feeling and vehemence ; the excitement spread 
 throughout the country, and reached a pitch of anger 
 and violence which seriously threatened the stability 
 of the Union. " This is a measure," said an eminent 
 leader in the opposition, " which has not only agitated 
 Congress, but it has more or less convulsed the whole 
 people of the United States. It has elated speculators 
 
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The Revolutionary Finances. 115 
 
 and state brokers, while it has depressed three-fourths 
 ■of the honest part of the community. It has held out 
 alluring prospects of fortune to the one, while it has 
 blasted and withered the just expectations of the 
 other. It has been the, centre-pin of visionary pro- 
 jectors, but its future effects are viewed with horror 
 by disinterested men." But Hamilton urged the mea- 
 sure upon the score alike of policy and justice. A 
 provision for the state debts emanating from one 
 authority, he asserted, would be more eflFectual than 
 when coming from several authorities, and the revenue 
 required in either case would be the same. Collision 
 and confusion would be prevented, and the public 
 creditors receiving their dues from a single source, 
 distributed with an equal hand, would have a com- 
 mon interest in supporting the • fiscal arrangements of 
 the government. It was hence the interest of the 
 ■creditors of the Union " that those of the states should 
 be comprehended in a general provision. Neither 
 would it be just that one class of public creditors 
 should be more favoured than the other. The objects 
 for which both debts were contracted were the same ; 
 indeed, a great part of the state debts had arisen from 
 assumptions by them on account of the Union." But 
 however just these views of Mr. Hamilton, the rock 
 ■of the national resources would not have responded to 
 his touch but for the intervention of Thomas Jeffer- 
 son, who — being by nature and habit an intriguer — 
 brought about a compromise which resulted in the 
 substantial adoption of Hamilton's plans. 
 
 4. With respect to the arrears of interest, Hamilton 
 
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116 The Recolutionary Finances. 
 
 contended that they were entitled to an equal provi- 
 sion with the principal of the debt. 
 
 5. He considered the whole debt in the light of an 
 annuity, bearing interest at the rate of six per cent, 
 per annum, redeemable at the option of the govern- 
 ment upon payment of the principal ; and proposed 
 five diflferent plans of loans to be at the election of the 
 creditor. The first of these proposed to pay the cre- 
 ditor one-third' of his claim in western lands. With 
 respect to the foreign debt, the Secretary was of opinion 
 that it ought to be paid with new loans obtained 
 abroad ; and for the payment of interest and the cur- 
 rent service of government, he thought additional du- 
 ties might be laid on wines, spirits, teas and coffees. 
 And while he was persuaded that the proper funding 
 of the existing debt would render it a national bless- 
 ing, yet he was far from acceding to the position, in 
 the latitude in which it was sometimes laid down, that 
 "public debts are public benefits," — a position inviting 
 to prodigality and liable to dangerous abuse, — and he 
 ardently wished it established as a fundamental maxim 
 in the system of public credit of the United States, 
 that the creation of debt should always he accompanied 
 with the means of extinguishment. He regarded this as 
 the true secret for rendering public credit immortal. 
 He proposed, therefore, that the net product of the 
 post-office establishment to an amount not exceeding 
 one million of dollars yearly should be vested in com- 
 missioners, to be applied by them to the discharge of 
 the public debt until the whole should be paid. 
 
 6. He thus stated the debt as it then existed : — 
 
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The Revolutionary Finances. 117 
 
 The Foreign Debt. 
 
 Amount of the principal 110,070,307.00 
 
 Arrears of interest to 31st December 1789 . . . 1,640,071.62 
 
 Making together $11,710,378.62 
 
 The Domestic Debt. 
 
 Principal of the liquidated part $27,383,917.74 
 
 Arrears of interest to 31st December 1790 . . . 13,030,168.20 
 
 Making together $40,144,085.94 
 
 The unliquidated part of the domestic debt, which con- 
 sists chiefly of continental bills of credit, not ascer- 
 tained but estimated at $2,000,000.00 
 
 These several sums constituting the whole debt . . $54,124,464.56 
 The debts of the individual states were not ascertained, 
 but they were estimated by the Secretary, principal 
 and interest, at $25,000,000.00 
 
 Whole estimated amount of debt . . $79,124,464.56 
 
 7. The Secretary said also that he contemplated the 
 ■erection of a National Bank,' for which, with the 
 permission of the House, he would submit a plan in 
 the course of the session. 
 
