Revolutionary War Historical Article

Continental Money

by Benson J. Lossing

Editor's Note: This article was reprinted from the March 1863 Edition of Harpers New Monthly Magazine

The second Continental Congress assembled at Philadelphia on the 10th of May, 1775. Blood had been shed at Lexington and Concord; and an army of New England Minutemen were rapidly gathering around Boston, determined to keep the British invaders within the narrow limits of that peninsula, or to drive them into the sea. On that very morning patriotic men had seized the strong fortress of Ticonderoga, in the "name of the Great Jehovah and the Continental Congress." War had actually begun. The colonies had taken a stand, and could not in safety or honor recede. For more than ten years they had pleaded for justice, and had been met with words of scorn and deeds of greater oppression. They accepted the dreadful alternative with courage and a Christian spirit. With the drawn sword they carried the olive branch of reconciliation, equally ready to offer either, as circumstances might determine.

The developed and undeveloped resources of the country were great, but the long- pending quarrel had unsettled trade and produced widespread confusion. War is wasteful and expensive. One of the chief sinews of its strength is Money. To provide this was the first care of the representatives of the people in Congress assembled. There was very little specie (i.e. coin) in the country, so they resolved to create Paper Money. On the first day of the session, in secret consultation, this measure was determined upon.

Facsimile of Continental Bills

It was resolved to boldly pledge the faith of the United Colonies for the redemption of the bills that might be issued. The subject was carefully considered; and a committee was appointed to carry the measure into effect. They employed Smithers, a gun-engraver (who had come to Philadelphia, from England, two years before), to prepare the plates. It is believed that Paul Revere engraved some of the later ones. They were rude specimens of art. The ornamental portions were engraved on type-metal, in the style of wood engraving, which would be introduced into this country by Doctor Anderson twenty years afterward; while the body of the lettering was in common movable type. It was necessary to have them prepared so as to be used on a common printing press, because of the large quantity that might be required. A representation of a group of these bills, precisely in the form and size as the originals, may be seen in the above illustration. To prevent counterfeiting, rude devices and private marks, very difficult to imitate, were printed and pasted on the back of the bills, making them about as thick as common playing cards. The device was generally a branch with leaves, and sometimes a leaf or leaves only. These were accompanied by the names and addresses of the printers, and the year of their issue.


Back of a Continental Bill
click to see larger image

The most important requisite for success in the experiment of carrying on a war by means of a paper currency was to make it command the public confidence and to secure it from depreciation, the evils of which had been already felt in the various colonies. The Convention of New York had gravely considered this subject, and through a committee of that body made some suggestions to the Continental Congress. They proposed three distinct modes of issuing paper money, namely: that each colony should issue for itself the sum which might be appropriated to it by Congress; secondly, that the United Colonies should issue the whole sum necessary, and each colony become bound to sink its proportional part; and thirdly, that Congress should issue the whole sum, every colony be bound to discharge its proportion, and the United Colonies be obliged to pay that part which any colony should fail to discharge.

The Continental Congress adopted, substantially, the last proposition. On the 3rd of June, George Washington, Philip Schuyler, Silas Deane, Thomas Cushing, and Joseph Heaves, were appointed a committee "to bring in an estimate of the money to be raised." Within a fortnight afterward the troops at Boston, under General Artemas Ward, were adopted as a "Continental Army," and George Washington was appointed General-in-Chief. On the 17th of June the battle of Bunker’s Hill was fought; and on the 22rd, the day when the news of that conflict reached Philadelphia, the Congress resolved "That a sum not exceeding two millions of Spanish milled dollars he emitted by the Congress in bills of credit, for the defense of America," and, "That the twelve confederated colonies [Georgia was not then represented] be pledged for the redemption of the bills of credit, now directed to be emitted." Each colony was required to pay its proportion in four annual payments, the first by the last of November, 1779, and the fourth by the last of November, 1782. On the following day a committee appointed for the occasion reported and offered the following resolutions, which were adopted:


Resolved, That the number and denomination of the bills be as follows:
49,000 bills of 8 dollars each ……………………$192,000
49,000 bills of 7 dollars each ……………………..343,000
49,000 bills of 6 dollars each ……………………..294,000
49,000 bills of 5 dollars each…………………….. 245,000
49,900 bills of 4 dollars each ……………………..196,000
49,000 bills of 3 dollars each…………………….. 147,000
49,000 bills of 2 dollars each……………………….98,000
49,000 bills of 1 dollar each ……………………….49,000
11,800 bills of 20 dollars each …………………… 236,000
403,800 .................................. Totals ......................$2,000,000

Resolved, That the form of the bill be as follows:

No---------------------                      ----------------- Dollars.

