Gold, Peace, and Prosperity: The Birth of a New Currency

Ron Paul

“Not Worth a Continental”

[19] In more recent times, to finance our Revolutionary War, the Continental Congress issued paper money in great quantities.  Over a period of about four and a half years, the Continental currency fell from a value of one paper dollar per one gold dollar, to about 1,000 to one.

William Gouge, writing in 1833, quotes one member of the Continental Congress:  “Do you think, gentlemen, that I will consent to load my constituents with taxes, when we can send to our printer, and get a wagon load of money, (25 sheets) of which will pay for the whole?”4

Most of the burden, Mr. Gouge notes, fell on the patriots, “as it was in their hands the paper depreciated.  The Tories, who had from the beginning no confidence in it, made it a rule to part with it as soon as possible.”5  Those who trusted the Congress were destroyed; the cynics were not.  As a result of this paper money inflation, wrote one of our earliest economists, Pelatiah Webster, “frauds, cheats, and gross dishonesty are introduced, and a thousand idle ways of living attempted in the room of honest industry; economy, and diligence, which have heretofore enriched and blessed the country....6

“While we rejoice in the riches and strengths of our country, we have reason to lament with tears of the deepest regret, the most pernicious shifts of property which the irregularities of our finances introduced, and the many of thousands of fortunes which were ruined by it; the generous, patriotic spirits suffered the injury: the idle and avaricious derived benefit from said confusion.”7

The phrase “Not worth a Continental” records the fate of this paper currency.

Notes

  1. A.S.P. — William M. Gouge, Part II of A Short History of Paper Money and Banking in the United States (Philadelphia: T. W. Ustick, 1833), 27.

  2. Gouge is referencing Webster here.  See Footnote D to Pelatiah Webster, An Essay on the Danger of too much circulating Cash in a State, the ill Consequence thence arising, and the Necessary Remedies (Pennsylvania Evening Post, October 5, 1776, under the signature of A Financier).  Webster quotes the congressman as saying, “Do you think, gentlemen, that I will consent to load my constituents with taxes when we can send to our printer and get a wagon-load of money, one quire of which will pay for the whole?”

    See also Lawrence W. Reed, “The Times that Tried Men’s Economic Souls” (The Freeman, March 2008).

  3. A.S.P. — Gouge, 27.

  4. A.S.P. — Gouge, 29–30.  See also Pelatiah Webster, “A Fifth Essay On Free Trade and Finance” (Philadelphia, PA: March 30, 1780).

  5. Webster writes, “For want of the tax, the morality and industry of the people are greatly diminishedFrauds, cheats, and gross dishonesty are introduced, and a thousand idle ways of living are attempted in the room of that honest industry, economy, and diligence which heretofore blessed and enriched this country.  And as an estate in a country of honest, industrious people, is better than in one filled with idle rogues; and as all property is hereby rendered more unsafe and less valuable; it is very easy to see, that the loss of each individual in this respect, will be very considerable, and must, on a very moderate computation, much exceed the tax required to remedy the whole mischief.”

  6. A.S.P. — Gouge, 30.  See also Pelatiah Webster, “A Fourth Essay On Free Trade and Finance” (Philadelphia, PA: February 10, 1780).

  7. Writes Webster, “But whilst we rejoice in the riches and strength of our country, we have reason to lament, with tears of the deepest regret, the most pernicious shift of property which the above mentioned irregularities of our finances introduced, and the many thousands of fortunes which were ruined by it; the generous, patriotic spirits suffered the injury; the avaricious and idle derived benefit from the said confusion.”