other resource than its own; and on the 8th of January, 1778, was driven to issue $1,000,000, and $2,000,000 on the 22d of the same month. The winter of 1777-78 was passed by the army at Valley Forge in a condition of the greatest want and suffering. It was literally without food or clothing. As supplies could not be had for the notes of the government, commissaries were authorized to seize whatever they could lay their hands upon, paying therefor in government certificates. But even such harsh measures availed little in a country a prey alike to the enemy's troops and its own. As notes were still the only resource, these were issued, in the months of February, March, and April, 1778, to the extent of $10,500,000. At the end of April, their value had fallen as low as six to one of specie; the amount then outstanding equalling $51,000,000. In May came the news of the French alliance, in consequence of which the price of the notes rose to one-fourth their nominal value. Encouraged by the improved aspect of affairs, Congress, on the 8th of that month, issued an address to the nation, which was read in all the pulpits, as the best mode, at the time, of bringing it to the attention of the people. From this the following extracts are given : —

"After the unremitting efforts of our enemies, we are stronger than before. Nor can the wicked emissaries, who so assiduously labor to promote their cause, point out any one reason to suppose that we shall not receive daily accessions of strength. They tell you, it is true, that your money is of no value, and your debts so enormous that they can never be paid. . . .

Surely there is no man so absurd as to suppose that the least shadow of liberty can be preserved in a dependent connection with Britain...

"And this mad, this impious system, they would lead you to adopt, because of the derangement of your finances.

"It becomes you deeply to reflect on this subject. Is there a country upon earth which hath such resources for the payment of her debts as America? such an extensive territory? so fertile, so blessed in its climate and productions? Surely there is none; neither is there any to which the wise Europeans will sooner confide their property. What, then, are the reasons that your money hath depreciated? Because no taxes have been imposed to carry on the war; because your commerce hath been interrupted by your enemy's fleet; because their armies have ravaged and desolated a part of your country; because their agents have villainously counterfeited your bills; because extortioners among you, inflamed with the lust of gain, have added to the price of every article of life; and because weak men have been artfully led to believe that

it is of no value. How is this dangerous disease to be remedied? Let those among you who have leisure and opportunity collect the money which individuals in their neighborhood are desirous of placing in the public funds. Let the several legislatures sink their respective issues; that so, there being but one kind of bills, there may be less danger of counterfeit. Refrain a little while from purchasing those things which are not absolutely necessary; so that those who have engrossed commodities may suffer (as they deservedly will) the loss of their ill-gotten hoards, by reason of the commerce with foreign nations, which fleets will protect."

The new alliance paved the way for considerable loans; a portion of which was used for the payment of interest on the certificates of indebtedness, which had now been issued in considerable amounts, in the purchase of supplies for the army. The tariff of prices was suspended; as it was believed that, through the aid of the French fleet, the foreign commerce of the country would revive, and that means for the future prosecution of the war could be provided largely by loans. The people were buoyed up for a time by a belief that the war was soon to be brought to a close. Congress, actuated by a similar feeling, made little or no attempt for the restoration of the finances. It still continued to meet the demands that were constantly made upon it by issues of notes; which, from April to January, 1779, equalled $50,500,000, making the whole amount outstanding at the close of that year $101,500,000. At that time, their value had fallen to about eight to one of coin. The military operations for the year were, on the whole, unfavorable. The French fleet came too late in the season to carry out those which had been planned in connection with it, and the war seemed as far from an end as ever. Despondency again succeeded to the hope which had been raised so high.1 Congress, in view of the situation, was at last forced to act, which it did by the appointment of a Committee, consisting of Robert Morris, Elbridge Gerry, Richard H. Lee, Francis

1 The following letter from William Hosmer to Governor Trumbull well illustrates the state of feeling at the time:

"I wish I could with truth assure your excellency that, in my view, our affairs are in a happy train; and that Congress has adopted wise and effectual measures to restore our wounded public credit, and to establish the United States, their liberty, union, and happiness, upon a solid and permanent foundation. I dare not do it while my heart is overwhelmed with the most melancholy presages. The idleness and captiousness of some gentlemen, maugre the wishes and endeavors of an honest and industrious majority, in my apprehension threaten the worst consequences." Letters to Washington, vol. ii. p. 196.

Witherspoon, and Gouverneur Morris, to consider the financial situation. The Committee made its report to Congress on the 15th of September, 1778. It was not, however, acted upon till the 8th of October following.

