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New Emissions of Continental Bills. Plans for Redemption. Counterfeits issued by the Tories. First coined Money.
On the 25th of July the Continental Congress ordered the issuing of one million of dollars more,' and from time to time new emissions were authorized, to meet the demands upon the treasury, until, at the beginning of 1780, the enormous sum of two hundred millions of dollars had been issued, no part of which had been redeemed. While the amount of the issues was small, the credit of the bills was good; but when new emissions took place, and no adequate measures for redemption were exhibited, the people became sus. picious of those frail representatives of money, and their value began to depreciate. This effect did not occur until eighteen months from the time of the first emission had elapsed. Twenty millions of the Continental bills were then in circulation, besides a large amount of local issues by the several states. It was now perceived that depreciation was inevitable, and Congress proposed, as a substitute for further issues, a loan of five millions, at an interest of four per cent. A lottery was also authorized, designed to raise a like sum on loan, the prizes being payable in loan office certificates. These offices were opened in all the states; the rate of interest was raised from four to six per cent., but the loans came in very slowly. The treasury ran low, the loan offices were overdrawn by the commissaries drafts, the issue of bills was reluctantly recommenced, and ten additional millions were speedily authorized. During the year 1778 sixty millions and a half were added to the issues already made. The commissioners in France (see page 86) had been instructed to borrow money there, but as yet they had been unsuccessful.
Various plans were proposed at different times to sink those issues of bills of credit, but none could be put into efficient practical operation. The several states issued paper money independently of the Continental Congress; and the Loyalists, aided by Sir Henry Clinton, in the autumn of 1778 sent out large quantities of counterfeits of the Continental emissions of May 20th, 1777, and April 11th, 1778, and scattered them as widely among the people as their means would allow. Under these circumstances, Congress felt the necessity of making an extraordinary effort to sustain the declining credit of the bills, by making some provision for their actual redemption. On the 2d of January, 1779, it was “Resolved, That the United States be called on to pay in their respective quotas of fifteen millions of dollars for the year 1779, and of six millions of dollars annually for eighteen years from and after the year 1779, as a fund for sinking the emissions and loans of the United States to the 31st of December, 1778, inclusive.” It was provided that any bills emitted by order of Congress prior to 1780, and no others, should be received in payment of those quotas. A period of five months was given for taking out of circulation the emissions which had been counterfeited, during which time they were to be received into the public treasury in pay
size), bearing the same device on one side. On a three dollar note is a device representing a stork struggling with an eagle—the feeble colonies warring with strong Great Britain; motto, “THE REsult Is UNCERTAIN.” This bill is dated eighteen days after the adoption of the Declaration of Independence. A majestic oak-tree; motto, “I shall, FLourish THROUGH AGEs of Ages.” A hand planting a young tree; motto, “For posterity.” A boar encountering a spear; motto, “DEATH, or LIFE with Decency.” A harp, denoting harmony; motto, “LARGE things Arte Consonant with sMALL ones.” A figure of Jus- Facsimile of the first Mosex conned by the UNrred Statios. tice; motto, “THE will of Justice.”
* As the signing of so many bills would require more time than the members could spare from public duties, Congress appointed twenty-eight gentlemen to perform the duty, allowing each one dollar and thirtythree cents for every thousand bills signed and numbered by him. It was necessary for each bill to have the signature of two of them.
Depreciation of the Paper Money. Confusion in Trade. Foreign and Domestic Debt. Specie Value of the Bills.
ment of debts and taxes, and also into the Continental loan offices, either on loan or to be exchanged for other bills of a new tenor, bearing interest at five per cent., and redeemable in specie within six years. The old bills thus called in were to be destroyed.’ This effort, like its predecessors, was unsuccessful. Prices rose as the money sank in value, and every branch of trade was deranged. In several states laws limiting prices were still in force, and the rapid depreciation of the bills threw all contracts into confusion. The amount in circulation on the 1st of September, 1779, was a hundred and sixty millions. Congress resolved that the issues should not exceed two hundred millions in the whole. The loans prior to the 1st of August, 1778, the interest of which was payable in bills on France, were seven millions and a half. The loans contracted since were more than twentysix millions. The debt abroad was estimated at four millions. Only three millions out of the sixty millions of paper dollars already called for from the states had been paid into the public treasury. Congress was powerless to stay the downward tendency of the paper currency. It continued to depreciate and prices to rise. Early in 1780, forty paper dollars were worth only one in specie.” The commissaries found it extremely difficult to purchase supplies for the army, for the people refused to exchange their articles for the almost worthless paper. Direct taxes had been unsuccessfully tried to replenish the treasury, and, as supplies could not be obtained, a speedy dissolution of the army and abandonment of the rebellion seemed inevitable. Congress was obliged to open new resources for the supply of the army, and required each state to furnish a certain quantity of beef, pork, flour, corn, forage, and other articles, which
were to be deposited in such places as the commander-in-chief should determine. The states.
