The West Virginian. [volume] (Fairmont, W. Va.) 1914-1974, 1918-08-14


WASHINGTON, Aug. l4-Ata time
when Americans are thinking in war
terms Of billions Of dollars which must
he raised by domestic loans and tax
alton II IS interesting TO examine the
methods employed 10 finance the first
American waffle War OF IndepCnd.
enCe.
The total cost OF the Revolution, not
including the expenditures OF the indi-
yidual states. has been estimated az
about $50 100000 good deal less than
one days cost OF the present war.
The sum is truly insignificant as com.
pared with the $4,000, 100000 which
will be required 10 finance Americas
share Of the present world war during
the coming year
The thirteen colonies were csrtsinly
as unprepared 10 strike a decisive
blow for freedom as any country pos
sibly could be- and the people, handi.
capped themselves at the very outset,
hy denying 10 Congress the power OF
levylng and collecting taxes which
would have facilitated the raising OF
war revenue.
The colonats could not bring them.
selves TO the point Of giving what they
considered too much power to q limit.
ed group Of mer representing central.
lied government, and while the Con-
gress could enact legislation for army
and navy. II could do no more than
make suggestions 10 the various states,
regarding the manner IN which these
fighting forces we're 10 be maintained
As a result, there was a great amount
OF government confusion, and while al
least three systems OF raising revenue
we're suggested. there was no definate
plan as to the way in which these
methods were to be adjusted to one
another
Greatest reliance was placed at
first upon the issue Of bills of credit I;
some foreign loans were negotiated ;
domestic loans we're made and a nom.
inal SUN was realized through taxes
levied by the states. The bills Of
credit, however, rested upon what
proved to be en- unsOund basis.
Within a week after the Battle OF
Bunker Hill. authority was given for
an issue OF 100000 in credit bills,
and the amount to be redeemed be.
tween 1879 and 1882 was carefully
1pportioned among the colonies. Other
issues followed. the total issue being
about S24l,5 $50, but at no time was
that amount In circulation and seldom
was 1t acceptable at face value. In
1879 depreciation became very marked
and from January TO May OF that year,
the value OF the bills varied from
twenty TO one to thirty.eight and a
half TO one.
The domestic loans we're more
successful, although, with the except.
ion Of one small loan for the purchase
Of gun powder in June l775; these
were not authorized until October 1916,
nearly year and a half after the be.
ginning Of the Revolution. The failure
Of the bills Of credit and the paucity
Of the revenue being secured through
taxation, led Congress to authorize the
borrowing Of $5,O0O,00O at the rate OF
four per cent. The lenders received
indented certificates which may right.
fully be considered the forerunners OF
Liberty Bonds. II was found neces
sary st q later period to raise thu
interest rate to six percent. but
through four loans the amount realized
was only $3,7s7.O00. In September
l777. the American ENJOYS secured
the tl:st loan from France, and that
resulted IN such a stimulation OF the
domestic loans. that from that time
until the loan offices were closed, 81,
OS4 900 in specie was subscribed.
The foreign loans obtained by the
struggling colonies during their war
for independence are particularly inter.
estinE az the present time when the
United States IL making such tremend.
Gus loans TO the various allied coun.
tries. Through Benjamin Franklin
Govcneur Morris and others funds
were obtained either in loans or sub.
sides from the government OF France
and Spain and from private bankers
in Holland. France granted subsidies
Of 100000 llvreS In 1871 and 5000,
900 liVres in 1881. In all, these sums
which may be regarded as gifts,
amounted to 81 1876, 500.
At the beginning Of 17s4-ten years
after the declaration Of independence
The indebtedness Of the national gov.
eminent was $39.323,s86. This was
divided as follows: Foreign, S7.s3l, $50,
Domestic loan certificates. 81 ,5S6. 900
UnliQuldated certificates Of indebted.
ness. 5l6,70S, 900; Arrears Of interest
on domestic debt. $3l0s 900 These
figures are trivial as compared 10 those
representing the war debt Of today. but
this Indebtedness weighed far more
heavily upon the people OF that time
than the tremendous expenditure OF
the present does upon the American
public today.
II was no small matter for the colon.
ialS and their decendents TO so shape
the machinery OF the government that
results could be obtained smoothly ana
efficiently. There we're many ups and
downs, successes and failures, but the
foundation laid IN those trying times
Is the foundation upon which the
American financial system rests at
the present time. and It 10 because OF
that foundation that the United States
has been enabled % take such an i'm.
portant part IN the world struggle for
democracy.