sive emigrants; so that every person's share of the debt will be constantly diminishing by others coming in to pay a proportion of it." 1

The injustice of being compelled to accept the government notes in the payment of debts previously contracted had now become so great as to be no longer tolerated. Even Washington would no longer receive them in the payment of old debts, but at their value. In a letter to the manager of his estate, Lund Washington, written under date of the 17th of August, 1779, he said:

"Some time ago you applied to me to know if you should receive payment of General M's bonds, and of the bond due from the deceased Mr. M's estate to me; and you were, after animadverting a little upon the subject, authorized to do so. Of course, I presume the money has been received. I have since considered the matter in every point of view in which my judgment enables me to place it; and am resolved to receive no more old debts (such, I mean, as were contracted and ought to have been paid before the war) at the present nominal value of the money, unless compelled to do it, or it is the practice of others to do it. Neither justice,

1 The amount of the public debt incurred in the prosecution of the war, in addition to that incurred by the several States, was given in the address from which the preceding extract was made, as follows:

At that time the whole amount received from taxation, through requisitions upon the States, amounted only to $3,027,560. The whole amount supplied by the people up to the date of the address, other than that furnished on the notes, equalled $29,216,469. The domestic debt was chiefly in the form of certificates, or acknowledgments of the government of supplies furnished it, which were given largely by commissaries in payment of articles seized by them, and represented the estimated value of such as were taken.

The following statement of expenditures of the government for 1778, and the proportions of paper and metallic money used, will show the extremities to which it was reduced:

The amount of specie amidst such a vast mass of paper was very like the wit of Gratiano in the play.

reason, nor policy requires it. The law, undoubtedly, was well designed. It was intended to stamp a value upon, and to give a free circulation to, the paper bills of credit; but it never was nor could have been intended to make a man take a shilling or sixpence in the pound for a just debt which his debtor is well able to pay, and thereby involve himself in ruin. I am as willing now as I ever was to take paper money for every kind of debt, and at its present depreciated value for those debts which have been contracted since the money became so; but I will not in future receive the nominal sum for such old debts as come under the above description, except as before specified. No man has gone, and no man will go, further to serve the republic than myself. If sacrificing my whole estate would effect any valuable purpose, I would not hesitate one moment in doing it; but my submitting in matters of this kind, unless the same is done by others, is no more than a drop in the bucket.".

And in a letter of the 22d August, to the President of Congress, Mr. Reed, he says:

"The sponge, which you say some gentlemen have talked of using, unless there can be a discrimination and proper saving clauses provided (and how far this is practicable I know not), would be unjust and impolitic in the extreme. Perhaps I don't understand what they mean by using the sponge. If it be to sink the money in the hands of the holders of it, and at their loss, it cannot in my opinion stand justified upon any principles of common policy, common sense, or common honesty. But how far a man, for instance, who had possessed himself of twenty paper dol lars by means of one or the value of one in specie, has a just claim upon the public for more than one of the latter in redemption, and in that ratio according to the periods of depreciation, I leave to those who are better acquainted with the nature of the subject, and have more leisure than I have, to discuss." 2

The solution of this matter had now come to transcend the forecast of even Washington himself. He would not repudiate the notes; but, certainly, a person who had contracted to pay $10 in coin, had no right to discharge the debt by a note which cost him only $1 in coin; nor had the holder of a note for $10, which cost him only $1, a right to be paid its full amount. No solution was, in fact, possible; for matters had now reached such a pass that the proper one was to let the money die in the hands of its holders. Less suffering and less injustice would result from this mode of disposing of the problem, than any other. Justice could never have been done by any attempts

1 Life and Writings of Washington, vol. vi. p. 821.
2 Ibid. p. 332.

to take in the money at any equitable scale. If it were to be taken in, it could only be done by raising the necessary amount by a tax, which would have to be assessed somewhat in ratio. to the amount held by each. To retire it, therefore, by taxation or payment would be to employ a useless machinery to accomplish that which could be better accomplished, with the same justice, by really doing nothing.

