1. Gabe, Gautam and Xander

3.  During the Revolutionary War, the colonial
governments, both the federal and state,
amassed huge amounts of debt.
 Over 100 million dollars was owed to US
citizens, and other countries (France) that sold
supplies or bought war bonds during the war.

4.  The United States government’s original plan
to pay off the debt was to print 200 million
new dollars worth of paper money (colonials)
 Pay off debts with them
 Then slowly collect them back through taxes
levied by the states and subsequently remove
them from circulation.

5.  However, instead of using this currency to pay
of their debts, the states collectively printed 200
millions dollars worth of their own currency
 This was used that to pay off the state’s debts
instead.
 This massive influx of relatively worthless
paper currency lead to massive inflation.

6.  The Continental dollar’s value promptly
dropped to a fifth of its face value.
 People who’s bonds were paid back in this
currency now had few or no goods, and large
amounts of worthless money.
 People began to use it to stoke flames and
make clothes rather than use it as currency.
 An expression circulating around the colonies was,
“not worth a continental,” meaning worthless.
 It made the government lose almost all control
over the economy, because no-one would use
its currency because it was worthless.

7. Annual Emission As
Annual Emission As
Nominal Dollars Share of Total Specie Value of
Year of Emission Share of Total Specie
Emitted (000) Nominal Stock Annual Emission (000)
Value Emitted
Emitted
1775 $6,000 3% $6,000 15%
1776 19,000 8 15,330 37
1777 13,000 5 4,040 10
1778 63,000 26 10,380 25
1779 140,500 58 5,270 13
Total $241,500 100% $41,020 100%
Source: Bullock (1895), 135.

9.  Born: January 20, 1734 in Lancashire, England
 Family moved to Chesapeake Bay 1744
 Attended school in Philadelphia
 Apprenticed in a Counting Room
 Took control of the business
 This put him in a position of relative power in
society

10.  Stamp Act of 1765
 Devastated import business
 Morris sided with colonists
 Joined movement against British

11.  Elected for Continental Congress in 1775
 Headed committees for raising capital and
provisions to support the revolution
 Commissioned to negotiate and solicit money
for war operations
 Lottery
 Loaned $10,000 of his own wealth
 Funded Washington’s troops in Battle of Trenton
 Operated privateers for supply

12.  Bank of North America
 Morris developed a national bank
 Helped finance war
 Established the United States credit
 Appointed to be the first Secretary of the Treasury
 Directed operations of newly created bank

13.  Constitutional Convention 1787
 Supported a new constitution to be drafted.
 Positions held
 Pennsylvania Legislature
 Senator for Pennsylvania

14.  Lost all wealth to bad land speculation
 Put in debtors prison
 Even though he was considered to be a national hero.
 Eventually released from debtors prison (1798-1801)
 Died in 1806, age 73

16.  $54 million of national
debt
 $25 million state debt
 Some states have
harder time paying
 No good way to pay
off debts
 More credit
unavailable http://www.oocities.com/tthor.geo/graphics/3Contin
ental.jpg

17.  Constitution in 1787
 New Federal powers
 Hamilton wants to
consolidate and
refinance debt
 Fed gov’t. assumes
state debts
 Pays off with more
borrowed money
 Pay at face value
 Benefits speculators
http://pdxretro.com/wp-
content/uploads/2011/01/alexander-hamilton.jpg

18.  Big southern states
didn’t like plan
 Didn’t want to pay
other state debt
 Concern over
rewarding speculators
 Compromise reached
after 6 months
 Sets Capital first in
Philadelphia, then
where it is today
http://www.countymapsofgeorgia.com/pics_counties/washingtondc
_map.gif

19.  http://mises.org/daily/2340
 http://www.netplaces.com/american-revolution/the-politics-of-
war/financing-the-war.htm
 http://eh.net/encyclopedia/article/baack.war.revolutionary.us
 http://en.wikipedia.org/wiki/American_Revolution#National_debt
 http://www.ushistory.org/declaration/signers/morris_r.htm
 http://www.libertystory.net/LSACTIONROBERTMORRIS.htm
 "Alexander Hamilton's Financial Program." Digital History. University of
Houston, 2006. Web. 25 Oct. 2011.
<http://www.digitalhistory.uh.edu/
database/article_display.cfm?HHID=6>.
 Hamilton, Alexander. "The First Report on Public Credit by Alexander
Hamilton
(1789)." WW Norton & Company, Inc. WW Norton and Company, Inc,
2011. Web. 25 Oct. 2011.
<http://wwnorton.com/college/history/archive/resources/
documents/ch08_02.htm>.
 Tindall, George Brown. America: A Narrative History. Vol. 1. New York:
WW Norton & Company, 1984. Print.