This bill entitles the bearer to receive -------- SPANISH MILLED DOLLARS,
or the value thereof in gold or silver, according to the resolutions of
Congress, held at Philadelphia on the 10th day of May, A.D. 1775.

John Adams, John Rutledge, James Duane, Benjamin Franklin, and James Wilson were announced as a committee to get proper plates engraved, to provide paper, and to bargain for the printing of the bills. This announcement was the first public revelation of the existence of a committee appointed for such a purpose. They had already, as we have observed, under instructions in secret session, made preliminary preparations for the measure by having plates engraved for some if not all of the denominations above-mentioned. Richard Bache, Stephen Paschall, and Michael Hillegas, were subsequently appointed a committee to superintend the printing of the bills; and twenty-eight citizens of Philadelphia were authorized and employed by the Congress to sign and number them, the names of two upon each bill being necessary. Each signer was allowed one dollar and one-third for each and every thousand bills signed and numbered by him.

It will be observed that in the first issue of Continental Bills the denominations were 1, 2, 3, 4, 5, 6, 7, 8, and 20 dollars. Each denomination had a different device and motto, as exhibited in the accompanying engravings, which are careful copies of the originals.


Thumbnail of 1-dollar bill,
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On the 1-dollar bill is a picture of the acanthus plant, sprouting up around all sides of a basket that rests upon it and is pressed down with a weight. This device illustrates the ancient legend of the origin of the Corinthian capital in architecture. The motto DEPRESSA RESURGIT translated "Though pressed down it rises again," gave words of encouragement to the struggling colonists, assuring them that, notwithstanding present oppressions, they should not be destroyed — that their industry, forced into new courses, would increase the prosperity of the country; and that with liberty America would yet appear in the strength and beauty of a Corinthian column.


Thumbnail of 2-dollar bill,
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On the 2-dollar bill is the figure of a hand with a flail over sheaves of wheat on a Threshing floor, and the motto TRIBULATIO DITAT –— translated "Affliction enriches," or, as applied in the device and under the circumstances, "Threshing improves it" — brings out its best qualities. It was intended to admonish the colonists that, although then under the flail, and suffering hard blows, the discipline would be an advantage that out of the husks would be brought the grain of virtues and abilities requisite to make them a prosperous nation; that the public distresses, arising from war, would make them more frugal and industrious, and give them habits which would be forever beneficial. Thus by affliction they would be enriched. They were taught to remember that "Affliction is the wholesome soil of virtue, where patience, honor, sweet humanity, calm fortitude take root and strongly flourish."


Thumbnail of 3-dollar bill,
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On the 3-dollar bill is the representation of a combat between an eagle and a crane. The eagle on the wing has pounced upon the inferior bird; but the latter, moved by the natural law of self-preservation, turns upon the aggressor and receives him on the point of his long bill that pierces the eagle’s breast. The motto EXITUS IN DUBIO —translated "The end is in doubt" or "The result is uncertain" —- is explained by the device. The eagle represents Great Britain and the crane represents America. The motto admonishes both not to be too sanguine. The crane (America) is warned not to count too much upon the success of its endeavors, such as petitions, remonstrances, negotiations, etc., but to use those means which God has placed in its power. The eagle (Britain) is admonished not to presume too much on its superior strength, as a weaker bird may wound it mortally.


Thumbnail of 4-dollar bill,
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On the 4-dollar bill is the picture of a wild boar rushing upon the hunter’s spear. The outline square in the engraving shows the form of a stamp in red ink, which appears on many of the bills. The motto AUT MORS AUT VITA DECORA is translated "Either death or an honorable life." The boar is an animal of great strength and courage, but inoffensive while left undisturbed in the enjoyment of his freedom. When roused he sometimes turns furiously upon the hunter and makes him pay dearly for his temerity in commencing the attack. This was the then condition of the colonies—they preferred death to slavery. "We have counted the cost of this contest," they said, in Congress, "and find nothing so dreadful as voluntary slavery."


Thumbnail of 5-dollar bill,
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On the 5-dollar bill is an open hand attempting to grasp a thorny bush, and made to bleed profusely by the sharp spines of the plant. The motto is SUSTINE VEL ABSTINE — "Sustain or abstain" — either support or leave me — bear with me or let me alone. The thorn bush represents America, and the bleeding hand Great Britain, vainly endeavoring to crush or eradicate a people armed for their defense.