were to be credited for the amount at a fixed valuation in specie. This scheme was utterly
* Journals of Congress, vol. i., p. 5. * The following bill of items is preserved, and illustrates the value of the Continental bills in 1781:
I pair boots . . . . . . . . . . . . . . . . . . . . . . . . . . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $600 6; yds. calico, at 85 ds. . . . . . . . . . . . . . . . . . . . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 752 6 yds. chintz, at 150 ds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 900 44 yds. moreen, at 100 ds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450 4 hikss., at 100 ds. . . . . . . . . . . . . . . . . . . . . . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 400 8 yds. Quality binding, 4 ds. . . . . . . . . . . . . . . . . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 32 1 skein of silk . . . . . . . . . . . . . . . . . . . . . . . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 10
If paid in specie. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . £1810s
Received payment in full,
The following scale of depreciation is also preserved:
1777. 1778. 1779. 1780. 1781.
• Captain MLane was the father of the late Secretary of the Treasury.
Unjust Financial Law. Washington's Deprecation of it. Hopes of the Tories. Cipher Writing of the Loyalists.
impracticable, from the want of authority to enforce the demands, and the distance of several states from the army, and Congress speedily abandoned it. The several states were then recommended by Congress to pass laws making paper money a legal tender, at its nominal value, for the discharge of debts which had been contracted to be paid in hard cash. Such laws were enacted, and many dishonest debtors took advantage of them. Although the bills were passing at the rate of twenty for one, they were made a lawful tender, and debts were discharged at a cheap rate. It was one of the most unwise and unjust acts committed by Congress during the war. The honest and simple were defrauded, and the rogues were immense gainers." The people justly raised a great clamor, while the friends of the king greatly rejoiced in seeing the growth of what they deemed the canker-worm in the seed of rebellion.”
Among the most prominent evils arising from the rapid depreciation of the paper was a spirit of speculation and fraud, which excited unfounded jealousies and suspicions. The
• Washington opposed the measure from the beginning as iniquitous, unjust, and fraught with the direst evils. He was a considerable loser by it. While at Morristown, a respectable man in the neighborhood was very assiduous in his attentions to the chief, and they were generally reciprocated. This man paid his debts in the depreciated currency, under the law, and the fact became known to Washington. Some time afterward the man called at head-quarters, but the general hardly noticed him. This coldness was observed by the officers, and La Fayette remarked, “General, this man seems 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.” * Rev. Charles Inglis, who was rector of Trinity Church, in New York, from 1777 until 1782, and, after the peace, was made Lord Bishop of Nova Scotia, in a letter to Joseph Galloway, the great Pennsylvania Loyalist, then in London, thus writes, under date of December 12th, 1778, in reference to the immense issues and the depreciation of the bills of credit: “The see simple of the thirteen United States is not equal to this sum, which is still increasing. I therefore think it utterly g Ja s impossible to support the credit of this money; and were there nothing else, this would * A Ż, be sufficient to destroy the rebellion, if Britain would hold the places she now possesses, kva and keep a moderate number of cruisers on the coast. The mode of securing French #: V * debts, by which the colonies became mortgaged for the fripperies of every French peddler, is another embarrassing article on this head, which must prove ruinous to America.” 4– # *E Daniel Coxe, a member of the king's council of New Jersey, and a refugee in New York, d writing to Galloway, under date of February 14th, 1779, says, “The current deprecia- + Z/ p tion of their money now at Philadelphia is fifteen for one; and tho' there are clubs and private associations endeavoring to support its credit, nothing will do, nor can any zz thing, in my opinion, now save 'em on this point but a foreign loan, and which, though 7 2 24 they affect otherwise, I think they can not negotiate any where in Europe, unless all the fo o moneyed nations are turned fools; and if they can not command a loan, and are pre- Ls Zo *AN
vented from all remittances and trade southward, they must sink, never again, I hope, o/, 2 to rise....... In short, they never were so wretched and near destruction as at this % *YC */ moment, and, unless some unforeseen event takes place in their favor soon, I firmly J. expect the next summer must end their independence and greatness. . . . . . . For God's # *2. Żv
sake, then, encourage every degree of spirit and exertion all you can, and quickly; a ' good push, and they go to the wall infallibly.” Such was the tenor of the letters sent / os’= to England by the Loyalists from 1778 until 1781. The financial embarrassments of Congress gave Loyalists and friends of government strong hopes that it would accom- curmes Airmaner. plish what British arms had failed to do. It may be here remarked that many of the letters which passed between the Loyalists here and their friends abroad were written in cipher, so that, should they fall into the hands of the patriots, they might not be read, to the disadvantage of the writers and
CLINTon has sent a secret Expedition up *#7 #&#-Ato “a wor-7424.7xo~ 2-#6%/07/*zo. the Hudson to intercept WashingtoN.
