Continental (currency)

Continental currency was a paper currency issued by the Continental Congress, after the Revolutionary War began in 1775. Eric P. Newman, a leading authority on the early paper money of America, distinguishes between Continental Currency, issued by the authority of the Continental Congress, Colonial currency, issued by the colonies before the revolution, and state currency, issued after the Declaration [though many collectors lump together state and colonial issues and refer to both as Colonial Currency] . [Continental currency was denominated in dollars [from 1/6 of a dollar to $80, including many odd denominations in between] , while Colonial currency was denominated in pounds, shillings, and pence, as well as in dollars.] With no solid backing and being easily counterfeited, the continentals quickly lost their value, giving voice to the phrase "not worth a continental".

The painful experience of the runaway inflation and collapse of the Continental dollar prompted the delegates to the Constitutional Convention to include the gold and silver clause into the United States Constitution so that the individual states could not issue bills of credit.

econd Continental Congress

The second Congress met in Philadelphia on May 10, 1775, and on that day, in secret session, the measure was agreed upon, but the resolution was not formed and adopted until June 22, the day on which news of the battle on Breed's Hill was received by the Congress. Then it was resolved

:"that a sum not exceeding 2,000,000 Spanish milled dollars be emitted by the Congress in bills of credit for the defence of the America,"

and that

:"the twelve confederate colonies " ["Georgia was not then represented"] " be pledged for the redemption of the bills of credit now directed to be emitted."

Each colony was required to pay its proportion, in four annual payments, the first by the last of November, 1779, and the last by the end of November, 1782. A committee appointed for the occasion reported the following day the annexed resolution:

:"Resolved, that the number and denominations of the bills be as follows:

:"Resolved, that the form of the bill be as follows:::
CONTINENTAL CURRENCY.

::
No.———— ————Dollars.

::"This Bill entitles the Bearer" to receive ———— Spanish milled Dollars, "or the value thereof in" gold or silver, "according to the resolutions of the" CONGRESS, "held at" Philadelphia "the 10th" of May, A.D. 1775."

Printing the bills

A committee was appointed to procure the plates and superintend the printing of the bills. The plates were engraved by Paul Revere, of Boston. The paper was so thick that the British called it "the pasteboard currency of the rebels." The size of the bills averaged about 3½ by 2¾ inches, having a border composed partly of repetitions of the words "Continental Currency." On the face of each bill was a device (a separate one for each denomination) significant in design and legend; for example, within a circle a design representing a hand planting a tree, and the legend "Posteritat" — for posterity. Twenty-eight gentlemen were appointed to sign these bills.

The two million was issued by July of the same year, and Congress quickly concluded that more was needed. By the end of 1775, a total of $6,000,000 in Continentals had been issued. Since the total money supply in the Colonies has been estimated at $12 million before the revolution, this reflects a 50% increase in the supply of money within a single year.

New issues were made at various times until the close of 1779, when the aggregate amount was $242,000,000. Then the bills had so much depreciated that $100 in specie would purchase $2,600 in paper currency. By the end of 1781, $100 in specie would purchase $16,800 in paper. Laws, penalties, entreaties, could not sustain its credit. It had performed a great work in enabling the colonists, without taxes the first three years of the war, to fight and baffle one of the most powerful nations in Europe. The total loss to the people, by depreciation and failure of redemption, of $200,000,000, operated as a tax, for that depreciation was gradual. Continental bills of credit are now very rare—only in the collections of antiquaries. Counterfeits of the bills were sent out of New York by the British by the cart-load, and put into circulation. The following appeared in Rivington's Gazette:

:"Advertisement. — Persons going into other colonies may be supplied with any number of counterfeit Congress notes for the price of the paper per ream. They are so neatly and exactly executed that there is no risk in getting them off, it being almost impossible to discover that they are not genuine. This has been proven by bills to a very large amount which have already been successfully circulated. Inquire of Q. E. D., at the Coffee-house, from 11 a.m. to 4 p.m., during the present month."

outh Carolina Currency

An ill-advised expedition against the Spaniards at St. Augustine, Florida, by land and sea, undertaken by Governor Moore, of South Carolina, in September, 1702, was unsuccessful, and involved the colony in a debt of more than $26,000, for the payment of which bills of credit were issued, the first emission of paper money in that colony.

Pennsylvania Currency

In 1723 Pennsylvania made its first issue of paper currency. This, however, was called Colonial Scrip, not the same as Continental currency, and it ceased to exist in 1775, giving way to the heavily depreciating Continental currency. It issued, in March 1723, paper bills of credit to the amount of $60,000, made them a legal tender in all payments on pain of confiscating the debt or forfeiting the commodity, imposed sufficient penalties on all persons who presumed to make any bargain or sale on cheaper terms in case of being paid in gold or silver, and provided for the gradual reduction of the bills by enacting that one-eighth of the , as well as the whole interest, should be paid annually. It made no loans but on land security or plate deposited in the loan office, and obliged borrowers to pay 5 % for the sums they took up. The scheme worked so well that, in the latter end of the year, the government emitted bills to the amount of $150,000 on the same terms. In 1729 there was a new emission of $150,000 to be reduced one-sixteenth a year. Pennsylvania was one of the last – if not the very last – provinces that issued its own paper currency.

French Currency

In the course of the French and Indian War, the French officers in Canada, civil and military, had been guilty of immense speculations. At the close of hostilities there was outstanding, in unpaid bills on France and in card or paper money, more than $20,000,000, a large portion of which, the French government declared, had been fraudulently issued. The holders of this currency, payment of which had been suspended immediately after the fall of Quebec (1759), received but a small indemnity for it.

Massachusetts Currency

Very little money had been in circulation in the Massachusetts colony during its earlier years, for what coin the settlers brought with them soon went back to England to pay for imported articles. Taxes were paid in grain and cattle, at rates fixed by the General Court. Every new set of emigrants brought some money with them, and the lively demand for corn and cattle on the part of the new-comers raised the prices to a high pitch. When the political changes in England stopped emigration, prices fell, and a corresponding difficulty was felt in paying debts. In 1640 the legislature of Massachusetts enacted that grain, at different prices for different sorts, should be a legal tender for the payment of all debts. To prevent sacrifices of property in cases of inability to pay, corn, cattle, and other personal goods, or, in default of such goods, the home and lands of the debtor, when taken in execution, were to be delivered to the creditor in full satisfaction, at such value as they might be appraised at by "three intelligent and indifferent men" — one to be chosen by the creditor, another by the debtor, and a third by the marshal. Beaver skins were also paid and received as money, and held a place next to coin in the public estimation. At one time musket-balls, at one farthing each, were made legal tender. A more available currency was found in Wampum, the money of the Native Americans.

Virginia Currency

In 1645 the legislature of Virginia prohibited dealing by barter, and abolished tobacco as currency. They established the Spanish dollar, or "piece of eight," at six shillings, as the standard of currency for that colony. In 1655 the "piece of eight" was changed from six shillings to five shillings sterling as the standard of currency.

ee also

*Colonial Scrip
*Connecticut pound
*Delaware pound
*Georgia pound
*Maryland pound
*New Hampshire pound
*New Jersey pound
*New York pound
*North Carolina pound
*Rhode Island pound

References

*"Currency, Continental" in Vol. II of "Harper's Encyclopedia of United States History", Harper & Brothers, 1905.