 ' Mr. Hamilton submitted his plan for a national bank, as he threat- 
 ened to do, December 13th 1790 ; and it also excited a virulent debate, 
 in the course of which Mr. Madison made his celebrated speech discussi 
 ing the doctrine of " implied powers." Thomas Jeffekson opposed it 
 with great bitterness ; but the bank was authorized by the act of Feb- 
 ruary 25th 1791, under the name and style of " The President, Directors 
 and Company of the Bank of the United States." The capital was fixed 
 at ten millions of dollars, and the President was authorized to subscribe 
 towards the said capital, on behalf of the United States, not exceeding 
 two millions ; and the bills or notes of the bank, payable in gold or 
 silver on demand, were to be receivable in payment of all dues to the 
 government. Its privileges were to cease on the 4th of March 1811. 
 Like all of Hamilton's bills prepared for the action of Congress, this 
 one also contained a preamble, which alleged, among other things, that 
 the bank would be "conducive to the successful conducting of the 
 national finances, and tend to give facility to the obtaining of loans for 
 
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118 TM Revolutionary Finmices. 
 
 XXVII. 
 
 The act of Congress, approved March 4th 1790, 
 begins with a preamble which recites that "justice 
 and the support of the pubHc credit require that pro- 
 
 the use of the government in sudden emergencies," besides being pro- 
 ductive of advantage to trade and industry in general. 
 
 Here iire words of wisdom from Hamilton's report on a national 
 bank, which may serve to moderate the enthusiasm of some of those 
 paper money advocates who "imagine vain things" of that profound 
 and most admirable statesman. 
 
 The emitting of paper money, he says, liy the authority of govern- 
 ment is wisely prohibited to the individual states by the national consti- 
 tution ; and the spirit of that prohibition ought not to be disregarded 
 by the government of the United States. Though paper emissions 
 under a genera] authority might have some advantages not applicable, 
 and be free from some disadvantages which are applicable to the like 
 emissions by the states separately, yet they are of a nature so liable to 
 abuse — and, it may even be affirmed, so certain of being abused — thatr 
 the wisdom of the government will be shown in never trusting itself 
 with the use of so seducing and dangerous an expedient. In times of 
 tranquillity it might have no ill consequence ; it might even perhaps be 
 managed in a way to be productive of good, but in great and trying^ 
 emergencies there is almost a moral certainty of its becoming mischiev- 
 ous. The stamping of paper is an operation so much easier than the 
 laying of taxes, that a government in the practice of paper emissions 
 would rarely fail, in any emergency, to indulge itself too far in tbe 
 employment of that resource to avoid, as much as possible, one less 
 auspicious to present popularity. If it should not even be ciirriod so 
 far as to be rendered an absolute bubble, it wouW at least be likely to 
 be extended to a degree which would occasion an inflated and artifioini 
 state of things, incompatible with the regular and prosperous course of 
 the political economy. — [Alexanoer Hamilton's Report on a National 
 Bank, communicated to the House of Representatives December 13th 
 1790.] 
 
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The Revolutionary Finances. 119 
 
 vision should be made for fulfilling the engagements 
 of the United States, in respect of their foreign debt, 
 and for funding their domestic debt upon equitable 
 and satisfactory terms." And accordingly provision is 
 thus made : 
 
 2. After reserving out of the yearly income of the 
 customs and tonnage duties six hundred thousand dol- 
 lars, for the support of the government of the United 
 States and " their common defence," the residue of the 
 funds so derived were appropriated to the payment of 
 the interest on the foreign loans already made or which 
 might be made in the future, and the whole or any 
 part of the principal of the debt; and the President 
 was authorized "to cause to be borrowed" not exceed- 
 ing twelve millions of dollars, so much of which as 
 was necessary to the purpose to be devoted to the pay- 
 ment of the arrears of interest on the foreign debt, and 
 the remainder to the discharge of the principal. But 
 the President was not to make any contract or engage- 
 ment which should preclude the United States from 
 reimbursing any sums borrowed under this authority 
 within fiifteen years. 
 
 3. And a loan of the full amount of the domestic 
 debt was also authorized; and in payment of subscrip- 
 tions thereto the commissioners of loans were author-^ 
 ized to receive the various certificates which had been 
 issued on account of the continental debt, including 
 the bills of credit at the rate of one hundred dollars 
 in bills for one in cash. The interest on this portion 
 of the debt was fixed at six per cent., and the princi- 
 pal was subject to redemption at the election of the 
 government, in payments not exceeding in one year, 
 
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120 The Revolutionary Finances. 
 
 on account of both principal and interest, the propor- 
 tion of eight dollars upon every hundred ; but upon 
 one-third of the debt, or thirty-three and one-third 
 dollars in each hundred, the payment of interest did 
 not begin until the year 1800. The interest on sub- 
 scriptions paid in "indents of interest" was fixed at 
 three per cent, per annum, and the principal was to be 
 redeemable at any time at the election of the govern- 
 ment. 
 
