“That’s not worth a Continental Dollar!”

Have you ever wondered what that old saw means? The saying means, simply, that an item has no value. It’s worth nothing. Zip. Zero. Bupkis. And it traces its origins to what was perhaps the most important battle of the Revolutionary War--the battle for funding.  Stay with me a moment, and let’s see if we can make a connection or two.

    In 1775, a year before they would get around to declaring independence, the 2^nd Continental Congress found itself in serious need of money. As George Washington would later write, Americans were,

“Not then organized as a nation, or know as a people upon the earth. We had no preparation. Money, the nerve of war, was wanting.”

The Congress needed to establish credit and secure loans, but most countries with the means to invest didn’t think the rebels surrounding Boston looked like a good investment risk.

     Congress’ answer to the money shortage…print it! They started with the idea of printing two million dollars’ worth of paper bills, but quickly decided they needed more. By the end of 1775 they had printed six million. Some of these first bills were engraved by Paul Revere.  They were so thick that the British called them “pasteboard currency.”  Most bills included wording like,

“This bill entitles the bearer to receive six Spanish milled dollars, or the value thereof in gold or silver, according to a resolution of Congress.”

The only problem was that there was no gold or silver, just ink and paper. It’s believed that the total amount of money in the American colonies in 1775 was twelve million dollars, and none of that was in the hands of Congress. The printing had “created” 50% more money, but that didn’t last very long (hey, war is expensive).  They fixed the problem by printing more, with the promise that they would recoup the cash in taxes after the war was over. It was a situation that couldn’t last.

      The crisis of war did not end quickly; it continued for eight years. Congress kept printing more imaginary money, but the people started to see that there was nothing backing it. Thus began our young Country’s first experience with runaway inflation. The money that the Congress paid lost its value before it could be spent, causing prices to jump higher and higher. Soldiers found the money they were paid (if they were paid) to be almost worthless. By 1779 $100 worth of real gold or silver would buy $2,600 worth of Continental currency. Hence the term, “Not worth a Continental dollar.”  Two years later (1781) that same $100 of gold or silver coins (cold hard cash) could buy you $16,800 in Continental bills.