Witherspoon, and Gouverneur Morris, to consider the financial situation. The Committee made its report to Congress on the 15th of September, 1778. It was not, however, acted upon till the 8th of October following.

The first question that came up for consideration was the recommendation of the Committee to take off the limitation of the price of gold; that is, to repeal the law which had attempted to make the notes equal in value to a corresponding amount of the former. They had now become so depreciated that the absurdity of the law was too manifest to allow it to remain on the statute-book. The recommendation was adopted; and by it the first direct blow to the credit of the notes was dealt by the very party issuing them. It was an acknowledgment of a difference in value between them and coin, although payable in coin on their face. The whole. question of their value was now opened up for discussion. If they were not worth their face, what were they worth? The people at once saw the abyss over which they stood. That which they had acquired with so much labor and toil might become utterly worthless. It was charged that the Act meant repudiation. This was indignantly denied. Congress, as usual, protested its good faith, and that every dollar of the notes would be eventually discharged. The time in which such protests and assurances could have much effect had long since passed. The notes, however, continued to be issued in greater sums, and to decline more rapidly than ever in value. That they did not go at once out of circulation was due to the fact, that every issue served to pay old debts at a reduced cost to the debtor. There were always plenty to take them, provided they could be had at a sufficient discount. Swindling was at once reduced to a system, Congress all the time abetting it, by issues which were always put upon the market, each at a less rate than the previous one. All could run into debt, with a certainty of making money by the operation.1

1 The following quotation from Sparks' "Life of Washington" will show the use made of the notes, as well as what the latter thought of it:

"When the army was at Morristown, a man of respectable standing lived in the neighborhood, who was assiduous in his civilities to Washington, which were kindly received and reciprocated. Unluckily, this man paid his debts in the depreciated currency. Some time afterward, he called at head-quarters, and was introduced as usual to the General's apartment, where he was then conversing with some of his officers. He bestowed very little attention upon the visitor.

Although at this day a retrospect would seem to discover nothing but imbecility and folly in the financial operations of the Revolutionary Government, and would show it to be chargeable with no small part of the want of success of the military operations of the country, and the impoverishment and distress which followed, it was not, considering its organization, properly liable to any such censure. It was simply a government upon which the gravest duties were imposed, but which was wholly without the power for their execution. Such a government, like an individual, assuming every thing, and capable of nothing, - speedily falls into utter contempt. It could represent and implore, but not command. It derived its power from thirteen distinct peoples, all foreign to and jealous of each other; and each fearing that it should do more than its share in the struggle in which all were engaged. Their only tie was hatred of the common enemy. Apart from this, there was hardly more resemblance, sympathy, or cohesion between Massachusetts and Virginia- the two leading States in the contest than between England and France. They were as antagonistic as was possible for two States having a common parentage. It was a common parentage which rendered the antagonism between them all the more irreconcilable. Had they not belonged to the same race, their differences would have been held to be constitutional, and therefore to be respected. Where the difference is one between members of the same race, the assumption is that one must be wrong, and that that one must yield. To yield may be to give up whatever a people holds most dear. Opinion, where its defeat involves such consequence, is of all things that most worth fighting for. The history of this country is the history of two great tendencies which are as old as humanity, and which, since its settlement, have divided its people into two hostile camps, that which seeks to subject all, high and low, to the restraints of a common rule; and that which refuses such subjection. It is the difference between government and no

The same thing occurred a second time, when he was more reserved than before. This was so different from his customary manner that Lafayette, who was present on both occasions, could not help remarking it; and he said, after the man was gone, General, this man seems to be much devoted to you, and yet you have scarcely noticed him.' Washington replied, smiling, I know I have not been cordial: I tried hard to be civil, and attempted to speak to him two or three times; but that Continental money stopped my mouth.'"-Life and Writings of Washington, vol. i. p. 333.

The

government, order and anarchy, progress and decay. North, engaging from necessity in commerce and manufactures, sought the world for a market, and immunity wherever their people or products could go. The South, devoted to agriculture, with their markets mostly in Europe, and with institutions. founded on force, would take counsel only of their necessities and fears. To commit themselves to the guidance of ideas, or to the people of the North, would be to court the overthrow of the very conditions upon which all their prosperity was supposed to rest. The history of this country is but a history of the struggle for the mastery of opposing tendencies and ideas, growing out of conditions differing radically in kind. Hence the importance of studying well the period from the formation of the Provisional Government in 1775 to the adoption of the Constitution in 1788. It is the only mode by which we get at the motives that led to the formation and. adoption of the Constitution, and the different constructions given to its provisions. The great question then, as it has ever since been, was whether the second government only repeated the loose confederation which preceded it, a government without purposes or powers; or whether it was an autonomy within itself, paramount to all, and responsible to nothing but its own will, controlled and guided, to a certain extent, by that provision by which the competency of its acts was to be decided by a tribunal provided by the Constitution itself. That instrument was but the result of the reaction against the anarchy and barbarism toward which the country was then rapidly tending. He who did the most to secure its adoption understood best the incompetency and worthlessness of the government it superseded.1

