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 2, 1779, will amount to $159,948,880, the sum which Congress declared to be then in circulation.

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C. Effects of Continental Paper Money, 1775-17801

The economic and social effects of the depreciation of the continental paper money in South Carolina are here pictured. This may be accepted as typical of conditions in all the colonies during this period.

That the money should finally sink, or that it should be redeemed by a scale of depreciation, were events neither forseen nor expected by the bulk of the people. The Congress and the local Legislatures, for the first five years of the war, did not entertain the most distant idea of such a breach of public faith. The generality of the friends of the revolution, reposing unlimited confidence in the integrity of their rulers, the plighted faith of government, and the success of the cause of America, amused themselves with the idea that in a few years their paper dollars, under the influence of peace and independence, would be sunk by equal taxes or realized into silver at their nominal value; and that, therefore, the sellers would ultimately increase their estates in the same proportion that the currency had depreciated. The plunderings and devastations of the enemy made several think that their property would be much safer, when turned into money, than when subject to the casualties of war. The disposition to sell was in a great degree proportioned to the confidence in the justice and final success of the revolution, superadded to expectations of a speedy termination of the war. The most sanguine Whigs were, therefore, oftenest duped by the fallacious sound of high prices. These principles operated so extensively that the property of the inhabitants, in a considerable degree, changed its owners. Many opulent persons, of ancient families, were ruined by selling paternal estates for a depreciating paper currency, which, in a few weeks, would not replace half of the real property in exchange for which it was obtained. Many bold adventurers made fortunes in a short time by running in debt beyond their abilities. Prudence ceased to be a virtue, and rashness usurped its place. The warm friends of America, who never despaired of their country, and who cheerfully risked their fortunes in its support, lost their property; while the timid, who looked forward to the re-establishement of British government, not only saved their former possessions, but often increased them. In the American revolution, for the first time, the friends of the successful party were the losers.

1 The History of South Carolina. By David Ramsay. (Written 1808. Published, Newberry, S. C., 1858), 98, 102.

The enthusiasm of the Americans, and their confidence in the money, gave the Congress the same advantage in carrying on the war which old countries derive from the anticipation of their permanent funds. It would have been impossible to have kept together` an American army for so many years without this paper expedient.. Though the bills of credit operated as a partial tax on the monied interest, and ruined many individuals, yet it was productive of great national benefits by enabling the popular leaders to carry on a necessary defensive war. . . .

The paper currency continued to have a partial circulation in the northern States for a year after a scale of depreciation was fixed. It gradually diminished in value till the summer of 1781. By common consent, it then ceased to have any currency. Like an aged man, expiring by the decays of nature without a sigh or a groan, it gently fell asleep in the hands of its last possessors, and continued so for ten years; when the Congress paper dollars were funded at the rate of 100 for one of silver.

D. Issues of Paper Money by the States, 1781-17881

After the disappearance of the continental paper money from circulation, seven of the states, under the plea of necessity, plunged afresh into paper money emissions during the years 1781 to 1788. The history of these issues was the same as that of the continental currency - overissue, depreciation, and disturbance of trade. A vivid picture of the effects in two of the states is drawn for us by Brissot de Warville, a French traveler of liberal views, who usually had only words of praise for things American.

The port of Newport is considered as one of the best in the United States. The bottom is good, the harbour capable of receiving the largest ships, and seems destined by nature to be of great consequence. This place was one of the principal scenes of the last war. The successive arrival of the American, English, and French armies, left here a considerable quantity of money.2

Since the peace every thing is changed. The reign of solitude is only interrupted by groups of idle men, standing with folded arms at the corners of the streets; houses falling to ruin; miserable shops,

1 New Travels in the United States of America. By Jean Pierre Brissot de Warville (Dublin, 1792), 144-7, 176-8.

2 The English destroyed all the fine trees of ornament and fruit: they took a pleasure in devastation.

* This town owed a part of its prosperity to the slave trade, which is at present suppressed.

which present nothing but a few coarse stuffs, or baskets of apples, and other articles of little value; grass growing in the public square, in front of the court of justice; rags stuffed in the windows, or hung upon hideous women and lean unquiet children.