Thumbnail of 6-dollar bill,
click to see larger image

On the 6-dollar bill is the figure of a beaver gnawing down a large tree. The motto is PERSEVERANDO "By persevering." The tree symbolizes Great Britain in the contest, strong and overshadowing, claiming the right to tax the colonies at pleasure, and crush their industry by unjust navigation laws and monopolies of trade. The beaver, assiduous, steady, and faithful, represents the Americans, determined by steady and persevering resistance not only to defend themselves, but to weaken the power of the oppressor by cutting off the American colonies from the realm. The beaver, by patient application, may subdue the largest tree; so might the colonies, by patient industry and courage, subdue the colossal power of the British. This was the argument of the device.


Thumbnail of 7-dollar bill,
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On the 7-dollar bill is the picture of a heavy storm. The rain is pouring upon the earth from black clouds, yet there is a bit of clear sky seen in the distance. The motto is SERENABIT — "It will clear up." —This is addressed to those who felt dejected and saw little hope for serenity in the future in the midst of the storm of war then brooding over the land. It was intended to remind them of the adage —"After a storm comes a calm"— to assure them that bright skies were beyond.


Thumbnail of 8-dollar bill,
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On the 8-dollar bill is a harp with thirteen strings, and the motto MAJORA MINORIBUS CONSONANT — "The greater and the smaller ones sound together." — The strings of the harp are of different lengths, yet they compose one instrument in a strong frame, and sound in harmony. This was intended to represent the new government under the Continental Congress, composed of provinces of various size and strength, but all working in harmony for the general good — made united in strength and purpose by the framework of the Congress.


Thumbnail of 20-dollar bill,
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On the 20-dollar bill is the rude representation of a tempestuous ocean. Above it, in the clouds is seen a face, from which are lines representing the furious blowing of wind upon the waters, whose waves impelled by it, are rolling all one way. (The original from which the engraving was made is very dim, and upon the face of the device is a diamond-shaped patch of red color stamped on. Because of the dimness of the original, the artist did not see the cloud and has omitted it.) The motto on the bill is VI CONCITAE —"Driven by force," or "Raised by Great Calm" — constrained by necessity. Great calm waters always symbolized the people; and waves indicated the people in insurrection or rebellion. This device and motto imply that the people were inclined to be still, and that the commotion does not arise from any internal cause. It is external, and is represented by the head of Aeolus, the god of the winds, and the cloud, which symbolizes, in this instance, the British Parliament. The waves rolling in one direction denote that the force that raises them has produced unanimity in their action. - On the reverse of this bill is seen a smooth sea; the sails of a ship hanging loosely and denoting a calm; the sun shining in splendor, and the motto CESSANTE VENTO CONQUIESCEMUS — "When the wind ceases we shall be quiet."

Such were the impressive lessons which these mute teachers on the circulating medium of the country conveyed to the people. They were intended to excite their patriotism, inspire them with hope, and give them confidence in the final success of their efforts as a guaranty that the promises of redemption on the face of the bills would he fulfilled. The people for a time received them without hesitation, and the Congress made other emissions whenever the public service required.

The management of this paper currency was entrusted to two treasurers, acting conjointly, who were required to live in Philadelphia, and were each paid a salary of five hundred dollars out of the Public Treasury. The first appointed were Michael Hillegas and George Clymer. They gave bonds to John Hancock, the president of Congress, and other members designated, in the sum of one hundred thousand dollars, for the faithful discharge of their duties. A census of the inhabitants of each colony, including negroes and mulattoes, was settled by consent, in order that the proper amount for paying the bills, whenever they should be presented at the Treasury, might be levied upon each. This measure was adopted on the 29th of July, four days after another emission of $1,000,000 had been authorized, making the whole amount then issued $3,000,000. The apportionment, as thus made, put Virginia at the head. That colony was required, because of its superiority in population, to contribute $496,278; while New York, ranking with Connecticut, North and South Carolina, was assessed only $248,139, or one half that of Virginia.

The Continental bills were ordered to be taken for taxes and canceled; and to sustain their credit the treasurers were instructed to advertise their readiness to redeem them, in gold and silver, whenever coin in either of these metals happened to be received into the public exchequer. Toward the close of the year 1775 a census of the inhabitants of all the colonies was ordered, so that a just apportionment of the burdens of each might be determined.

