Continental Money

From Encyclopediak

Continental Money. At the outbreak of the Revolutionary War, the Continental Congress had no means of securing funds except by requisitions upon the several states, and these did not always meet with a prompt response. In such straits the Congress began in June, 1775, to issue paper currency, which was known as continental money. This action was doubtless influenced also by the prevalent theory that paper money repre sented real wealth. Over 242,000,000 had been put into circulation up to March, 1781, when further issues were discontinued. After the first year this continental money began to depreciate, in spite of enactments of Congress that it should pass at par and charges of lack of patriotism against those who refused so to accept it. By the end of 1779 it was worth only two and one-half cents on the dollar. In March, 1780, Congress passed an act retiring these issues at the market value, or replacing them with "new tenor" notes at 20 to 1, bearing five per cent interest. The old notes finally dropped to 1000 to 1 and then ceased to circulate altogether. In 1843 the amount of continental money never redeemed was stated at 73,000,000. See Fiat Money; Money, subhead Paper Money.