Fac-SIMILE or CIPHER WRITING.
their cause. I here give, for the gratification of the curious, an alphabetical key, and a fac-simile or two lines of the cipher writing, copied from one of the letters of a distinguished Tory, together with the interpretation.
Charge against General Greene. Excitement throughout the Country. Riot in Philadelphia. Convention at Hartford
rapid rise in prices was unjustly attributed to extortion on the part of public officers, and even General Greene, who acted as quarter-master general, was accused of enriching him. self at the public expense, because he received for his salary a per centage on all moneys disbursed, and the depreciation made the nominal amount vast. Individual speculators and monopolizers were the extortioners and the oppressors of the people, and of them Washington said, in a letter to President Reed, “I would to God that some of the more atrocious in each state were hung in gibbets upon a gallows four times as high as the one prepared for Haman.” It was remarked, “that while the honest and patriotic were impoverished, rogues and Tories were fast growing rich.” Toward the close of the summer of 1779, the country was greatly agitated by the existing financial embarrassments. Meetings were held in the chief cities on the subject. In Philadelphia, party feelings, growing out of the currency question, became so strong and decided that a riot took place under the very eyes of Congress. A committee had undertaken to regulate the prices of flour, rum, sugar, molasses, coffee, salt, and other articles of general use. Robert Morris and other leading merchants refused to conform to the regulation. Wilson, Clymer, and Mifflin, with their friends, were threatened with banishment to New York, as abettors and defenders of the Tories. They armed themselves, and repaired to october, Wilson's house. A mob, with fire-arms and two cannons, approached. Some 1779. shots were fired, and one of the defenders of the house was killed. A man and a boy of the mob were also killed. The mob were about to force the door, when Reed, the president of Congress, àppeared with some cavalry, and partially restored order, but it was necessary for the citizens to turn out and patrol the streets. It was several days before quiet was restored. In the midst of this general excitement a convention of the five Eastern States october 20 was held at Hartford, and Congress, unable longer to disguise the fact that its 1779. bills of credit were permanently depreciating, approved of, and recommended, a plan elaborated by that convention, to regulate prices on the basis of twenty paper dollars for one of specie. This measure partially quieted the public mind. Before the end of the year the two hundred millions were emitted, and the press was stopped." At that time the depreciation stood thirty for one, and was constantly increasing. The diversion of labor from agricultural and other industrial pursuits, the destruction of grain by the belligerent forces in various parts of the country, combined with the embarrassed state of the finances of government, which we have briefly considered, threatened famine and general bankruptcy; and during the winter and spring of 1780, when Washington had his quarters at Morristown, the hope of the patriot was suffering an almost total eclipse; it was the gloomiest period of the Revolution. The financial operations which subsequently occurred will be noticed hereafter, such as long drafts on the United States commissioners abroad, and foreign loans. We have made a wide but necessary digression in turning aside to view the financial af. fairs of the patriots at the period under consideration. Let us resume our journey and historic annotations. I left Morristown for Springfield in the early morning train. The air was some, is cool and bracing, and I had a pleasant walk of about a mile from the station, 1848. at the foot of the Short Hills, to the pretty village lying in the bosom of a fertile plain near the banks of the Rahway River. The trees upon the surrounding hills were beginning to assume the variegated livery of autumn, not from the effects of frosts, but of a long drought; yet on the plain every thing was as green as in June, except the ripening maize. I sought for the “oldest inhabitant,” and found him in the person of the venerable Gilbert Edwards, who was a half-grown boy at the time of the battle of Springfield, and sold apples to the American soldiers when they came down from the Short Hills to oppose the invasion of the enemy under Knyphausen, the German general.” He kindly accompanied me to the place
• Pitkin, Marshall, Ramsay, Gordon, Sparks, Hildreth. * General, the Baron Knyphausen, was a native of Alsace, then one of the Rhenish provinces. His father was a colonel in the German regiment of Dittforth, in the service of John, Duke of Marlborough. The general was bred a soldier, and served under Frederic the First, father of Frederic the Great of Prussia. The v
Battle-ground at Springfield. Invasion by General Knyphausen. Clinton's Designs. Plan of the Springfield Battle.