During the summer of 1775 an expedition for the invasion of Canada was organized. Tedious delays made it exceedingly expensive, and in November, when the army, under the immediate command of General Montgomery had penetrated to the St. Lawrence, and another under Benedict Arnold had crossed the vast wilderness and stood before Quebec, the Congress ordered a new emission of paper money, to the amount of $3,000,000, making the total issue in the course of five months of $6,000,000. It was soon ascertained that the Canadians, on whom the invading army must rely for its immediate supplies, would not receive the Continental bills in payment. It was therefore resolved that the silver and gold in the Treasury should be counted and forwarded to the Northern army under a sufficient guard, and that the treasurers be empowered to employ a broker to collect silver and gold in exchange for Continental paper.

In the issue of the $3,000,000 in November, 1775, bills of larger denominations were emitted; and in the course of time those representing 30, 35, 40, 45, 50, 55, 60, 65, 70, and 80 dollars, were in circulation. There were also fractions of a dollar printed, such as One Sixth, One Third, One Half, and Two Thirds. These fractions were printed on smaller paper, but bore devices and mottoes on their faces and sometimes on their backs.



   Thumbnail of Front     Thumbnail of Back
(click to see larger images)

One of these fractions in my possession is shown above, front and back, representing One Sixth of a Do1lar, has on the face a sundial, with the sun (represented by a human face) shining upon it. A smaller face, representing the moon, is near it. In the circle around the dial is the motto FUGIO —" I fly," applied to Time. Under the dial is the excellent injunction, MIND YOUR BUSINESS. On the back, with the name and address of the printers (Hall and Sellers), is a chain in a circle — an emblem of union — composed of thirteen circular links, on each of which is the name of a colony. In the center are the words WE ARE ONE, and around them AMERICAN CONGRESS.


Thumbnail of half-dollar note,
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On a half-dollar note is the device of a hand planting a young tree, and the word POSTERITATE — "For posterity." The lesson to be conveyed was that the struggle in which the colonists were engaged in the planting of a new and free nation would be for the benefit of posterity — that future generations would enjoy the blessings of life under the Tree of Liberty then planted.


Thumbnail of 30-dollar bill,
click to see larger image

On a 30-dollar bill, issued on the 26th of September, 1778, is a wreath of leaves, on a marble monument of altar form, and the motto SI RECTE FACIES—"If thou shalt do well," or "If you act rightly." This seems to have been intended as an encouragement to perseverance in the good cause; for it promised those who should do so a wreath of honor and an enduring monument. This is supposed, by a writer of that period, to have been particularly addressed to the Congress; and that the wreath was composed of laurel, the tree dedicated to Apollo, and understood to signify knowledge and prudence—of oak, as pertaining to Jupiter, and expressing fortitude—and of olive, the tree of Pallas and symbol of peace. The motto he considered as evidently taken from a passage in Horace, "Si facet faciet, non qui dominator, erit rex," signifying that not the King’s Parliament, who act wrong, but the People’s Congress, if they act right, shall govern America. (Ref. Force’s "American Archives," Fourth Series, Volume iii., page 748. The same writer, whose letter is dated " Philadelphia, October 20, 1775," gives explanations of the devices and mottoes on the earliest issued bills, the substance of which are embodied in this paper.)



Thumbnail of 35-dollar bill,
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On a 35-dollar bill, issued on the 14th of January, 1779, is a picture representing an open field and a plow and tree in the foreground, small trees in the distance, and a cloud, indicating blessed moisture, hanging in the sky. The motto is unto HINC OPES — "Hence our wealth." — The significance of the device and motto is too palpable to need explanation. Agriculture is the source of the most genuine wealth and prosperity of a nation. The lighter portion of the engraving shows the form of the red stamp on the face of the original, already alluded to in descriptions of other devices.

On a 40-dollar bill, issued on the 26th of September, 1778 after a majority of the States had agreed to Articles of Confederation, or a National League, is an altar with a flame rising from it. Over the altar and flame, breaking from a cloud, is the All-seeing Eye, casting radiance over the whole field. In a circle around the altar are thirteen stars, and the English word CONFEDERATION. This vignette denotes that under the eye of God the thirteen independent States had confederated, and that upon one altar they had laid their precious sacrifices. Refer to the discussion of genuine and counterfeit bills later in this article for images of a 40-dollar bill.



Thumbnail of 45-dollar bill,
click to see larger image

On a 45-dollar bill, issued on the 14th of January, 1779, is represented an apiary in which two beehives are visible, and bees are seen swarming about. The motto is — SIC FLORET REPUBLICA — "Thus flourishes the Republic." It conveys the simple lesson that by industry and frugality the Republic would prosper.



