ment of debts and taxes, and also into the Continental loan offices, either on loan or to be exchanged for other bills of a new tenor, bearing interest at five per cent., and redeemable in specie within six years. The old bills thus called in were to be destroyed. *
This effort, like its predecessors, was unsuccessful. Prices rose as the money sank in value, and every branch of trade was deranged. In several states laws limiting prices were still in force, and the rapid depreciation of the bills threw all contracts into confusion. The amount in circulation on the 1st of September, 1779, was a hundred and sixty millions. Congress resolved that the issues should not exceed two hundred millions in the whole. The loans prior to the 1st of August, 1778, the interest of which was payable in bills on France, were seven millions and a half. The loans contracted since were more than twenty-six millions. The debt abroad was estimated at four millions. Only three millions out of the sixty millions of paper dollars already called for from the states had been paid into the public treasury.
Congress was powerless to stay the downward tendency of the paper currency. It continued to depreciate and prices to rise. Early in 1780, forty paper dollars were worth only one in specie. ** The commissaries found it extremely difficult to purchase supplies for the army, for the people refused to exchange their articles for the almost worthless paper. Direct taxes had been unsuccessfully tried to replenish the treasury, and, as supplies could not be obtained, a speedy dissolution of the army and abandonment of the rebellion seemed inevitable.
Congress was obliged to open new resources for the supply of the army, and required each state to furnish a certain quantity of beef, pork, flour, corn, forage, and other articles, which were to be deposited in such places as the commander-in-chief should determine. The states were to be credited for the amount at a fixed valuation in specie. This scheme was utterly
* Journals of Congress, vol. i., p. 5.
* Value of $100 in Specie in Continental Money.
1777. 1778. 1779. 1780. 1781.
January......$105 $325..... $742.....$2934.....$7400
February..... 107 350..... 868..... 3322..... 7500
March... 109 370..... 1000..... 3736.....
April... 112 400..... 1104..... 4000.....
May 400.. 1215..... 4600..
June... 120 400..... 1342..... 6400.....
July 425..... 1477..... 8900..
August....... 150 450..... 1630..... 7000.....
September.... 175 475..... 1800......7100..
October...... 275 500..... 2030..... 7200.....
November.... 300 545..... 2308..... 7300.....
December.... 310 634..... 2593..... 7400..
* Captain M'Lane was the father of the late Secretary of the Treasury.
Unjust Financial Law.—Washington's Deprecation of it.—Hopes of the Tories.—Cipher Writing of the Loyalists.
impracticable, from the want of authority to enforce the demands, and the distance of several states from the army, and Congress speedily abandoned it. The several states were then recommended by Congress to pass laws making paper money a legal tender, at its nominal value, for the discharge of debts which had been contracted to be paid in hard cash. Such laws were enacted, and many dishonest debtors took advantage of them. Although the bills were passing at the rate of twenty for one, they were made a lawful tender, and debts were discharged at a cheap rate. It was one of the most unwise and unjust acts committed by Congress during the war. The honest and simple were defrauded, and the rogues were immense gainers. * The people justly raised a great clamor, while the friends of the king greatly rejoiced in seeing the growth of what they deemed the canker-worm in the seed of rebellion. **