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. It con

Congress was powerless to stay the downward tendency of the paper currency. tinued 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

1 Journals of Congress, vol. i., p. 5.

2 The following bill of items is preserved, and illustrates the value of the Continental bills in 1781:

The following scale of depreciation is also preserved:

Value of $100 in Specie in Continental Money.

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.

1

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.”

2 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 fee simple of the thirteen United States is not equal to this sum, which is still increasing. I therefore think it utterly impossible to support the credit of this money; and were there nothing else, this would be sufficient to destroy the rebellion, if Britain would hold the places she now possesses, and keep a moderate number of cruisers on the coast. The mode of securing French 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." Daniel Coxe, a member of the king's council of New Jersey, and a refugee in New York,

writing to Galloway, under date of February 14th, 1779, says, "The current deprecia. "49

no

#za

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 thing, in my opinion, now save 'em on this point but a foreign loan, and which, though they affect otherwise, I think they can not negotiate any where in Europe, unless all the moneyed nations are turned fools; and if they can not command a loan, and are prevented from all remittances and trade southward, they must sink, never again, I hope, to rise.... In short, they never were so wretched and near destruction as at this moment, and, unless some unforeseen event takes place in their favor soon, I firmly expect the next summer must end their independence and greatness... For God's 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 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 accomplish 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 +#10850 #1*6 6708 * 67+678 74X7+18/50 EXC

CIPHER ALPHABET.

8#7 #&#650 GE 10878+7x8 X*6#10#SEO.

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 himself 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."

1779.

Toward the close of the summer of 1779, the country was greatly agitated by the exist ing 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 4, Wilson's house. A mob, with fire-arms and two cannons, approached. Some 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, appeared 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 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.

October 20,

We have made a wide but necessary digression in turning aside to view the financial affairs of the patriots at the period under consideration. Let us resume our journey and historic annotations.

September 13, 1848.

I left Morristown for Springfield in the early morning train. The air was cool and bracing, and I had a pleasant walk of about a mile from the station, 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.

O 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

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 temporary command of the British troops in New York during the absence of Sir Henry Clin

ton at the south, dispatch

ed 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 officers. 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.

Washington deceived by Clinton. Second Invasion under Knyphausen.

Disposition of opposing Troops.

The Battle.

barking troops in transports on the Hudson, as if an expedition was intended against West Point. Washington was deceived by this movement, and, with a considerable force, marched toward the Highlands, leaving Major-general Greene in command at Springfield. ton, perceiving the success of his stratagem, crossed over to Elizabethtown, with Knyphausen and additional troops, and at break of day on the 23d the whole army, consisting June, of about five thousand infantry, a considerable body of cavalry, and from fifteen to 1780. twenty pieces of artillery, advanced toward Springfield. They moved in two columns, one on the main road (the present turnpike) leading to Springfield, the other on the Vauxhall Road, leading to the principal pass among the Short Hills, a series of high ridges at the head of the Springfield plains. The Americans were under the immediate command of Greene. The right column of the enemy, on the Vauxhall Road, was opposed by Major Henry Lee with his cavalry, and some pickets under Captain Walker, and the left was confronted by Colonel Dayton, of the New Jersey line.' The remainder of the American troops had been posted upon the roads leading to the different passes over the mountains, and it was with considerable difficulty that they were collected in force at Springfield to oppose the enemy concentrating there. The latter, after maneuvering to gain the flanks of the Americans, formed upon a gentle eminence on the eastern side of the Rahway, near the

house of Mrs. Mathews, which is still standing. Colonel Angell, with his regi-
ment, was posted in the orchard upon the knoll west of the stream, with a single
field piece under the charge of Captain Little, to defend the bridge; and Colonel
Shrieve's regiment was drawn up at the second bridge, in the rear of the town, to
cover the retreat of the Americans, if such a movement should become necessary.
Lee's dragoons, and the pickets under Captain Walker, were stationed at the
Vauxhall Bridge, and the militia were drawn up on the flanks, principally under
the command of General Dickinson, of New Jersey.

The first attack was made by the enemy upon Lee's force at the Vauxhall
Bridge, and the Americans were repulsed. At that instant the British

MRS. MATHEWS'S HOUSE.2

troops near the first Springfield Bridge moved to attack Colonel An-
gell in the orchard. Captain Little played his artillery so briskly
and well, that he kept the enemy east of the bridge for some time;
but bringing their artillery to bear, they pressed forward, forded the
stream (which is there only about two rods wide), and drove the
Americans from their position and across the second bridge. The
artillery of the British, being leveled too high, did but little execu-
tion, except among the branches of the apple-trees, and the Amer-
icans retreated with very little loss. The enemy were warmly re-
ceived at the second bridge by Shrieve's regiment, but overwhelm-
ing numbers obliged the gallant little band of Americans to fall
back and join the brigades of Maxwell and Stark upon the hill.
The situation of the patriot army was now critical.
The enemy
was pushing vigorously forward on the Vauxhall Road, leading in

'Elias Dayton was born in Elizabethtown, New Jersey, in 1735. He joined the army during the French and Indian war. He was a member of the corps called "Jersey Blues," raised in 1759 by Edward Hart, the father of John, one of the signers of the Declaration of Independence. With that corps he fought under Wolfe at Quebec. He was one of the Committee of Safety at Elizabethtown at the beginning of the Revolution; in February, 1778, Congress appointed him colonel of a New Jersey regiment; and in 1782 he was promoted to the rank of brigadier general. He was in several of the principal battles of the Revolution, and had three horses shot under him-one at Germantown, one at Springfield, and one at Crosswick Bridge. He was the first president of the Cincinnati of New Jersey, and, during the life of Washington, enjoyed the warm personal friendship of that distinguished man. He died at Elizabethtown in 1807.

This sketch was made from the left bank of the Rahway, at the site of the old bridge. This is now the rear of the house, but, at the time of the battle, the road was upon this side of it, which formed the front. The deviation of the road is indicated in the map by a dotted line. Remains of the abutments of the ol bridge, where the British crossed, may still be seen.