Thumbnail of 50-dollar bill,
click to see larger image

On a 50-dollar bill, issued on the 26th of September, 1778, is a picture of an unfinished pyramid. Thirteen layers of stone, representing the thirteen Confederated States, are seen. The motto is PERENNIS — "Everlasting," or "Enduring." — The incomplete pyramid denotes the expectation that other States would be added in time. The motto implies that the Confederated States, while in union, would have an enduring existence. Union, Strength, and Perpetuity are the leading ideas of the device. The unfinished pyramid was adopted for the obverse of the Great Seal of the United States, in 1782, and still holds its place there, where there are thirty-one layers. On the back of this bill are three Indian arrows on the wing.



Thumbnail of 55-dollar bill,
click to see larger image

On a 55-dollar bill, issued on the 14th of January, 1779, is represented an open country, a dark cloud rolling away, and the sun shining in splendor upon the landscape. The lighter portion of the engraving shows the form (triangular) of the red stamp upon the face of it. The motto is POST NUBILA PHOEBUS — "After the clouds comes the sun." — This was the darkest period of the Revolution, and these encouraging words were sent forth to the people for their comfort. The clouds were then black, the light was dim, the thunders were frequent and heavy, but faith in the hearts of the faithful prophesied of succeeding sunshine for the struggling colonist, when peace and prosperity should prevail.



Thumbnail of 60-dollar bill,
click to see larger image

On a 60-dollar bill, issued on the 26th of September, 1778, is the figure of a globe in the heavens, and the words DEUS REGNAT EXULTET TERRA— "The Lord reigns, let the earth rejoice." — This quotation from one of the Psalms of David was to express the confidence of the Confederated States in the God of Battles, and, like others, was circulated for the encouragement of the people.



Thumbnail of 65-dollar bill,
click to see larger image

On a 65-dollar bill, issued on the 14th of January, 1779, is the figure of a hand projecting from the heavens, and holding a pair of equally balanced scales over the earth, and the words FIAT JUSTITIA— "Let justice he done." — In the Declaration of Independence our fathers said they had "appealed to the native justice and magnanimity" of their "British brethren." They also solemnly appealed "to the Supreme Judge of the world for the rectitude of their intentions," and all that they desired was justice, human and divine. And they were willing to be judged by the maxim that "Just men are only free; the rest are slaves."



Thumbnail of 70-dollar bill,
click to see larger image

On a 70-dollar bill, also issued on the 14th of January, 1779, the device is a single tree, strong and firmly rooted, and the words VIM PROCELLARUM QUADRENNIUM SUSINUIT — "For four years it has sustained the force of the storms." — The tree represents the Confederacy of States. The war, which commenced in the spring of 1775, had then been raging for four years and upward. This motto and device simply announced a historical fact, yet one that was full of significance. For four years they had sustained the storm of war, and were not overcome. It was an encouragement for them to persevere.



Thumbnail of 80-dollar bill,
click to see larger image

On an 80-dollar bill, also issued on the 14th of January, 1779, is the figure of a huge oak tree, and the words ET IN SECULA SECULORUM FLORESCEBIT —"It will flourish forever and ever—through ages of ages." — This is a prophetic emblem of the Republic they were then endeavoring to establish. It referred to the union and perpetuity of the States as one great nation. Surely we, who have been witnesses of the terrible storm to which the Republic — the mighty oak — has been subjected during the last two years, and the amazing strength with which it has resisted the hurricane, have reason to believe in the prophecy and rejoice in its promises.

Every escutcheon on the faces of the several denominations of Continental Bills of Credit have now been given in careful copies from originals. It wi11 be observed that most of the later ones have been copied from bills issued on the 14th of September, 1779. The amount then authorized was $50,000,000. Never before nor afterward was a sum larger than $10,000,000 emitted at one time. The area of the war had been greatly enlarged during the previous year. The enemy was making great preparations to subjugate the Southern States. An expensive campaign was to be carried on there; for South Carolina and Georgia were so full of Tories that armies must be sent from the North to meet the foe. Canada was to be again invaded, and the enemy expelled from Rhode Island. Promised aid from France had not arrived, and only $4,000,000 had been obtained from Europe by loans. The Congress had no other resource for funds than the creation of paper money; and notwithstanding the $100,000,000 which had already been issued had so depreciated that $742 in Continental bills were valued at only $100 in specie, they authorized, in their desperation, the issue of $50,000,000 more.

