clothed, and fed their troops, fitted out ships, and supported the war during five years against one of the most powerful nations of Europe.

The paper thus issued, passed current in all the internal commerce of the United States at par with silver during the first year; supplying the place of the gold and silver formerly current, but which was sent out of the country to purchase arms, &c. or to defray expenses of the army in Canada: but the great number of troops necessary to be kept on foot to defend a coast of near 500 leagues in length, from an enemy who being masters at sea could land troops where they pleased, occasioned such a demand for money, and such frequent additional emissions of new bills, that the quantity became much greater than was wanted for the purposes of commerce; and the commerce being diminished by the war, the surplus quantity of cash was by that means also proportionally augmented.

It has been long and often observed, that when the current money of a country is augmented beyond the occasions for money, as a medium of commerce, its value as money diminishes. Its interest is reduced, and the principal sinks, if some means are not found to take off the surplus quantity. Silver may be carried out of the country that produces it, into other countries, and thereby prevent too great a fall of its value in that country. But when by this means it grows more plentiful in

all other countries, nothing prevents its sinking in value. Thus within 300 years, since the discovery of America, and the vast quantities of gold and silver imported from thence, and spread over Europe and the rest of the world, those metals have sunk in value four-fifths, that is, five ounces of silver will not purchase more labor now than an ounce would have done before that discovery.

Had Spain been able to confine all that treasure within its own territories, silver would probably have been there of no more value by this time than iron, or lead. The exportation has kept its value on a level with its value in other parts of the world. Paper money not being easily received out of the country that makes it, if the quantity becomes excessive, the depreciation is quicker and greater.

Thus the excessive quantities which necessity obliged the Americans to issue for continuing the war, occasioned a depreciation of value, which commencing towards the end of 1776, has gone on augmenting, till at the beginning of the present year, 50, 60, and as far as 70 dollars in paper were reckoned not more than equal to one dollar in silver, and the prices of all things rose in proportion.

Before the depreciation commenced, the congress fearing it, stopt for a time the emission of new bills, and resolved to supply their occasions by borrowing. Those who lent them the paper money at that time and until March 1778, fixed their property and prevented its depreciation; the

interest being regularly paid by bills of exchange on France, which supports the value of the principal sums lent.

These loans not being sufficient, the congress were forced to print more bills, and depreciation proceeded. The congress would borrow no more on the former conditions of paying the interest in French money at Paris; but great sums were offered and lent them on the terms of being paid the interest, and repaid the principal in the same bills in America.

These loans in some degree lessened, but did not quite take away the necessity of new emissions, so that it at length arrived at the excessive difference between the value of paper and silver, that is above-mentioned.

To put an end to this evil, which destroyed all certainty in commerce, the congress first resolved to diminish the quantity gradually by taxes, which, though nominally vastly great, were really less heavy than they appeared to be, and were readily paid. By these taxes 15 millions of S. dollars, of the 200 millions extant, are to be brought in monthly and burnt. This operation will destroy the whole quantity, to wit, 200,000,000, in about 14 months. Thirty millions have already been so destroyed.

To prevent in the meantime the farther progress of the depreciation, and give some kind of determinate value to the paper, it was ordained that for

every sum of forty dollars payable by any person as tax, he might discharge himself by paying one dollar in silver. Whether this expedient will produce the effect intended or not, experience and time must discover.

The general effect of the depreciation among the inhabitants of the states has been this, that it has operated as a gradual tar upon them, their business has been done and paid for by the paper money, and every man has paid his share of the tax according to the time he retained any of the money in his hands, and to the depreciation within that time. Thus it has proved a tax on money, a kind of property very difficult to be taxed in any other mode; and it has fallen more equally than many other taxes, as those people paid most who being richest had most money passing through their hands.

With regard to the paper money or bills borrowed by the congress, it appears by the above account to be under two different descriptions.

First, the quantity of bills borrowed before the depreciation, the interest of which in silver was to be and is paid. The principal of this sum is considered as equal in value to so many dollars of silver as were borrowed in paper, and will be paid in silver accordingly.

Secondly, the quantities of bills borrowed in different stages of the depreciation down to the present time; these sums are, by a resolution of congress, to be repaid in silver according to the value they

were of in silver at the time they were lent; and the interest is to be paid at the same rate. Thus those lenders have their property secured from the loss by depreciation subsequent to the time of their loan.

All the inhabitants are satisfied and pleased with this arrangement, their public debt being by this means reduced to a small sum. And the new paper money which bears interest, and for the payment of which solid funds are provided, is actually in credit equal to real silver.

If any persons living in distant countries have, through their absence from their property in America, suffered loss by not having it timely fixed in the several loans above-mentioned, it is not doubted but that upon an application to congress stating the case, they will meet with redress.

The real money used in the United States, is French, Spanish, Portuguese, and English coins, gold and silver. The most common is Spanish milled dollars, worth five livres five sols tournois.

The nominal money is generally paper, reckoned in pounds, shillings, and pence, of different value in the different states when compared with real money, and that value often changing, so that nothing certain can be said of it. Everywhere

the accounts are kept in the nominal pounds, shillings, and pence, the pound containing twenty shillings, and the shilling twelve pence, whatever may be the real value.