of the whole amount was to be subject to the order of Congress, and the whole to be guarantied by Congress.

• Measures were adopted by the legislature for carrying the new plan into operation. On the 30th of May an enactment was made for establishing a fund for sinking and redeeming the bills of credit of the United States; and soon afterwards another was passed to repeal the former act declaring the value of the Continental money, and to explain and amend the act making the same a legal tender. The bills were continued a lawful tender in the proportion above stated, and no further abatement was to be allowed in any contracts. Two hundred and twenty-five thousand pounds was authorized to be struck in the new bills. But this new scheme of finance, although it gave a momentary check to the tendencies of the time, brought no permanent relief. The credit of the new bills depreciated after a short time, so as to approach the level of the old, and hence the exchange of the old money was scarcely desired; and beside this, in New Jersey, the amount of Continental money to be exchanged was comparatively small, owing to the large sums held in certificates. The whole sum in new bills authorized by the legislature, was not issued, and the Continental money, both in New Jersey, and elsewhere, gradually perished in the hands of the holders. A crisis in the monetary affairs of the country was at hand. "Our financial concerns," said Washington, "are in an alarming state of derangement; the public credit is almost arrived at its last stage." The military operations of the season, too, were far from fortunate. The southern States, which at this period were the principal theatre of conflict, suffered extremely; South Carolina and Georgia were almost reduced, their principal cities being taken and held by the enemy. In the north, nothing had occurred that could give much relief to the picture, whilst a deep and dark shade had been thrown upon it, by the treason of Arnold.19

19 The attempt of Arnold to surrender West Peint was made in September, 1780.

CHAPTER XXIII.

FINANCIAL CRISIS.-SUCCESSES OF THE AMERICANS.-CLOSE OF THE WAR. THE FEDERAL GOVERNMENT.-NEW STATE CONSTITUTION.

A new legislature convened in New Jersey in October, 1780. Governor Livingston was again re-elected to office. General depression existed at this period. The Continental money was scarcely available for any purpose, and was soon afterwards entirely withdrawn from circulation.' The credit of the bills lately issued was doubtful, and the large amount held by the people of the State in certificates, lay wholly useless in the hands of the holders. At the same time a considerable portion of the northern army was again stationed in the State, and continual demands were made for supplies, and the enemy being in force on the borders, unceasing vigilance as well as increased exertions were required, to prevent incursions. From these several circumstances the strength and resources of the State became greatly reduced; beside the deficiency in pecuniary means, there was an absolute scarcity of many articles of supplies. In no portion of the entire country did the pressure of the war fall more heavily than in New Jersey, and this was one of the darkest periods of the struggle. At this time too, a disposition was shown in some of the other States, or at least in one, to make a special appropriation of means which were claimed to belong to the country at large, and which were looked to as a means of final relief. Of this course New Jersey justly complained, and it was deemed proper, and was resolved that an

1 An act was passed on the 2d of January, 1781, for ascertaining the value of the Continental money, in the payment of debts, and for taking the same out of circulation.

2

appeal upon the subject should be made to Congress. But the State authorities applied themselves with earnestness, to devising measures for the removal of existing difficulties, and for sustaining the efforts of the country. A resolution of the 4th of November

2" Representation and remonstrance of the Legislative Council and General Assembly of the State of New Jersey.

"That the Legislature of this State did, by their representation dated the 16th day of June, 1778, which was read in Congress, and entered on their journals on the 25th of the same month, make sundry objections to, and propose correspondent alterations in the articles of confederation proposed by Congress to the several States in Union. That though a majority of said States in Congress did not agree to the said alterations, nevertheless, urged by the then critical state of public affairs, and particularly by the circular letter of Congress dated the 10th of July, of the same year, the Legislature did, by an act of the 20th of November following, an exemplification of which was read in Congress, and entered on the 25th of the same month, empower the delegates of the State to subscribe the said articles of confederation. That avoiding unnecessary repetitions, they beg leave in the most earnest and explicit manner, to call the attention of Congress to these several records, as from them it is clearly understood in what confidence this State waived, for the time, their just pretensions, described in the sixth article of the representation before mentioned, and postponed every private consideration, to the happiness and perfection of the Union, well convinced that the time could not be far distant, when every partial and unfounded claim would be equitably and satisfactorily relinquished. That they saw with the utmost surprise, an office opened by the Commonwealth of Virginia, for the sale and disposal of lands, which, before and at the commencement of the present war, were confessedly vested in the crown of Great Britain, when on the plainest principles of the law of nations, of reason, truth and justice, they are become, by the revolution, vested in Congress, for the use of the federal republic they represent. That it is the indispensable duty of the Legislature, in justification and defence of the rights of the people, to except and remonstrate in the most pointed terms, against the disposition of any property under the foregoing description, for the emolument of any State. That they acknowlege no tribunal but that of Congress competent to the redress of such a grievance as the setting up by any State, of an exclusive claim to any of the said lands, in whatever part of the Union they may be situated; and they see with pleasure, in the proceedings of Congress of the 16th of September and the 8th of October last, (this representation was made on the 29th of December, 1780,) the faithful and generous efforts made by that honorable body to compromise and adjust differences upon this subject, and have the fullest hopes that they will be effectual. That it is the habitual predilection of

