12/05/2023
To fund the Revolutionary War, the Continental Congress and State governments printed “Bills of Credit” which could be exchanged for gold or silver at a future date.
Prior to the Revolutionary War, state governments printed bills of credit to pay off their own debts in order to pay for various military conflicts throughout the colonies. These bills were also used by colonists to pay their taxes to their respective state governments. However, the various “bills of credit” from each of the Thirteen Colonies led to confusing exchange rates from colony to colony, leading to England passing several Acts that restricted the Colonies’ ability to print their own money.
The Continental Congress and state governments would defy this British Act and print their own paper money to fund the Revolutionary War. However, as state and Continental governments printed off a large number of these notes (in addition to the counterfeits made by several British gangs), these bills were essentially worthless after the Revolutionary War. In 1780, just five years after the Continental Congress began to create their own bills, many of the bills only retained 1/40th of their original face value.
In 1782, the Continental Congress appointed Robert Morris as Superintendent of Finance of the United States. During his tenure, he advocated for the Bank of North America, which helped to stabilize the dollar using bullion coins loaned to the US from France. In 1787, the Continental Congress banned states from printing their own money.