Early in 1776 confidence in the Continental money began to waver. The bills were sometimes refused. A general uneasiness began to prevail in the public mind concerning them; and Committees of Safety and other authorities in the several Colonies were constrained to adopt measures for sustaining them. Patriotic men came forward and offered to redeem them at par, and exchanges of one thousand dollars in silver were made for the same sum in Continental Paper. But these examples were not potent enough to allay the public distrust, and the Continental Congress was compelled to take the matter in hand. On the 11th of January, 1776, after intimating in a preamble that the Tories, or the adherents of the Crown, were endeavoring to depreciate the currency, the Congress resolved:

"That if any person shall hereafter be so lost to all virtue and regard for his country as to refuse to receive said bills in payment, or obstruct and discourage the currency or circulation thereof, and shall be duly convicted by the committee of the city, county, or district, or in case of appeal from their decision, by the Assembly, Convention, Council, or Committee of Safety of the Colony where he shall reside, such person shall be decreed, published, such treated as an enemy of his country, and precluded from all trade or intercourse with the inhabitants of these colonies."

And when, at near the close of the year, immediately after the battle of Trenton, Washington was invested by the Congress with the powers of Military Dictator for six months, one specification of those powers authorized him "to arrest and confine persons who refuse to take the Continental Currency," and to return to the States of which they were citizens, their names, together with those of the witnesses.

At the close of 1776 the Congress had issued bills to the amount of $25,510,000. From that time, when they were at five per cent discount, they rapidly depreciated, in spite of all efforts in their favor; and twelve months afterward $325 in paper was equivalent to only $100 in specie.


Thumbnail of a lottery ticket
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Meanwhile a lottery scheme for creating funds had been tried, pursuant to a resolution of the Congress, on the 1st of November, 1776. A committee appointed for the purpose reported a scheme on the 18th, in which there were to be 100,000 tickets arranged in four classes, the highest prize in the first being $10,000; in the second $20,000; in the third $30,000; and in the fourth $50,000. The affair was to have the form of a loan. The drawer of more than a minimum prize in each class was to receive a Treasury Note payable in five years, and bearing an annual interest of four per cent. The tickets (a facsimile of one is here given) were issued, bearing date the 18th of November, 1776, and the drawing was appointed to be held at Philadelphia on the 1st of March following. The measure was not popular. Tickets sold tardily, and the drawing was postponed from time to time. It never took place; and this financial scheme, like others of that period, was a complete failure, occasioning considerable loss to many individuals, and producing much unpleasant feeling in the public mind. The Congress was compelled to rely upon the Continental Money.

The limits of this paper will not admit more than a brief outline history of the management of the Continental money from the close of 1776 until its final extinction as currency in 1780. Alarmed at the prospect of its rapid depreciation, the Congress adopted various expedients to sustain its credit. Some of them were unwise, some very arbitrary, and all of them futile. They were instigated by the most patriotic motives, and sanctified by the most honest intention and expectation of justifying the faith of the people in the pledges given on the faces of the bills. For this purpose, early in 1777, the Congress, after declaring that as "the Continental money ought to be supported at its full value expressed in the respective bills, by the inhabitants of these States, for whose benefit they were issued, and who stood bound to redeem the same according to the like value," resolved that all such bills should pass current at par in all transactions of trade; and that those who should refuse to receive them at such valuation should be deemed enemies of their country. They recommended the Legislatures of the several States to make laws declaring the bills issued by the Congress a "legal tender" in payment of public and private debts, "and a refusal thereof an extinguishment of the debt." At the same time the States were asked to make provision for calling in and sinking their respective quotas of the emissions. At near the close of the year (Dec. 3, 1777), the Congress who recommended the several Legislatures to enact laws requiring all persons within their respective States, holding hills of credit issued by the authority of the British sovereign previous to the 19th of April, 1775, forthwith to deliver them to appointed commissioners, to be exchanged for the Continental money. These were wanted for the use of the commissaries of prisoners, who were compelled to use specie or bills authorized by the Crown.