where the principal engagement occurred, which is on the right of the present turnpike leading from Springfield to Elizabethtown, and a few rods westward of the Rahway. Nothing now remains upon the spot to indicate military operations, for no works were thrown up on the occasion. The battle was the result of an unexpected invasion. The knoll on which the Americans were posted, then covered with apple-trees, is now bare, only a few stumps remaining ; but on the eastern slope a few of the trees are left, venerable in form and feature, and venerated for their associations. One of them is pictured in the engraving. It bears several scars of wounds inflicted by the cannon-balls of the approaching enemy. They are “honorable scars,” and I bespeak for the veteran a perpetual pension of respect. On the 6th of June, 1780, General Knyphausen, then in tem. porary command of the British troops in New York during the absence of Sir Henry Clinton at the south, dispatched Brigadier-general Mathews from Staten Island with about five thousand troops, who landed at Elizabethtown Point. He had been informed that the American army at Morristown was much dissatisfied, and ripe for mutiny and treason, and that the people of New Jersey were ready to join the royal standard as soon as ample protection should be guarantied them. Influenced by these opinions, Knyphausen ordered Mathews to march toward Morristown, but the annoyances which he met with on the way soon undeceived him. He burned the village of Connecticut Farms, and advanced on Springfield, but, being informed that Washington had sent a force to oppose him, he wheeled and returned to Elizabethtown. Many of his soldiers were cut off during the recession, by small parties of Jerseymen concealed behind fences, rocks, and bushes. On reaching Elizabethtown Point, he intrenched his forces within the old works thrown up there by the Americans, where they remained about a fortnight. In the mean while, General Clinton arrived from the south, and determined to carry out the plan arranged by Knyphausen, to capture the stores at Morristown, and, if possible, draw Washington out from his strong position among the Short Hills, into a general engagement. He also took pains to mislead Washington, by em
twelve thousand German troops hired by the English government, for service in America, were placed under his command, and the Hessians were led by the Baron de Reidesel. He arrived with his troops, under convoy of Admiral Lord Howe, in June, 1776, and was engaged in the battle of Long Island in August following. He was also in the battle of Brandywine, and commanded an expedition to Springfield, New Jersey. For some months during the absence of Sir Henry Clinton at the south, Knyphausen was in command of the city of New York. He was about sixty years of age, possessed of a fine figure, and was remarkably amiable and simple-minded. La Fayette used to tell an anecdote concerning him, on the authority of British *... The passage to America was very long, and one night, while playing whist in the cabin, Knyphausen suddenly turned to the captain and said, with an air of much sincerity, “Captain, ain't we hab sailed past America?” He died on the frontiers of Germany toward the close of the last century. * Explanation of THE MAP.-The stream with branches, and running in a southerly direction, is the Rahway River; a is the house (still standing) of Mrs. Mathews, near which the enemy formed for battle; b, the site of Byram's Tavern, at the foot of the first range of hills; c, the Springfield and Elizabethtown turnpike; d, the Vauxhall Road; e, the first position of the brigades of Stark and Maxwell, near the mill, and north of the rail-road; f, Shrieve's regiment at the second bridge; g, the mill; h, post of the Americans, on the hills in the rear of Byram's Tavern. The other localities are printed on the map.