1 So loose were the ties by which the confederacy was bound together, so limited was the control exercised by Congress over the States, and so little inclined were the parts to unite in a consolidated whole, that, from imbecility on the one hand and public apathy on the other, Washington became more and more fearful of the consequences. "The great business of war," said he," can never be well conducted, if it be conducted at all, while the powers of Congress are only recommendatory. While one State yields obedience, and another refuses it, while a third mutilates and adopts the measure in part only, and all vary in time and manner, it is scarcely possible that our affairs should prosper, or that any thing but disappointment can follow the best-concerted plans. The willing States are almost ruined by their exertions; distrust and jealousy ensue. Hence proceed neglect and ill-timed compliances; one State waiting to see what another will do. This thwarts all our measures, after a heavy though ineffectual

The country continuing to suffer greatly from the spurious notes put upon the market, Congress was compelled to call in those issued on May 22, 1777, and April 11, 1778, which had been more extensively counterfeited than any others. The order for calling them in excited great complaints. No one would take them in trade, as the government was not immediately prepared to issue new notes for the old. The loss and inconvenience caused, as well as the distress prevailing at the time, will be seen by the following letter, preserved in the Pennsylvania archives:

"How comes it that Congress, by their resolve relative to the two emissions of May, 1777, and April, 1778, have set the country in such a ferment, and given room for a set of speculating people who are enemies to the real good of their country to take occasion from it to depreciate the value of these two emissions in the manner they have done, and are now daily doing? There are a set of them here very busy in this matter; that by their management within this day or two it is rendered twenty-five per cent worse than the other emissions; which, God knows, were sunk low enough before. Our butchers, bakers, and farmers begin to refuse it entirely, owing to the stories propagated about it. Must people who have this money either lose a fourth of it or starve? And when the time comes for exchanging it, must they spend half the value of the little they have in taking it to Philadelphia to place it in the office? and after that wait sixty days, and attend a second time for payment? Indeed, I think the resolve is not one of the wisest, and wish to see these evils speedily remedied. The merchants, or rather hucksters, of Philadelphia are playing the same there. Surely Congress can call in these or any other emissions in a manner less injurious to the country. I am so angry at this affair that I hardly know what I write, and so vexed at the daily schemes

expense is incurred." And he adds, on the point of vesting Congress with competent powers, "Our independence, our respectability and consequence in Europe, our greatness as a nation hereafter, depend upon it. The fear of giving sufficient powers to Congress, for the purposes I have mentioned, is futile. A nominal head, which at present is but another name for Congress, will no longer do. That honorable body, after hearing the interests and views of the several States fairly discussed and explained by their representatives, must dictate, and not merely recommend and leave it to the States to do afterwards as they please; which, as I have observed before, is in many cases to do nothing at all." - Life and Writings of Washington, vol. i. pp. 349-350.

1 The hopes of the enemy were largely fed on the probable failure of the Continental currency. General McDougal, writing from Peekskill to General Joseph Reed, says, The enemy is confident our currency will fail us, ... and that, whenever the supplies for the army fail, the people will return to their allegiance. He is now counterfeiting another emission, which will soon be out." -Life of President Reed, vol. ii. p. 57.

for depreciating of our currency, that I sometimes think we don't deserve the liberty we have been contending for, while such miscreants are suffered to breathe among us. And, indeed, I can't help thinking that the Congress's own servants, such as quartermasters, commissaries of purchase, &c., do as much injury to it as any other speculators; for the more they lay out or charge for articles which themselves have engrossed, the more are their commissions."

The following letter, written from Albany to the "Philadelphia Packet," furnishes another illustration of the manner in which the assumed "hucksters and forestallers with:

were dealt

"Last week, two transgressors who sold rum for more than the regulated price were publicly cried through the city, by order of the committee, as having incurred the just indignation of the people. The inhabitants ordered them immediately to appear before them, being met at the market-place; where, by falling on their knees on a scaffold, they acknowledged themselves guilty, and promised to abide by and assist the orders of the committee: upon which they were discharged. Hard money is not to pass here any longer: we have lately hung up and burned in effigy a dealer in hard money."

One of the greatest alleged grievances during the war was the conduct of a class who were assumed to have purchased merchandise for the very purpose of forestalling the market and growing rich out of the necessities of consumers. They were loaded with every opprobrious epithet, and were not unfrequently thrown into prison and plundered of whatever they possessed. With a currency steadily declining in value, all holders of merchandise appear in effect to be forestallers, by refusing to sell except at an advance necessary not only to meet the present, but the future decline, likely to take place before they can use the money they receive. They must, in addition to a fair profit, charge a considerable advance to cover the risks of the future. What with them is only an exercise of ordinary prudence, is by those who (from a constant decline in the value of the notes they hold) suffer a heavy loss, often treated as a conspiracy to defraud and injure them, to be punished by the severest penalties. With the public, it is always that prices are advanced, not that the money has declined in value. The great majority of holders of merchandise at such periods have not only no design to defraud or oppress, but would gladly sacrifice all profit could they be protected