which was the 1st of June, 1779, was afterward extended to 1780. To facilitate their withdrawal, the managers of the lottery were directed to receive them, and the paymasters of the army to exchange them; associations of citizens also were formed for the same purpose.1

The effect of this measure was probably a surprise to every one, and is a fine illustration of human inability to foresee the quality of fruit which public measures enacted with the best motive and apparently soundest wisdom may sometimes bring forth. Counterfeiting these emissions had become so general, that this seemed a very easy and practical way of circumventing the forgers, simply by withdrawing them. But what happened in consequence of doing this? The immediate effect was to discredit all notes bearing these dates, - the genuine as well as the spurious issues. It is true that merchants and others possessing unsalable property were willing to take the bills by way of exchange, and the newspapers of the day teemed with advertisements containing offers of this character. The way in which this order was received is spiritedly depicted in the following letter:

"How comes it that congress, by their resolve, relative to the two emissions of May, 1777, and April, 1778, have set the country in such a ferment, and given room for a set of speculating people who are enemies to the real good of their country, to take occasion from it to depreciate the value of those two emissions in the manner they have done, and are now daily doing. . . . There are a set of them here very busy in this matter; and by their man

1 Penn. Gazette, Jan. 21, 1779.

agement within this day or two it is rendered twenty-five p. cent worse than the other emissions, which God knows were sunk low enough before. . . . Our butchers, bakers, and farmers begin to refuse it entirely, owing to the stories propagated about it. Must people, who have this money, either lose a fourth of it or starve? and when the time comes for exchanging it, must they spend half of the value of the little they have in taking it to Philadelphia to place it in the office? and after that wait sixty days and attend a second time for payment? Indeed, I think the resolve is not one the wisest, and wish to see these evils speedily remedied. . . . The merchants, or rather hucksters, of Philadelphia, are playing the game there. Surely, congress can call in these or any other emissions in a manner less injurious to the country."1

2

Robert Rutherford also wrote to Washington from Virginia, "It is with much concern I find the resolve of congress, respecting the money emissions of May 20th, 1777, and April 11th, 1778, giving great and general alarm, tending to depreciate the currency, as the holders of these emissions are really deprived of the use of their money for six months, as it in a great measure ceases to pass here in payments; . . . Assuredly Congress have not taken the whole matter into the account, and I am informed that large sums of this money are now in possession of the subjects of Spain upon the Mississippi, they being enjoined by the governor of Orleans to receive it, not to mention many other obvious objections; so that I am sensible it will be consistent with the wonted jus1 Penn. Archives, vol. vi. p. 212.

2 Sparks's Letters to Wash., vol. ii. p. 252.

tice and prudence of that august body, without loss of time, to revise and greatly change the terms of that resolve."

Another evil attending the measure was the loss to exchangers from the depreciation of their money during the period required to effect exchanges. Several months elapsed before these could be made by persons living far away from Philadelphia: as paper money was now rapidly depreciating, of course the loss must have been very considerable.

1

But

The case would not have been quite so bad if the genius and enterprise of the counterfeiters had been wholly expended in making bogus paper money. they were not content with working in that direction: hard money, also, was subjected to ruinous manipulation. In one of the newspapers published during that period the following bit of news is given: "The unnatural enemies of this country, not satisfied with their frequent but fruitless attempts to destroy the credit of our paper currency, have, at length, introduced large sums of Counterfeit Half Joes and Dollars among us, in order to buy up the paper money and thereby stamp a discredit upon it; but, thank God, this villany has been detected in its bud, though the perpetrators of the same are still unknown. The Half Johannes are admirably well imitated, and require the nicest observation to distinguish the genuine from the counterfeit."

Great Britain was very confident, that, by ruining the circulating medium in America, the people would return to their allegiance: hence the desperation with which

1 Penn. Packet, March 13, 1779.

counterfeiting was practised by the British agents. The depth of the determination of the people to achieve independence had not been accurately sounded across the ocean. The cause would not be lost, even if the value of Continental paper money sank out of sight. Yet so long as paper money possessed any value, counterfeiters were busy. Although counterfeiting was branded a crime by all the States, and a reward of two thousand dollars was offered by Congress to persons who should "take and prosecute to conviction" all who forged or knowingly attempted to pass counterfeit money, the practice assumed larger and more alarming proportions until paper money ceased to have any value.' Counterfeiting was not the chief cause of the depreciation of paper issues; but it greatly aggravated the evils springing from their use, and hastened their extinction.

1 Even Morris's own notes were extensively forged. See Lieut.-Col. Smith's Letter to Washington, July 15, 1783, New York in the Am. Rev., p. 142. Almon's Rememb., 1783, part 1, p. 126.

CHAPTER XII.

LIMITATION OF PRICES.

CONGRESS had not issued paper money many months before the prices of all commodities began to rise, exciting alarm, producing uncertainty, and disturbing every calculation. The rise of prices was regarded a terrible evil; and Congress sought to prevent this inevitable effect of the over-issue of paper money by a measure, which in the light of these days looks puerile enough, but which at that earlier period found numerous supporters.' The plan was to fix the prices of all commodities, both domestic and imported, by legal enactment. This was in no sense a novel conception; for, at an early period in New-England colonial administration, the experiment had been tried; the prices of labor, and of almost every thing forming the subject of sale or exchange, having been established by law. It was a New-England idea, therefore; and, when prices had risen to a considerable height, representatives of the New-England States assembled at Providence, and formed a tariff, which was

1 Yet Noah Webster wrote, not long after the Act limiting prices was passed, "These regulating acts were reprobated by every man acquainted with commerce and finance." - Coll. of Essays, p. 192.

2 The regulation of prices began in the Massachusetts Colony as early as 1633. Winthrop's Hist. of New England, vol. i. p. 138, new edition, and Felt's Hist. of Mass. Currency, Index, Prices of Articles and Labor.