 4. The debts authorized to be assumed on account 
 of the several states were as follows : New Hampshire, 
 three hundred thousand dollars; MassachusettSj four 
 millions of dollars ; Rhode Island, two hundred thou- 
 sand dollars; Connecticut, one million six hundred 
 thousand dollars ; New York, one million two hun- 
 dred thousand dollars; New Jersey, eight hundred 
 thousand dollars ; Pennsylvania, two million two hun- 
 dred thousand dollars ; Delaware, two hundred thousand 
 ■dollars ; Maryland, eight hundred thousand dollars ; 
 Virginia, three million five hundred thousand dollars ; 
 North Carolina, two million four hundred thousand 
 dollars ; South Carolina, four millions of dollars ; and 
 Georgia, three hundred thousand dollars." 
 
 5. And the faith of the United States was pledged 
 to provide and appropriate permanent funds for the 
 payment of the interest on the stocks created in pur- 
 suance of the act. 
 
 ' 6. The total debt of the United States on the 1st 
 of January 1791 was — 
 
 ' The sum of the state debts to be assumed by the United States was 
 estimated by Hamilton at $21,5U0,IJ00; the sum aolually assumed was 
 $18,328,186.21. 
 
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The Revolutionary Finances. 121 
 
 1. Foreign debt $12,812,831.92 
 
 2. Domestic debt 
 
 Six per cent, and deferred stocks .... 1,143,106.28 
 
 Three per cent, stock ' 425,911.33 
 
 Unfunded debt 61.081,626.99 
 
 Making altogether $75,463,476.52 
 
 But deduct payments on account of subsequent years to 
 
 amount of 293,502.31 
 
 Actual total of debt 175,169,974.21 
 
 The foreign debt was due, $7,561,449.42 to Prance; 
 $250,382.50 to Spaing and $5,001,000.00 to Holland. 
 
 7. Between 1791 and 1795, and including those 
 years, the debt due to France was discharged with 
 moneys borrowed in Holland, as was also that due 
 to Spain, which was paid in 1792 and 1793. The 
 whole foreign debt on thfe 1st of January 1796 was 
 $11,939,000, and bore interest at four and four and 
 one-half per centum per annum ; was wholly due in 
 Holland; and was finally extinguished in the year 
 1810. 
 
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122 The Revolutionary Finances. 
 
 XXVIII. 
 
 With respect to the domestic debt of the United 
 States, a fund was created for its redemption, which 
 was placed under the management of the Vice-Presi-. 
 dent, the Chief Justice of the Supreme Court, the Sec- 
 retary of State, the Secretary of the Treasury and the 
 Attorney-General, who were constituted the " Commis- 
 sioners of the Sinking Fund." This was by act of 
 Congress August 12th 1790. In March 1795 an act 
 was passed making further provision for the redemp- 
 tion of the debt. It provided for the creation of a 
 fund out of certain specified branches of the revenues 
 of the government, which was pledged inviolably to 
 remain and be appropriated and vested in the Commis- 
 sioners of the Sinking Fund as " property in trust," 
 until tlie whole debt should be fully and completely 
 paid ; ,and all priorities before established with respect 
 to the different portions of it were to cease unless the 
 creditor signified his dissent in writing, — so that the 
 whole sums appropriated towards the payment of the 
 debt should constitute a common fund, chargeable 
 without distinction for the benefit of all the public 
 creditors. 
 
 2. Payments on account of the debt were steadily 
 made, and it was constantly reduced in amount until, 
 on the Istof January 1812, its total was but $45,035,- 
 
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The Revolutionary Fiimnces. 123 
 
 123.70, and was inclusive of fifteen millions borrowed 
 in 1803' to pay the Louisiana purchase. The war of 
 1812 added largely to the debt; on the 1st of Janu- 
 ary 1816 it was 1123,016,375; on the 30th Septem- 
 ber 1820 it was stated at $91,225,560, of which sum 
 $20,570,627 was of the debt contracted before the 
 year 1812. 
 
