he States were in the
habit, whenever they had occasion for more money than could be raised
immediately, by taxes, to issue paper notes or bills, in the name of the
State, wherein they promised to pay to the bearer the sum named in the
note or bill. In some of the States, no time of payment was fixed, nor
tax laid to enable payment. In these, the bills depreciated. But others
of the States named in the bill the day when it should be paid, laid
taxes to bring in money enough for that purpose, and paid the bills
punctually, on or before the day named. In these States, paper money
was in as high estimation as gold and silver. On the commencement of
the late Revolution, Congress had no money. The external commerce of the
States being suppressed, the farmer could not sell his produce, and, of
course, could not pay a tax. Congress had no resource then, but in paper
money. Not being able to lay a tax for its redemption, they could only
promise that taxes should be laid for that purpose, so as to redeem the
bills by a certain day. They did not foresee the long continuance of the
war, the almost total suppression of their exports, and other events,
which rendered the performance of their engagement impossible. The paper
money continued, for a twelvemonth, equal to gold and silver. But the
quantities which they were obliged to emit, for the purposes of the war,
exceeded what had been the usual quantity of the circulating medium.
It began, therefore, to become cheaper, or, as we expressed it, it
depreciated, as gold and silver would have done, had they been thrown
into circulation in equal quantities. But not having, like them, an
intrinsic value, its depreciation was more rapid, and greater, than
could ever have happened with them. In two years, it had fallen to two
dollars of paper money for one of silver; in three years, to four for
one; in nine months more, it fell to ten for one; and in the six months
following, that is to say, by September, 1779, it had fallen to twenty
for one.

Congress, alarmed at the consequences which were to be apprehended,
should they lose this resource altogether, thought it necessary to make
a vigorous effort to stop its further depreciation. They, therefore,
determined, in the first place, that their emissions should not exceed
two hundred millions of dollars, to which term they were then nearly
arrived: and, though they knew that twenty dollars of what they were
then issuing, would buy no more for