Continental Currency

In book one of The Enlightened Series, Savvy describes some coins found in the trunk given to her by Jonathan, which - although she doesn’t know its value - includes two bits and four bits. Savvy also mentions a Continental dollar that her father treasures.

Continental currency had little value because it depreciated quickly during the War. In early 1778, a Continental dollar was worth a quarter of its value in 1775. Part of the problem was that Congress printed too much paper money without sufficient gold or silver coinage to support its value. Essentially, Congress printed promissory notes with no means to pay what was owed. Congress resisted taxing its constituents to raise revenue to support its currency and army, preferring to seek loans from foreign nations. One reason being that the Articles of Confederation, which would unite the colonies into one country, was not fully ratified until 1781. Thus, Congress was similar to a conference - attendees debated and learned from each other but had little power to enact legislation within or superseding that of their own individual states.

Declining to tax constituents also meant the paper currency remained in circulation without being retired. Crudely put, there was a greater supply of paper currency than demand. Britain took advantage of the surplus of paper currency by mass producing counterfeits and circulating it from its point of production in Manhattan, managing to reach every state. When this economic attack was discovered, not only was there an excessive amount of valueless paper in circulation but confidence in Continental currency plummeted. Many citizens refused to accept it as payment. As one stingy American put it, Continental currency was “no better than oak leaves and fit for nothing by Bum fodder.” Another better-known turn of phrase was that something “wasn’t worth a Continental.”

British blockades also prevented imports from reaching America, further driving up the cost of goods and leading to greater depreciation.

By 1780, Continental currency was worth one-fortieth of its face value. Congress finally began to retire the currency with a failed attempt to print new paper currency. By spring the following year, Continental currency had lost its entire value and was naturally taken out of circulation through lack of use.