a time, but depreciated rapidly as their number increased. It has been
estimated that the country had less than $10,000,000 of coin before
the war, and when, in 1780, over $200,000,000 of notes were in
circulation they were completely discredited: hence the phrase "not
worth a continental." Specie then quickly came back into use. A few
years later the leaders of the French Revolution, failing to learn the
lesson of the American experience, issued, on the security of land,
notes called assignats in such enormous quantities that they became
worth no more than the paper on which they were printed. The paper
money issued under the English bank restriction act of 1797-1820 is
especially notable because it gave rise to the controversy which did
much to develop the modern theory of the subject. Parliament forbade
the Bank of England to redeem its notes in coin because the government
wished to borrow the coin the bank held. The result was the issue of
a large amount of bank money not subject to the ordinary rule of
redemption on demand. It was virtually governmental paper money. The
notes depreciated and drove gold out of circulation, and it was not
until 1821 that specie payments were definitely resumed.

The United States, under the Constitution, did not try legal-tender
paper money till 1862 when paper notes (called greenbacks, because of
the color of ink with which the reverse side was printed) were first
issued, later increased to a total of about $450,000,000. Other
interest-bearing notes were issued with the legal-tender quality and
circulated as money to some extent. Greenbacks depreciated in terms
of gold, and gold rose in price in terms of greenbacks until, in June,
1864, it sold at 280 a hundred. Fourteen years elapsed after the war
before these notes rose to par, in terms of gold (in December, 1878),
and they became legally redeemable in gold January 1, 1879. This was
called "the resumption of specie payments."

Almost every nation has at some time issued political money. During
the Franco-Prussian War in 1870, France, through the medium of its
great state bank, made forced issues of notes of a political nature,
which only slightly depreciated. Many countries--Russia, Austria,
Portugal, Italy, and most of the South and Central American
republics--have had or still have depreciated paper currencies.

At once, at the outbreak of the great war in 1914, the governments of
the warring nations began to exercise a stric