 3. " If Providence permits me to meet you in an- 
 other session," said President Jackson in his message 
 of December 1833, "I shall have the high gratification 
 of announcing to you that the national debt is extin- 
 guished. I cannot refrain from expressing the pleas- 
 ure I feel at the near approach of that desirable event. 
 The short period of time within which the public debt 
 will have been discharged is strong evidence of the 
 abundant resources of the country, and of the prudence 
 and economy with which the government has hereto- 
 fore been administered. "We have waged two wars 
 since we became a nation, with one of the most pow- 
 erful kingdoms in the world ; both of them undertaken 
 in defence of our dearest rights — both successfully 
 prosecuted and honourably terminated; and many of 
 those who partook in the first struggle, as well as the 
 second, will have lived to see the last item of the debt 
 incurred in those necessary but expensive conflicts 
 faithfully and honestly discharged ; and we shall have 
 the proud satisfaction of bequeathing to the public 
 servants who follow us in the administration of the 
 government, the rare blessing of a revenue sufficiently 
 
 ' At this time $38,035,564 of the debt wa8 held in the United StatPS 
 and $32,119,210 in foreign countries. The number of stockholders in 
 the United States was 14,236. 
 
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124 The Revolutionary Finances. 
 
 abundant, raised without injustice or oppression to our 
 citizens, and unencumbered with any burdens but 
 what they themselves shall think proper to impose 
 upon it." 
 
 4. In his message to Congress December 7th 1835, 
 President Jackson announced that the debt had been 
 finally redeemed, and added that it was expected that 
 at the close of the current year there would remain in 
 the treasury an unappropriated balance of nearly 
 eleven millions of dollars. 
 
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The Revolutwnary Finances. 
 A. 
 
 125 
 
 A TABLE 
 Showing the amount of Bills of Credit authorized by the Continental 
 Congress during the War of the Revolution. Communicated to the 
 House of Representatives, January 30th, 1828, by Joseph Nourse, 
 Register of the Treasury. 
 
 Date of CiongresBiODal ResolTe. TiA. ' Page. 
 
 1775. June 22, . 1 125 
 July 25, 1 177 
 November 29, 1 273 
 
 1776. February 17, 2 66 
 May 9 and 27, 2 164 
 July 22 and Aug. 13, 2 280, 308 
 Nov. 2 and Deo. 28, 2 440, 509 
 
 1777. Febrnaty 26, 3 80 
 May 20, 3 194 
 August 15, 3 331 
 November 7, 3 480 
 December 3, 3 555 
 
 1778. January 8, 4 12 
 January 22, 4 47 
 February 16, 4 101 
 March 5, 4 133 
 April 4, 4 190 
 April 11, 4 209 
 April 18, 4 223 
 May 22, 4 303 
 June 20, 4 362 
 July 30, 4 434 
 September 5, 4 521 
 September 26, 4 587 
 November 4, 4 639 
 December 14, 4 713 
 
 1779. February 3, 5 43 
 February 19, 5 64 
 April 1, 5 132 
 May 5, 5 183 
 January 4 and May 7, 5 84, 188 
 June 4, 5 240 
 July 17, 5 288 
 July 17, 5 289 
 September 17, 5 360 
 September 17, 5 360 
 October 14, 5 384 
 November 17, 5 419 
 November 17, 5 420 
 November 29, ' 5 ' 438 
 
 Amount authorized. 
 
 12,000,000 
 
 1,000,000 
 
 3,000,000 
 
 4,000,000 
 
 5,000,000 
 
 5,000,000 
 
 5,000,000 
 
 5,000,000 
 
 5,000,000 
 
 1,000,000 
 
 1,000,000 
 
 1,000,000 
 
 1,000,000 
 
 2,000,000 
 
 2,000,000 
 
 2,000,000 
 
 1,000,000 
 
 5,000,000 
 
 500,000 
 
 5,000,000 
 
 5,000,009 
 
 5,000,000 
 
 5,000,000 
 
 10,000,000 
 
 10,000,000 
 
 10,000,000 
 
 5,000,160 
 
 5,000,160 
 
 5,000,160 
 
 10,000,100 
 
 50,000,100 
 
 10,000,500 
 
 5,000,180 
 
 10,000,100 
 
 5,000,180 
 
 10,000,180 
 
 5,000,180 
 
 5,000,040 
 
 5,050,500 
 
 10,000,140 
 
 $241,552,780 
 
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126 The Revolutionary Fincmces, 
 
 B. 
 
 Thomas Jefferson's Table. 
 
 Date of Authority. 
 
 Sum emiittd. 
 
 DipneiiUim. 
 
 QUh value. 
 
