Financial Problems Plague the Young Nation
After the American Revolutionary War ended in 1783, the states had little time to celebrate. During this long war, Americans had lacked badly needed funds to pay for military expenses. As a result, they looked to other countries, such as France and the Netherlands, for loans. After the war, European countries began to demand repayment. The states were left to repay their debts with limited options for raising revenue, and their paper currencies were essentially worthless.
The Articles of Confederation did not give the national government the right to establish a national currency or to raise taxes. The states issued their own paper currencies to pay soldiers and that residents could use for trade. However, they did not possess enough gold and silver coins, also known as specie, to back up their paper currencies, and the paper notes lost value.
Table of Official Depreciation of Bills of Public Credit. Click to enlarge. Transcript below.
Common-Wealth of Massachusetts.
WHEREAS by an Act of the General Court, passed in their present Session, the Justices of the Supreme Court of this Commonwealth, or the major part of them, are appointed and impowered to determine the value of the Bills of public Credit current within the same, from the first day of April last; for which purpose they are directed to meet once in every three months at the least, and as much oftner as they shall judge necessary, and then to determine the value of the said bills, as compared to the value of Silver and Gold, within the Commonwealth.
Accordingly, the said Justices having met at Boston upon this day, and being duly sworn, as the same Act directs, have determined the value of said bills, when compared with silver and gold, within the Commonwealth, to be as follows:
From April 1, 1780 to April 20, one Spanish milled dollar was equal to 40 of the old emission.
| April 25 | 42 to the 25th | 60 | September 10, | 71 |
| " " 30, | 44 " " 30th | 62 | October 15, | 72 |
| May 5 | 46 to June 10th | 64 | November 10, | 73 |
| " " 10, | 47 " " 15th | 68 | " " 30, | 74 |
| " " 15, | 49 " " 20th | 69 | To Feb. 27, | 75 |
| " " 20, | 54 to Aug. 15h | 70 | 1781. |
And ever since the money of the new emission hath been in circulation, one dollar thereof hath been equal to forty dollars of the old emission.
| William Cushing, | |
| Given under our hands | Nath'l Peaslee Sargeant, |
| the 27th of Feb. 1781. | David Sewell, |
| James Sullivan. | |
| A true copy, | |
| Attest. | JOHN AVERY, Sec'ry. |