These recommendations were acted upon, more or less, in the several States; but the legislation which followed proved to be so pernicious — so grinding to the confiding, patriotic creditors, and beneficial to dishonest debtors, who were enabled to pay their liabilities at an enormous discount — that the Congress soon hastened to recall their unwise advice, and to beseech the States to repeal their iniquitous "tender" laws, which discouraged taxation, the only safe security for the redemption of a public debt. "Who," said a member of Congress, in a debate on the subject of the emission of bills — "Who will consent to load his constituents with taxes, when we can send to our printers and get a wagon-load of money, and pay for the whole with a quire of paper?" Such, indeed, was the way, during the years 1778 and 1779, the Continental Congress kept the machinery of the Revolution in motion. By the means of an active printing press and a few commissioners hired by the day or paid by the quantity to sign the bills, nearly all of the pecuniary demands of the Government were responded to by "wagon loads" of paper money. More than thirty thousand troops were kept in the field, cruisers were sent out upon the seas, diplomatic intercourse with foreign countries was sustained, and the ordinary demands of the civil list were thus met. At the close of 1779, when the printing press was stopped, the commissioners were dismissed, and the depreciation of the paper currency had reached zero. More than $242,000,000 had been put in circulation, and $200,000,000 remained unredeemed in the hands of the people. During the two preceding years the whole amount of specie received into the Continental Treasury was only $156,660, weighing in gold about seven hundred pounds, and being in bulk less than the contents of a good-sized wheelbarrow!


Thumbnail of paper money emitted 1776-9
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Meanwhile a panic had been created among the holders (and they were the whole people) of the Continental Money, by the discovery of an immense amount of counterfeits afloat. Sir Henry Clinton, the British commander in the city of New York, was at the head of the gang of counterfeiters, and the Loyalists all over the country were his accomplices. Smithers, the Englishman who had been employed by Congress to engrave many of its bills, assisted Sir Henry, it is said, in his nefarious work; and when suspected he fled to New York. The business was commenced in the spring of 1777, and continued for more than two years, to the great discredit of the Continental currency. It was no secret at the time, as the following advertisement in Hugh Gaines’s New York Mercury, April 14, 1777, attests:

"Advertisement.—Persons going into other colonies may be supplied with any number of counterfeited congress notes for the price of the paper per ream. They are so neatly and exactly executed that there is no risk in getting them off, it being almost impossible to discover that they are not genuine. This has been proven by bills to a very large amount, which have already been successfully circulated. Inquire of Q. E. D., at the Coffee House, from 11:00 A.M. to 4:00 P.M. during the present month."


A copy of one of the counterfeit notes, issued almost a year later than the date of this advertisement, and a genuine one emitted later still, are shown above. They are both of the same denomination, and have the same border and escutcheon. It is evident that the engraver of the counterfeit attempted to imitate the movable type of the genuine, and, as may be seen, failed. The Congress, by calling in its emissions most counterfeited, and urging the States to provide a sinking fund by raising $15,000,000 in the year 1779, and $6,000,000 annually for eighteen years thereafter, hoped to sustain the rapidly falling currency. In a circular to the States they laid the whole matter before the people, concealing nothing. They admitted that the issue of paper money had been in excess of the actual wants of the Government as five to one, but explained the cause, and gave reasons why more should be emitted. They also endeavored to calm the fears of the people concerning the burden of the National debt. "Let us suppose," they said, at the middle of September, 1779, when the emissions of paper money amounted to $160,000,000, and the loans at home and abroad to almost 40,000,000 — "Let us suppose for the sake of argument, that at the conclusion of the war the emissions should amount to $200,000,000; that exclusive of supplies from taxes, which will not be inconsiderable, the loans should amount to l00,000,000, thus the whole national debt of the United States would be $300,000,000. There are at present 3,000,000 of inhabitants in the thirteen States: 300,000,000. of dollars divided among 3,000,000 of people, would give to each person $100. Is there an individual in America, in the course of eighteen or twenty years, unable to pay it again? Suppose the whole debt assessed as it ought to be, on the inhabitants in proportion to their respective estates, what would then be the share of the poorer people? Perhaps not $10." They then referred to the fair assumption that within twenty years the population of the States would probably more than double, making the tax, in the end, exceedingly light for all. In a subsequent address they spurned the idea, which had been suggested by the enemies of the country, that the people would ever consent to a repudiation of the debt. They spoke of a bankrupt, faithless Republic, as a novelty in the political world. "The pride of America," they said, "revolts from the idea …..Knowing, as we all do, the value of national character, and impressed with a due sense of the immutable laws of justice and honor, it is impossible that America should think, without horror, of such an execrable deed."