Every thing announces misery, the triumph of ill faith, and the influence of a bad government.

At Newport the people, deceived by two or three knaves, have brought on their own misery, and destroyed the blessings which Nature had lavished upon them. They have themselves sanctioned fraud; and this act has rendered them odious to their neighbors, driven commerce from their doors, and labour from their fields.

Read again, my friend, the charming description given of this town and this State, by M. de Crèvecoeur. It is not exaggerated. Every American whom I have questioned on this subject, has described to me its ancient splendor, and its natural advantages, whether for commerce, agriculture, or the enjoyments of life.

The State of Rhode Island will never again see those happy days, till they take from circulation their paper money, and reform their government.

... but this State [New Jersey] is ravaged by a political scourge, more terrible than either; it is paper money. This paper is still, in New Jersey, what the people call a legal tender, that is, you are obliged to receive it at its nominal value, as a legal payment.

I saw, in this journey, many inconveniences resulting from this fictitious money. It gives birth to an infamous kind of traffic, that of buying and selling it, by deceiving the ignorant; a commerce which discourages industry, corrupts the morals, and is a great detriment to the public. This kind of stock-jobber is the enemy to his fellow-citizens. He makes a science of deceiving; and this science is extremely contagious. It introduces a general distrust. A person can neither sell his land, nor borrow money upon it; for sellers and lenders may be paid in a medium which may still depreciate, they know not to what degree it may depreciate. A friend dares not trust his friend. Instances of perfidy of this kind have been known, that are horrible. Patriotism is consequently at an end, cultivation languishes, and commerce declines. How is it possible, said I to Mr. Livingston, that a country, so rich, can have recourse to paper money? New Jersey furnishes productions in abundance to New York and

1 Letters from an American Farmer (1770-1781). By St. John de Crèvecœur (London, 1782). — Ed.

Philadelphia. She draws money, then, constantly from those places; she is their creditor. And shall a creditor make use of a resource which can be proper only for a miserable debtor; How is it that the members of your legislature have not made these reflections? The reason of it is very simple, replied he: At the close of the ruinous war, that we have experienced, the greater part of our citizens were burdened with debts. They saw in this paper money, the means of extricating themselves; and they had influence enough with their representatives to force them to create it. But the evil falls at length on the authors of it, said I; they must be paid themselves, as well as pay others, in this same paper; why do they not see that it dishonours their country, that it ruins all kinds of honest industry, and corrupts the morals of the people; Why do they not repeal this legal tender? A strong interest opposes it, replied he, of stock-jobbers and speculators. They wish to prolong this miserable game, in which they are sure to be the winners, though the ruin of their country should be the consequence. We expect relief only from the new situation, which takes away from the States the power of making paper-money. All honest people wish the extinction of it, when silver and gold would reappear; and our national industry would soon repair the ravages of the war.

IV. SOCIAL EFFECTS OF THE REVOLUTION

Views of a Contemporary, 1775-17831

Whatever else it may involve war always brings changes; it throws men out of their accustomed callings and makes new demands upon them. The War of the Revolution, which severed the political ties with England and introduced a new government, which interrrupted the ordinary lines of trade and disorganized business by the introduction of a depreciating paper money, had particularly marked effects. These are described by Ramsay, a physician of South Carolina, and a very able and judicious observer of contemporary events.

The American revolution, on the one hand, brought forth great vices; but on the other hand, it called forth many virtues, and gave occasion for the display of abilities which, but for that event, would have been lost to the world. When the war began, the Americans were a mass of husbandmen, merchants, mechanics and fishermen; but the necessities of the country gave a spring to the active powers of the inhabitants, and set them on thinking, speaking and acting,

1 The History of the American Revolution. By David Ramsay (Philadelphia, 1789), II, 315-6.