HKB
Another remarkable defect in the revolutionary government was found in the mode in which it undertook to supply the means of defraying the public expenses. It was a government entirely without revenues of any kind; for, in constituting the Congress, the colonies had not clothed their delegates with power to lay taxes, or to establish imposts. At the time when hostilities were actually commenced, the commerce of the country was almost totally annihilated; so that if the Congress had possessed power to derive a revenue from commerce, little could have been obtained for a long period after the commencement of the war. But the power did not exist; money in any considerable quantity could not be borrowed at home; the expedient of foreign loans had not been suggested; and consequently the only remaining expedient to which the Congress could resort was, like other governments similarly situated, to issue paper money. The mode in which this was undertaken to be done was, in the first instance, to issue two millions of Spanish milled dollars, in the form of bills, of various denominations, from one dollar to eight dollars each, and a few of twenty dollars, designed for circulation as currency. The whole number of bills which made up the sum of $2,000,000 was 403,800.[97] The next emission amounted to $1,000,000, in bills of thirty dollars each, and was ordered on the 25th of July.[98] When the bills of the first emission were prepared, it would seem to have been the practice to have them signed by a committee of the members; but this was found so inconvenient, from the length of time during which it withdrew the members from the other business of Congress, that, when the second emission was ordered, a committee of twenty-eight citizens of Philadelphia was appointed for the purpose, and the bills were ordered to be signed by any two of them.[99] At this time, no continental Treasurers had been appointed.[100]
Such a clumsy machinery was poorly adapted to the supply of a currency demanded by the pressing wants of the army and of the other branches of the public service. The signers of the bills were extremely dilatory in their work. In September, 1775, the paymaster and commissary, at Cambridge, had not a single dollar in hand, and they had strained their credit, for the subsistence of the army, to the utmost; the greater part of the troops were in a state not far from mutiny, in consequence of the deduction which had been made from their stated allowance; and there was imminent danger, if the evil were not soon remedied, and greater punctuality observed, that the army would absolutely break up. In November, General Washington deemed it highly desirable to adopt a system of advanced pay, but the unfortunate state of the military chest rendered it impossible. There was not cash sufficient to pay the troops for the months of October and November. Through the months of December and January, the signing of the bills did not keep pace with the demands of the army, notwithstanding General Washington's urgent remonstrances; and in February his wants became so pressing, that he was obliged to borrow twenty-five thousand pounds of the Province of Massachusetts Bay, in order that the recruiting service might not totally cease.[101]