[Sidenote: Loans.]
The absolutely necessary expenditures, without which no army could make head against the British, were from twenty to twenty-five million specie dollars each year. Of this the Continental bills furnished on an average some eight or ten millions. Another method of raising money was that of borrowing on funded loans. Great schemes were put forth. The United States were to borrow at four per cent; they were to borrow two millions; they were to borrow ten millions; they were to borrow twenty millions. The result was that in three years $181,000 was thus loaned, and up to the end of the war but $1,600,000,—hardly a hundredth part of the necessary means. Failing to raise money directly, recourse was bad to the so-called loan-office certificates. These were issued to creditors of the government, and bore interest. The greater part of the military supplies were paid for in this extravagant and demoralizing fashion, and in 1789 they had to be settled, with accumulated interest amounting to nearly fifty per cent. Better success was had in Europe. No private banker would lend money to a set of rebels not recognized by any government as independent, but the French and Spanish governments were willing to advance both money and stores. In this way the United States received about three million dollars.
[Sidenote: Requisitions.]
When it was evident that the domestic loan had failed, Congress called upon the States to furnish five millions of dollars, apportioned among them according to their importance. These requisitions were repeated at intervals during the Revolution, but always with the same effect. Not a fourth part of the sums asked for was paid by the States. A system of "specific supplies" was adopted in 1778, by which the States were allowed to pay their quotas in kind. It added a new source of confusion, and brought no more revenue.
[Sidenote: Miscellaneous resources.]
Every device that the government could put into operation for raising money was eventually tried. A lottery brought considerable sums into the treasury, the supplies for the army were seized at Valley Forge and elsewhere, and paid for in certificates. Bills were drawn on foreign ministers for funds which it was hoped they might have in hand by the time the bills reached them, and the government bought, and sent abroad to meet its indebtedness, cargoes of tobacco and other products.
[Sidenote: Speculation.]
The financial burdens of the government were increased by a spirit of extravagance, speculation, and even of corruption. Washington wrote, "Unless extortion, forestalling, and other practices which have … become exceedingly prevalent can meet with proper checks, we must inevitably sink under such a load of accumulated oppressions." The whole cost of the war is estimated at one hundred and thirty-five millions. Of this about one hundred millions had been raised through the Continental bills and other devices. About thirty-five millions remained as a national debt.
44. INTERNAL DIFFICULTIES (1775-1782).
[Sidenote: Weakness of Congress.]