Thus spoke wise, honest, and patriotic men, upon whose shoulders the weight of government was laid, without the assisting and compensating support of delegated executive power. By the terms of the Confederation then agreed upon but not ratified, they could not command. They could only recommend measures; it was for the States in full agreement to order their execution. In the matter of finances the States could not agree; and their jealousies contravened the honest and patriotic efforts of the Congress to sustain the public credit. (Ref. article entitled "The League of States", Harpers Magazine, January 1863). The States had taken some measures, as we have observed, for the purpose, as individuals. Some of them had recently enacted rigid laws by which the price of labor, the produce of the workshop and farm, the charges of innkeepers, the price of imported goods, etc., were to be regulated. The Congress, in like manner, had attempted to fix a standard price for everything purchased for the public service. But these efforts all failed to produce the desired effect. They caused widespread confusion in trade and immense vexation. Yet common danger and common patriotism made the people patient and loyal. They clung to the central government as their anchor of hope. When the bills of the States were worthless and were everywhere refused, those of the Continental Congress, though equally worthless, passed currently at the exchange of the day, because they bore the stamp of Nationality. The people believed in a NATIONAL GOVERNMENT; only demagogues clung to the idea of STATE SUPREMACY.

Laws, penalties, entreaties, the most enduring patriotism, could not sustain the credit of the Continental currency. Prices went up and the paper went down, until the latter became valueless as a circulating medium.

The following value table exhibits the depreciation of the Continental Money at the beginning of every month during the last five years of its existence, specie being the standard of value:


Thumbnail of value table and separate transaction example
click to see larger image

The people were heartily tired of a currency which figured so ridiculously in a common transaction of trade as the above transaction example. They preferred to see it disappear in perfect annihilation. There was not a shadow of a chance of its ever being redeemed, the finances of the Confederacy wore in such a wretched state. The people submitted quietly to the loss of $200,000,000, and thereby exhibited one of the most glorious pictures of true patriotism to be found in the annals of the race. It was a great debt created by the representatives of the people; it was borrowed from the people; and it was canceled, by annihilation, with the tacit consent of the people. It had performed for them, and us, a most blessed work. It had fed, clothed, armed, and paid troops, and fitted out ships, for the defense of the liberties we now enjoy—"With this paper," wrote the philosophic Franklin, from Passy, in France, in the autumn of 1780— "With this paper, without taxes the first three years, they fought and baffled one of the most powerful nations in Europe. They hoped, notwithstanding its quantity, to have kept up the value of their paper. In this they were mistaken. It depreciated gradually. But this depreciation though in some circumstances inconvenient, has had the general good and great effect of operating as a tax, and perhaps the most equal of all taxes, since it depreciated in the hands of the holders of money, and thereby taxed them in proportion to the sums they held, and the time they held it, which generally is in proportion to men’s wealth. Thus, so much of the public debt has been, in this manner, insensibly paid that the remainder does not exceed six millions sterling…….. In the meantime the vigor of their military operations is again revived, and they are now as able, with respect to money to carry on the war as they were at the beginning, and much more so with regard to troops, arms, and discipline. It is also an increasing nation, sixty thousand children having been born annually in the United States since the beginning of the war"

Abandoning the issue of Continental Money, the Congress resorted to specie loans in Europe and the emission of a new kind of paper. On the 18th of March, 1780, after renewing a call upon the several States to pay into the National Treasury the aggregate sum of $l5,000,000 a month until the first of 1781, they resolved to issue bills on the funds of the individual States, signed by commissioners appointed by them, and their payment guaranteed by the United States. The following form of the bills of the new emission expresses the condition:

"The possessor of this bill shall be paid — Spanish milled dollars, by the 31st day of December, 1786, with interest, in like money, at the rate of five per cent, per annum, by the State of——according to an act of the Legislature of the said State, of the —— day of——,1780"

These bills were indorsed as follows:

"The United States insure the payment of the within bill, and will draw bills of exchange for the interest annually, if demanded, according to a resolution of Congress, of the 18th day of March, 1780."


The bills were called the "New Emission" in contradistinction to the Continental bills, which were now termed the "Old Emission". But the losses incurred by the latter made the people look with suspicion upon all paper money.

Here the history of the Continental Money (old emission) as currency ends, and with it the topic of this paper. It was used before the close of the war for ignoble purposes. "I have seen," said the late Samuel Breck, of Philadelphia, in a letter to the writer, "a barber’s shop in Boston papered with the bills; and sailors who, on their return from long voyages, were paid their wages in great bundles of this trash, with the usual lightheartedness of their class, laugh at their own misfortune, and for the fun of the thing parade the streets with their clothes covered with bills that once represented thousands of dollars." They have now become very rare, and are seldom found outside of the collections of antiquaries. Joshua I. Cohen, M.D., of Baltimore, Maryland, has a specimen of every denomination and of every issue of the "Old Emission" of Continental Money. It is believed to be the only perfect collection in the country; that of Colonel Peter Force, of Washington city, lacking one or two bills of the very rare issue of April 11, 1777, which were drawn from circulation because of counterfeits.


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