It was quite natural that this easy way of supply ing the colonial governments with such funds as they wanted, should afterwards be resorted to as a means of making money plenty in every man's pocket. Whenever a cry arose of scarcity of mo ney, all the governments had to do, was to issue more paper.
Our limits will not permit us to describe the per nicious effects this system had on the morals of the community, and, through their morals, on their in dustry and wealth. It opened to many individuals another way of growing rich, besides the old fash ioned way of hard work and close economy. It substituted speculation for industry: and produced infinitely more evil in the colonies than was occa sioned by any of the restrictions imposed by the British government on their commerce and manu factures. It was nevertheless persisted in, because the speculating part of society, who are always the most active, and generally the most powerful, found their interest promoted by it.
During the revolutionary war, this mode of raising a revenue was resorted to, because it was the easiest. The advances made at the Treasury of the United States in continental money, in old and new emissions, are estimated as follows:— Till the issues of paper exceeded S9,000,000, there was not, according to the concurrent testimony of Mr. Jefferson and Mr. Paine, any sensible deprecia tion. But, in January 1777, one year and five months after the first emission, the depreciation was, as is stated by Pelatiah Webster, about twenty-five per cent, one dollar and a quarter of continental money being equal to one dollar of hard money. In March of that year, the exchange of continental for hard money, was as 2 to 1. In July 3 to 1. In December 4 to 1. In the year 1778, it fluctuated from 4 to 1 to 6 for 1. In January 1779, it rose to 7, 8, and 9 to I. By April it became 22, by December 45. At the close of the year 1780, it was 100 to I. In the latter end of February 1731, it rose to 120; in March, to 135; in April, to 200. In May it rose from 200 to 500, and on the 31st of that month ceased to circulate as money: but was afterwards bought on speculation, at from 400 to 1, to 1000 to 1.
This continental money was, in its true charac ter, simple evidences of debt due by the govern ment: and may, as such, in the first stage of its operation, be compared to the forced loans which the potentates of Europe have at times extracted from their subjects. As a forced currency, it may be compared to the base coin which the same poten tates have issued in other seasons of difficulty. It can be justified (if it can be justified at all) only on the plea of state necessity—a plea never to be ad mitted without close examination.
It is difficult to believe that a people, so devoted as the Americans of that day were to the cause of liberty, would have scrupled about paying the ne cessary expenses of the war. But they were taught by some of their leading men that taxation was quite unnecessary, and that paper money would sup ply every financial want. It is reported that when a proposition was made in congress, to establish a regular revenue system, one member exclaimed, " Do you think, gentlemen, that I will consent to load my constituents with taxes, when we can send to our printer, and get a wagon load of money, one quire of which will pay for the whole!" The best, if not the only excuse, for the policy which was pursued, is, perhaps, to be found in the opinion then prevalent, that money was something which derived its value from the authority of go vernment. In no other way can we apologise for the acts which imposed severe penalties on those who refused to exchange their merchandise for pa per, and which in some instances even outlawed the supposed offender.
Our ancestors were lavish of their blood in de fence of their rights. If it was from any wish to save their treasure, that they preferred defraying the expenses of the war through the means of paper money, rather than by regular taxation, they did not succeed in their object. As a mode of raising revenue, the paper money might be compared to a tax, the expenses of collecting which were ten times as great as the sums brought into the treasury. The benefit the government derived from it was in no way commensurate with the burdens it imposed on the people.