The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1918-08-29
Colonists Laid Foundation
For Financing Of u. S. War

WASHINGTON, Aug. 29.-At time
when Americans are thinking IN war
terms OF billions Of dollars which must
be raised by domestic loans and taxa
ton 1t Is interesting to examine the
methods employed to finance the first
American war-the War of 1nCepend-
ence.
The total cost Of the Revolution, not
including the expenditures OF the in
dividual states, has been estimated at
about $S0,000000, good deal less
than one days cost of the present war.
The sum Is truly Insignificant as COM
pared with the S24,00O.000,000 which
will be required to finance Americas
share Of the present world war during
the coming year.
The thirteen colonies were certainly
as unprepared to strike decisive
blow for freedom as any country pos
sibly could be, and the people, handi-
capped themselves at the very outset,
by denying to congress the power of
levying and collecting taxes which
would have facilitated the raising OF
war revenue.
Relied on Bills Of Credit.
The colonists could not bring them
selves to the point of giving what they
considered too much power to limit
ed group of men representing central
lied government, and while the con-
gress could enact legislation for an
army and navy, it could do no more
than make suggestions to the various
states regarding the manner In which
these fighting forces were to be main
tanned. AS result there was great
amount OF governmental confusion,
and while at least three systems OF
raising revenue were suggested, there
was no definite plan as to the way In
which these methods were to be ad-
justed to one another.
Greatest reliance was placed at
first upon the issue of bills of credit;
some foreign loans were negotiated;
domestic loans were made and NOM
inal sum was realized through taxes
levied by the states. The bills of
credit, however, rested upon what
proved to be an unsound basis.
Within a week after the battle of
Bunker Hill, authority was given for
an issue of s2000,000 in credit bills,
and the amount to be redeemed be-
tween 1879 and 1882 was carefully ap-
portioned among the colonies. Other
| issues followed, the total issue being
about $241 ,552,780, but at no time was
that amount in circulation and seldom
was it acceptable at face value. In
1879 depreciation became very mark.
ed 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,
Domestic Loans Made.
The domestic loans were more sue
cessful, although, with the exception
Of one small loan for the purchase OF
gun powder in June 1875; these were
not authorized until October 1875
nearly a year and half after the be
ginning OF the Revolution. The fail
ure of the bills of credit and the pauc
ity of the revenue being secured
through taxation, led congress to au
thorize the borrowing of $5,oO0,000 al
the rate of four percent. The lend
ers received indented certificate:
which may rightfully be considered
the forerunners of the Liberty bonds
1t was found necessary at latel
period to raise the interest rate to si1
percent, but through four loans the
amount realized was only $751; 900
In September 1777, the American en-
voys secured the first loan from
France, and that resulted in such ;
stimulation of the domestic loans, tina
from that time until the loan office
were closed, $7,6S4,000 specie wa
subscribed.
The foreign loans obtained by tn
struggling colonies during their wa
for independence are particularly il
teresting at the present time whe
the United States is making such trt
mendous loans to the various allie
countries. Through Benjamin Franz
lin, Gouveneur Morris and Others
funds were obtained either in loan
or subsidies from the governments {
, France and Spain and from privat
, bankers in Holland. France granite
subsidies of 100000 livres in 1T
, and 100000 livres an 1871. In al
, these sums, which may be regarde
, as gifts, amounted to $1,966,500.
, The United States borrowed frol
, France between 1877 and 1888 the t
: tai sum of $6,352, 800, while Hollan
. loaned the struggling nation $1.304,0(
, and Spain furnished STA. lila tot,