was received from Congress recommending to the States to raise their respective quotas of six millions of dollars, to be partly paid in specific articles, which were enumerated, and the remainder in specie, or in the State bills recently emitted. Accordingly, a law was passed for raising by assessments the sum of one hundred and fifty thousand pounds, in money and other supplies. The levies ordered for providing supplies were to be made according to the condition and means of the several parts of the country; most rigid regulations were also adopted to prevent an illicit traffic in provisions, with the enemy. Every means was resorted to, to improve and establish the public finances. In order to preserve the credit of the bills that had recently been issued by the State, a change was made in the law directing their exchange for old money, and a new emission of bills of credit was ordered amounting to thirty thousand pounds. The petitions to Congress asking that the certificates held by the people of the State should be re

this State that all causes of complaint, jealousy, and contest, not only upon this, but upon every other subject, should subside under the conciliating influence of equity, moderation, and liberal affections, and that it may never become just to entertain a thought of resorting to other means. Confiding, therefore, in the watchful care, the wisdom, the justice and firmness of Congress, they assure themselves that the republic will be secured against detriment, and the rights of every State in the Union strictly maintained."

3 Some of the inhabitants of the State, who were disaffected or cold to the American cause, and others who were tempted by the opportunity of obtaining money which could scarcely be elsewhere procured, continued to sell provisions to the enemy, whilst the American army was in the greatest want. A strong enactment was passed to prevent the practice.

4 The continued depreciation of the Continental money changed the relative value of the currencies, and an alteration of the law became necessary in order to prevent the new bills from being carried down by a fixed connexion with the old. Hence an enactment was made directing that the proportion between the State bills and the Continental money should be the same as between the latter and gold and silver, and the legislature resolved, “that they were determined to redeem at full value of gold or silver, all and every of the bills issued on the faith of the State." But notwithstanding this enactment and resolution, the State bills depreciated in value, and petitions were presented setting forth the injury that was done by keeping them a legal tender, and hence on the 13th of June, 1781, the act making them a legal tender was repealed. In December, 1782, a resolution was adopted to take them out of circulation.

deemed, or that they might be received in exchange for State bills, or used in the purchase of supplies for the army, not having been successful, they were made receivable into the State treasury in payment of taxes, and much relief was thus given to the people. An arrangement was made with the troops in the Continental service, agreeing upon the amount of their dues according to a scale of depreciation which corresponded with the value of the currency at the several periods, and an enactment was made for securing the payment of the amount agreed upon. To ensure the enlistment of the forces required of the State, an act was passed to raise a fund by loan for discharging the bounty to be paid to the troops. Provision was also made designed to secure the more profitable use of confiscated estates."

5

By these several measures, the State was enabled to maintain its position. The efforts made by the Continental government were also successful in bringing relief; upon the failure of the general currency, Congress was obliged to resort to other expedients. As the means of the country were so far exhausted that adequate and seasonable returns, from any mode of demand upon the States, were not to be expected, recourse was had to loans from abroad. For this purpose application was made to the King of France. In November, 1780, a letter was addressed to his Majesty by Congress, in which they represented the embarrassed situation of affairs; and Franklin, the American Minister, was instructed to use his utmost endeavours to procure the necessary aid. In December, Congress were induced by the pressing necessities of the period, to send a special Minister to France, and Col. John Laurens, one of the aids of General Washington, was appointed. Before his arrival, promises of assistance had been given, but the earnestness of the new envoy excited to movements more answerable to the urgency of the occasion. A subsidy of six millions of livres was furnished by his Majesty, and an additional

5 The sales of the confiscated estates had been numerous, and the nominal amount of the proceeds large, yet as the receipts had mostly been in Continental money, which was constantly depreciating, the benefit to the State was much reduced. The present enactment provided for a temporary suspension of sales and for a special appropriation of the issues from the estates.