The first question that came up for consideration was the recommendation of the Committee to take off the limitation of the price of gold; that is, to repeal the law which had attempted to make the notes equal in value to a corresponding amount of the former. They had now become so depreciated that the absurdity of the law was too manifest to allow it to remain on the statute-book. The recommendation was adopted; and by it the first direct blow to the credit of the notes was dealt by the very party issuing them. It was an acknowledgment of a difference in value between them and coin, although payable in coin on their face. The whole question of their value was now opened up for discussion. If they were not worth their face, what were they worth? The people at once saw the abyss over which they stood. That which they had acquired with so much labor and toil might become utterly worthless. It was charged that the Act meant repudiation. This was indignantly denied. Congress, as usual, protested its good faith, and that every dollar of the notes would be eventually discharged. The time in which such protests and assurances could have much effect had long since passed. The notes, however, continued to be issued in greater sums, and to decline more rapidly than ever in value. That they did not go at once out of circulation was due to the fact, that every issue served to pay old debts at a reduced cost to the debtor. There were always plenty to take them, provided they could be had at a sufficient discount. Swindling was at once reduced to a system, Congress all the time abetting it, by issues which were always put upon the market, each at a less rate than the previous one. All could run into debt, with a certainty of making money by the operation.1

1 The following quotation from Sparks' "Life of Washington" will show the use made of the notes, as well as what the latter thought of it:

"When the army was at Morristown, a man of respectable standing lived in the neighborhood, who was assiduous in his civilities to Washington, which were kindly received and reciprocated. Unluckily, this man paid his debts in the depreciated currency. Some time afterward, he called at head-quarters, and was introduced as usual to the General's apartment, where he was then conversing with some of his officers. He bestowed very little attention upon the visitor.

Although at this day a retrospect would seem to discover nothing but imbecility and folly in the financial operations of the Revolutionary Government, and would show it to be chargeable with no small part of the want of success of the military operations of the country, and the impoverishment and distress which followed, it was not, considering its organization, properly liable to any such censure. It was simply a government upon which the gravest duties were imposed, but which was wholly without the power for their execution. Such a government, like an individual, assuming every thing, and capable of nothing,- speedily falls into utter contempt. It could represent and implore, but not command. It derived its power from thirteen distinct peoples, all foreign to and jealous of each other; and each fearing that it should do more than its share in the struggle in which all were engaged. Their only tie was hatred of the common enemy. Apart from this, there was hardly more resemblance, sympathy, or cohesion between Massachusetts and Virginia-the two leading States in the contest than between England and France. They were as antagonistic as was possible for two States having a common parentage. It was a common parentage which rendered the antagonism between them all the more irreconcilable. Had they not belonged to the same race, their differences would have been held to be constitutional, and therefore to be respected. Where the difference is one between members of the same race, the assumption is that one must be wrong, and that that one must yield. To yield may be to give up whatever a people holds most dear. Opinion, where its defeat involves such consequence, is of all things that most worth fighting for. The history of this country is the history of two great tendencies which are as old as humanity, and which, since its settlement, have divided its people into two hostile camps, that which seeks to subject all, high and low, to the restraints of a common rule; and that which refuses such subjection. It is the difference between government and no

The same thing occurred a second time, when he was more reserved than before. This was so different from his customary manner that Lafayette, who was present on both occasions, could not help remarking it; and he said, after the man was gone, 'General, this man seems to be much devoted to you, and yet you have scarcely noticed him.' Washington replied, smiling, I know I have not been cordial: I tried hard to be civil, and attempted to speak to him two or three times; but that Continental money stopped my mouth.'"-Life and Writings of Washington, vol. i. p. 333.

government, order and anarchy, progress and decay. The North, engaging from necessity in commerce and manufactures, sought the world for a market, and immunity wherever their people or products could go. The South, devoted to agriculture, with their markets mostly in Europe, and with institutions founded on force, would take counsel only of their necessities and fears. To commit themselves to the guidance of ideas, or to the people of the North, would be to court the overthrow of the very conditions upon which all their prosperity was supposed to rest. The history of this country is but a history of the struggle for the mastery of opposing tendencies and ideas, growing out of conditions differing radically in kind. Hence the importance of studying well the period from the formation of the Provisional Government in 1775 to the adoption of the Constitution in 1788. It is the only mode by which we get at the motives that led to the formation and adoption of the Constitution, and the different constructions given to its provisions. The great question then, as it has ever since been, was whether the second government only repeated the loose confederation which preceded it, a government without purposes or powers; or whether it was an autonomy within itself, paramount to all, and responsible to nothing but its own will, controlled and guided, to a certain extent, by that provision by which the competency of its acts was to be decided by a tribunal provided by the Constitution itself. That instrument was but the result of the reaction against the anarchy and barbarism toward which the country was then rapidly tending. He who did the most to secure its adoption understood best the incompetency and worthlessness of the government it superseded.1

1 So loose were the ties by which the confederacy was bound together, so limited was the control exercised by Congress over the States, and so little inclined were the parts to unite in a consolidated whole, that, from imbecility on the one hand and public apathy on the other, Washington became more and more fearful of the consequences. "The great business of war," said he," can never be well conducted, if it be conducted at all, while the powers of Congress are only recommendatory. While one State yields obedience, and another refuses it, while a third mutilates and adopts the measure in part only, and all vary in time and manner, it is scarcely possible that our affairs should prosper, or that any thing but disappointment can follow the best concerted plans. The willing States are almost ruined by their exertions; distrust and jealousy ensue. Hence proceed neglect and ill-timed compliances; one State waiting to see what another will do. This thwarts all our measures, after a heavy though ineffectual