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CHAPTER XII

FINANCIERING

Whether the financiering of the American Revolution is to be looked upon
in a pathetic or in a comical light must depend upon the mood of the
observer. The spectacle of a young people, with no accumulated capital,
engaged in supporting the charge of a mortal struggle against all the
vast resources of Britain, has in it something of pathos. But the
methods to which this people resorted to raise funds were certainly of
amusing simplicity. It was not until the appointment of Robert Morris,
in 1781, that a treasury department came into existence and some slight
pretense of system was introduced into the financial affairs of the
confederation. During the years prior to that time Congress managed the
business matters. But Congress neither had funds nor the power to obtain
any. It had an unlimited power for contracting debts: absolutely no
power for collecting money. It used the former power freely. When
creditors wanted payment, requisitions were made upon the States for
their respective quotas. But the States were found to be sadly
irresponsive; probably the citizens really had not much ready money;
certainly they had not enough to pay in taxes the cost of the war; no
civilized state has been able to conduct a war, even a small one, in
modern times without using the national credit. But the United States
had absolutely no credit at all. It was well enough to exclaim "Millions
for defense; but not one cent for tribute!" This was rhetoric, not
business; and Congress soon found that the driblets which trickled
tardily to them in response to their demands on the several States would
hardly moisten the bottom of the great exchequer tank, which needed to
be filled to the brim.

Two methods of relief were then adopted, crude, simple, but likely for a
time to be efficient; and provided only that within that time the war
could be finished, all might go well. One of these methods was to issue
irredeemable paper "money;" the other was to borrow real money abroad.
The droll part was that both these transactions were audaciously entered
upon by a body which had absolutely no revenues at all to pledge as
security, which had not a dollar of property, nor authority to compel
any living man to pay it a dollar. A more utterly irresponsible debtor
than Congress never asked for a loan or offered a promissory note. For
the security of a creditor there was only the moral probability that in
case of suc