 1775. June 23, 
 
 $2,000,000 
 
 
 $2,000,000 
 
 November 29, 
 
 3,000,000 
 
 
 3,000,000 
 
 1776. February 17, 
 
 4,000,000 
 
 
 4,000,000 
 
 August 13, 
 
 5,000,000 
 
 
 5,000,000 
 
 1777. May 20, 
 
 5,000,000 
 
 2,2,3 
 
 1,877,273 
 
 August 15, 
 
 1,000,000 
 
 3 
 
 333,333^ 
 
 November 7, 
 
 1,000,000 
 
 4 
 
 250,000 
 
 December 3, 
 
 1,000,000 
 
 4 
 
 250,000 
 
 1778. January 8, 
 
 1,000,000 
 
 4 
 
 250,000 
 
 January 22, 
 
 2,000,000 
 
 4 
 
 500,000 
 
 February 16, 
 
 2,000,000 
 
 5 
 
 400,000 
 
 March 5, 
 
 2,000,000 
 
 5 
 
 400,000 
 
 April 4, 
 
 1,000,000 
 
 6 
 
 166,666| 
 
 April 11, 
 
 5,000,000 
 
 6 
 
 833,333i 
 
 April 18, 
 
 500,000 
 
 6 
 
 88,333^ 
 
 May 22, 
 
 5,000,000 
 
 5 
 
 1,000,000 
 
 June 20, 
 
 5,000,000 
 
 4 
 
 1,250,000 
 
 July 30, 
 
 5,000,000 
 
 4i 
 
 1,111,111 
 
 September 5, 
 
 5,000,000 
 
 5 
 
 1,000,000 
 
 September 26, 
 
 10,000,100 
 
 5 
 
 2,000,020 
 
 November 4, 
 
 10,000,100 
 
 3 
 
 ],666,683i 
 
 December 14 
 
 10,000,100 
 
 6 
 
 1,666,683| 
 
 1779. January 14, 
 
 '24,447,620 
 
 8 
 
 3,05o,y52i 
 
 Febrbary 3, 
 
 5,000,160 
 
 10 
 
 500,016 
 
 February 12, 
 
 5,000,160 
 
 10 
 
 500,016 
 
 April 2, 
 
 5,000,160 
 
 17 
 
 294,127 
 
 May 5, 
 
 10,000,100 
 
 24 
 
 416,6704 
 
 June 4, 
 
 10,009,100 
 
 20 
 
 500,005 
 
 June 17, 
 
 15,000,280 
 
 20 
 
 750,014 
 
 September 17, 
 
 15,000,260 
 
 24 
 
 625,0101 
 
 October 14, 
 
 5,000,180 
 
 30 
 
 166,67i;| 
 
 November '17, 
 
 10,050,540 
 
 ^^ 
 
 261,053 
 
 November 29, 
 
 10,000,140 
 
 38i 
 
 259,743 
 
 $200,000,000 $36,367,7191 
 
 (') The sum actually voted was $50,000,400, but part of it was for 
 exchange of old bills, without saying how much. It is presumed that 
 these exchanges absorbed $25,552,780, because $24,447,620, with all the 
 other emissions preceding September 2d, 1779, will amount to $159,- 
 948,880, the sum which Congress declared to be then in circulation. 
 
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The Revohdionary Fiymnces. 
 
 127 
 
 C— TABLE OF ISSUES BY THE SEVERAL COLONIES. 
 
 n 
 
 1 
 
 f3,868,000 
 
 714,600 
 
 1,516,500 
 
 1,161,250 
 
 1,618,000 
 
 4,325,000 
 
 146,500 
 
 950,000 
 
 128,441,000 
 
 33,325,000 
 
 33,458,926 
 
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128 The Revohitionary Finances. 
 
 D. 
 
 A TABLE OF THE DEPRECIATION OF CONTINENTAL BILLS. 
 Compiled froh Merchants' Books at PBiLxnELPHiA. 
 
 1777 
 
 1778 
 
 ii 
 
 4 
 
 H 
 
 5 
 
 % 
 
 5 
 
 n 
 
 6 
 
 n 
 
 5 
 
 n 
 
 4 
 
 3 
 
 4 
 
 3 
 
 6 
 
 3 
 
 5 
 
 3 
 
 5 
 
 3 
 
 6 
 
 4 
 
 6 
 
 1779 
 
 1780 
 
 1781 
 
 January, . 
 February, . 
 March, . . 
 April, . . 
 May, . . 
 June, . . 
 July, . . 
 August, 
 September, 
 October, 
 November, 
 December, 
 
 7,8,9 
 
 10 
 
 10, 11 
 
 \1\, 16, 14, 22 
 
 22, 24 
 
 22, 20, 18 
 
 18, 19, 20 
 
 20 
 
 20,28 
 
 30 
 
 32,45 
 
 45,38 
 
 40, 45 
 
 45, 55 
 
 60,65 
 
 60 
 
 60 
 
 69 
 
 60, 65 
 
 65,75 
 
 75 
 
 75,80 
 
 SO, 100 
 
 100 
 
 100 
 100, 120 
 120, 135 
 135, 200 
 200, 500 
 
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