The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1918-08-14
FINANCES IN ITS
How Money Was Provided for
the Revolution.
Bills of Credit Deprecated to
Very Low Mark.
FRANCE LOANED $6,OOO,O 900
Indented Certificates FOrerun-
ners of Liberty Bonds.
Foundation Laid Then for Ma
tiOnal Finance Today.
FRANCE LOANED $G,OOO,OO(

| Washington, Ang. 14.-At a time
when Americans are thinking in war
terms of billions of dollars which
| must be raised by domestic loans and
taxation it is interesting to examine
the methods employed to finance the
first American war-the War of In
dependence.
The total cost of the Revolution, not
including the expenditures of the indi-
viduaI states, has been estimated at
about $50, 100000. a good deal less than
one days cost of the present war The
sum is truly insignificant as compared
with the $4,000, 100000 which will be
required to finance Americas share of
the present world war during the com
ing year.
Tied Congress- Hands.
The thirteen colonies were certainly
as unprepared to strike a 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
1evying and collecting taxes which
would have facilitated the raising of
war revenue.
The coIonists 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-
eress 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 a result there was a great
amount of governmental confusion.
and willis at least three systems of
n f=fr1
was no definite plan as to the way in
which these methods were to be ad-
Justed to one another
Bills of Credit First Favored.
Greatest reliance was placed at first
upon the issue of bills of credit; some
foreign loans were negotiated; domes-
tic loans were made and a nominal
sum was realized thru taxes levied by
the states. The bills of credit. how
ever, rested upon what proved to be
an unsound basis.
Within week after the Battle of
Bunker Hill, authority was given for
an issue of 100000 in credit bills.
ana tne amount to be redeemed be-
tween 1719 and 1882 was carefully an
portioned among the co1onists other
issues followed, the total issue being
about $241, 552,7S0, but at no time was
that amount in circulation and seldom
was It acceptable at face value. In
6CldIIO1 became VeTV 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.
Forerunners of Liberty Bonds.
The domestic loans were more sue
cess1ul' altho, with the exception of
one small loan for the purchase of
gun powder in June, 1775, these were
not authorized until October 1875
nedrlY
beginning of the revolution. The fail
ure or the bills of credit and the
paucity of the revenue being secured
thru taxation, led congress to author
re the borrowing of 100000 at the
rate or per cent. The lenders re-
celved indented certificates which
may r1ghtfully be considered the fore
runners of the liberty bonds It was
Iouno necessary at a later period to
raise the interest to per cent. but
was only $3,7S7OO0. In September,
If11. the American ENJOYS secured
the 1irst loan from France and that
resulted IN such a stimulation of the
domestic loans, that from that time
en- e1tio me loan offices were closed,
Sf:6s4,o0O in specie was subscribed.
The foreign loans obtained bv the
struggling colonies during their. war
tor independence are particularly in
Ieresung at the present time when the
onlteo states is making such ire
Iilehuous loans 70 the various allied
countries. Thru Benjamin Franklin,
Gouveneur Morris and Others funds
were obtained either in loans OF sub
oioieS from the governments of France
ana spain and from private bankers
IN Holland France granted subsidies
OF 100000 ]ivres in 1T77 and 600
600 livres in 1881. In all. these sums
which may be regarded as gifts.
amounted to $1,996,5OO.
France Loaned Us 6 Million.
the United States borrowed from
france between 1777 and 1888 the
.otal sum or S6,352.5 500, while Holland
loaned Loaf the struggling nation S1,3O4,-
wy ana SPAN furnished $174,117a
forgotten that France spent at least
So'uuO, 700 on the army which she sent
to the aid of the colonies.
AT the beginning of 17S4-ten years
dtter the declaration of Independence
ene lnoeot fdness of the national gov
divided as follows: Foreign. s7.e3f-e
800; Oniiquidated certificates of In
ueoteoness, SIC ,706. 900; Arrears OF in
serest on domestic debt, $500 600
tnese Ilgures are trivial as compared
70 enose representing the war debt of
sooay, out this Indebtedness weighed
Iar more heavily upon the people of
lhat time than the tremendous ex-
penditure of the present does upon the
american public today.
Hevolutionists Laid Foundation.
IL was no small matter for the CO.
I4nlaIs and their descendants to so
S nt . me machinery of the govern
ment that results could be Obtained
smoothly and efficiently. There were
many ups and downs, successes and
Ialures, but the foundation laid in
those trying times Is the foundation
upon winch the American financial
II Is because of the soIidity of that
foundation that the United States has
oeen enabled to take such an Import
AM part in the world struggle for dem
ocracy.