The mirror. (Stillwater, Minn.) 1894-1925, 1918-08-22
I a time when Americans
are thinking in war
terms of billions of dol
lars which must be raised


G!AWgy lars which must be raised
by domestic loans and taxation it
is interesting to examine the meth
ods employed to finance the first
American war-the War of Inde-
pendence.
The total cost of the Revolution,
not including the expenditures of
the individual states, has been es-
timated at about $8O,O00,O00, a
good deal less than one days cost
of the present war. The sum is
truly insignificant as compared
with the 1924, 900, 900, 900 which will
be required to finance Americas
share of the present world war
during the coming year..
The 13 colonies were certainly
as unprepared to strike a decisive
blow for freedom as any country
possibly could be, and the people
handicapped 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.
The colonists could not bring
themselves to the point of giving
what they considered too much
power to limited group of men
representing centralized govern
ment, and while the Congress
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 maintained. As result,
there was great amount of gov
ernmental confusion, and while at
least three systems of raising reve-
nue. were suggested, there was no
definite 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; some foreign loans were ne
'rgotiated; domestic loans we're made
and nominal sum was realized
through taxes levied by the states.
The bills of credit, however, rested
upon what proved to be an un-
sound basis.
Within a week after the battle
of Bunker Hill authority was given
for an issue of $4,000, 900 in credit
bills, and the amount to be re-
deemed between 1879 and 1882 was
carefully apportioned among the
colonists. 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
1779 depreciation became very
marked and from January to May
of that year the value of the bills
varied from 20 to 1 to 383 to one.
The domestic loans were more
successful, although with the ex-
ception of one small loan for the
purchase of gunpowder in June,
1775, these were not authorized
until October. 1776, nearly year
and half after the beginning 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 $4,000, 900 at the
rate of 4 per cent. The lenders
received indented certificates which
may rightfully be considered the
fOrerunners of the Liberty bonds.
1t was found necessary at a later
period to raise the interest rate to
6 per cent, but through four loans
the amount realized was only
So. .787, 900. In September, 1777,
the American ENJOYS secured the
first loan from France, and that
resulted in such stimulation of
the domestic loans that from that
time until the loan Offices were