The Whiskey Rebellion by William
Hodgeland, 2006, Excerpts
The debt to American investors, which lay at the heart of
the drama, took the form of interest-bearing notes issued chaotically by the
Congress and various state legislatures to raise cash for the war. Those
creditors kept reminding Congress that their investment in the war had been
patriotic and should be rewarded as such. The Congress, representing sovereign
states, had no power to tax anyone. Every state was therefore supposed to levy
taxes to retire a proportionate amount of Continental paper.
The colonies had been suffering a thirty-year economic
slide, which was now a full-on depression. People in the countryside were
desperate. States couldn’t collect taxes and were already failing to make
agreed-upon requisitions of funds to Congress. So Congress printed more and
more of its poorly supported paper. As early as 1776, everybody knew
Continental paper would depreciate deeply, and by 1780 the Congress had to stop
printing it. The bills soon traded at a rate of $125 in paper to $1 in coin.
After passing out of circulation, they sold to long-shot gamblers at five
hundred to one. The countryside filled up with broke, indebted veterans of a
long war.
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