As no argument urged by Congress had any effect whatever in raising the value of its notes, its only course was to make the most of its power of issue while any thing could be had for them. The amount issued between Aug. 26 and Nov. 29, 1779, the date of the last one, equalled $10,000,000; the total amount up to the last date being $241,552,280.1 At the close of the year, the notes had fallen to about forty for one of coin. With such a depreciation, any further issue would have been regarded as too absurd to be attempted. Congress, however, was by no means at the end of its expedients. On the 18th of March, 1781, it issued an address, which, after reciting the necessities which had driven it to the issue of a large amount of notes, and their great decline in value, declared it to be expedient to reduce the amount outstanding: and for that purpose it made a requisition upon the States for $15,000,000 of notes per month, to continue up to April, 1781;

1 Statement showing the dates of issue, and amounts of Continental money issued, during the War of Independence :

and that the amounts so taken in were to be cancelled, except those issued the preceding January and February, which would be necessary for the operations of government. In lieu, however, of the payment of notes, gold and silver were receivable in payment of such requisitions, at the rate of $1 for $40 of paper. As fast as the notes were brought in and cancelled, new notes were to be issued, at the rate of $1 to $20 taken in, redeemable in specie in six years; and to bear interest at the rate of 5 per cent per annum, also payable in specie at the redemption of the notes, or annually, at the election of the holder the notes to be issued on the funds or security of the several States; for the payment of which, however, the faith of the United States was to be pledged. Of such notes, six-tenths were to go to the States, and four-tenths to the United States, to be credited to the States on whose funds or security they were issued; the new notes to be receivable in payment of the monthly quotas, at the same rate as specie. These notes, however, were no better received than the old ones; nor does it appear that any considerable amounts of them ever got into circulation.1 The public had so often been deceived and imposed upon that it turned a deaf ear to all propositions of the kind. The days of the Continental paper money, in whatever form issued, were numbered. Congress did not attempt to press the circulation of its new notes. While the

"Our new paper money," says Josiah Quincy in a letter to Washington, "issued by recommendation of Congress, no sooner began to circulate than two dollars of it were given for one hard one (that is the rate of the old). To restore the credit of the paper by making it a legal tender, by regulating acts or by taxes, are political manœuvres that have already proved abortive; and for this obvious reason, that, in the same proportion as ideal money is forced into currency, it must, from the nature of every thing fraudulent, be forced out of credit. I am firmly of the opinion, and think it entirely defensible, that there never was a paper pound, a paper dollar, or a paper promise of any kind, that ever yet obtained a general currency but by force or fraud, generally by both.". Letters to Washington, vol. iii. p. 157.

"The people of the States at that time had been so worried and fretted, disappointed and put out of humor, by so many tender-acts, limitations of prices, and other compulsory methods to force value into paper money, and compel the circulation of it; and by so many vain funding schemes, declarations, and promises, all of which issued from Congress, but died under the most zealous efforts to put them into operation and effect, that their patience was all exhausted. I say, these irritations and disappointments had so destroyed the courage and confidence of these people, that they appeared heartless and almost stupid when their attention was called to any new proposition."-Webster's Essays, p. 116.

old steadily declined in value, they were actively dealt in, till their price fell so low that even their holders had no interest in seeking to dispose of them. Their activity, even when they fell as low as 500 to 1, excited the wonder of writers at the time. There always appeared to be a plenty of parties ready to take them, till they fell below this rate, against the chance that some provision might be made for their ultimate redemption.

The cessation of issue was a practical demonetization of the Continental paper, although, for some time thereafter, it remained on the statute books, not only of Congress but of the several States, as lawful money. Early in 1781, however, the former recommended the total repeal of all laws making its notes money. The States, one after another, adopted the recommendation. No sooner, however, had it been seen that the notes, from their worthlessness, were to go out of circulation, than the people began to take measures to provide themselves with a currency of coin. The process was so noiseless and natural as to attract no attention whatever. Metallic money seemed to be improvised by the necessity for its use. All that was wanting was to leave the people free to act solely with a view to their own welfare. It is with money as with every other help by which the operations of society are carried on. It may be that the best cannot be immediately had; but it will always be sought until it is secured. Its realization will be free from disturbance in ratio as the people are emancipated from the control of government. No sooner had the occasion or necessity arisen for it, than coin appeared. Large amounts were brought into the country from the subsistence and payment of the British troops. The foreign loans were paid in coin. Considerable amounts of silver were, during the war, constantly received from Spain and Mexico, through Havana. From the beginning of 1780, hard money, as it was termed, began to show itself in large amounts. Indeed, from that time there appears to have been no lack of specie in the country. "Gold and silver," says Paine, "that for a while seemed to have retreated again into the bowels of the earth, have once more risen into circulation, and every day adds a new strength to trade, commerce, and agriculture."

1 The Crisis, p. 209.