than $200,000,000 in
Continental paper were in circulation.

%218. The "New Tenor".%--Then the Continental bills ceased to
circulate, and in March, 1780, Congress called in the old money and
offered to exchange it for a new issue, giving one dollar of the new
paper money, or "new tenor," for forty dollars of the old. But the
attempt to restore credit by such means was a failure, and by the end of
the year 1781 all paper money ceased to circulate.

%219. Certificates.%--Long before this time officials had been forced
to pay debts contracted in the name of Congress with other kinds of
paper, called certificates, and known as treasury, commissary,
quartermaster, marine, and hospital certificates, according to the
department issuing them. To these must be added the "final settlements,"
or certificates given to the soldiers at the end of the war in payment
of their services.

%220. Foreign Debt.%--Besides the debt thus contracted at home,
Congress had borrowed a great sum in Europe.

%221. The National Debt in 1790.%--Thus the debt contracted by the
Continental Congress consisted of two parts. 1. The foreign debt, due to
France, Holland, and Spain, and amounting, Hamilton found, to
$11,700,000. 2. The domestic or home debt, of $42,000,000. But the
states had also fallen into debt because of their exertions in the war.
Just how great the state debts were could not be determined, but they
were estimated to be $21,500,000.

%222. Assumption and Funding.%--For the redemption of this debt
Hamilton prepared two measures,--the funding, or, as we should say, the
bonding, of the foreign and Continental debt, and the assuming and
funding of the state debts. This was done, and Congress ordered stock
bearing interest to be issued in exchange for the old debts, and so
established our national debt, which in 1790 amounted to $75,000,000.

%223. The National Capital.%--Funding the state debts was strongly
opposed by many congressmen, and was not carried till a bargain was made
by which it was agreed that if enough members from Virginia and
Pennsylvania would support the measure to secure its passage through the
House of Representatives, the national government should be removed from
New York to Philadelphia for ten years, and after that to a city to be
built on the Potomac. This was faithfully carried out, and in the summer
of 1790 the government offices were removed to Philadelphia, where they
remained till the summer of 1800, whe