Marc Liebman's Blog, page 32

Two Proclamations With Unintended Results

When the American Revolution began, the British knew that to win, they had to disrupt the economy of the Thirteen Colonies which was heavily dependent on exports – lumber, dried fruit, fish and vegetables, rice, indigo, cotton and tobacco.

The British were also smart enough to understand that the economies of– Georgia, North and South Carolina and Virginia – were far more dependent on agriculture than the other nine. Back in the 18th Century, farming – planting, weeding and harvesting – was a manual process. There was none of the specialized equipment we see today. Mechanization in those days was a plow drawn by horses or oxen and the plantations were heavily depended on slave labor to produce crops of indigo for blue dye, rice, cotton and tobacco.

Knowing Virginia plantation owners dependence on slave labor, James Murray, the 4th Earl of Dunmore and the Royal Governor for the Colony of Virginia, issued a proclamation November 15th, 1775 that established martial law in the colony and offered freedom for any slave who left a plantation and joined the British Army. Estimates for the number of slaves who joined the British Army vary from 600 to 2,000. Dunmore’s unit was known as the Dunmore’s Ethiopian Regiment and in its first action against the Continental Army in December 1775 at the Battle of Great Bridge, they, along with the British Army were defeated.

Known as Dunmore’s Proclamation, the document had three unintended consequences. One, plantation owners on both sides were angry because none of them wanted to lose the manpower needed to produce crops.

Two, most of the slaves were not inoculated against smallpox and an outbreak in the British Army in the spring of 1776 decimated Dunmore’s unit.

Three, Dunmore was forced out of the colony by Virginia citizens who favored independence. He left with 300 members of the Ethiopian Regiment, never to return. The unit was disbanded and the members distributed amongst units that became known as Black Loyalists.

The second proclamation was issued by General Sir Henry Clinton four years later on June 30th, 1779 to disrupt the economy of Georgia and South Carolina. Clinton also noticed that there were a significant number (approximately 5,000) of former slaves serving in the Continental Army. Several of the southern colonies such as Virginia granted any slave freedom if he served in the Continental Army.

Clinton’s proclamation is interesting because he admits he is following the practice of the Continental Army. Known as the Phillipsburg Proclamation, Clinton wrote in the very first line, “Whereas the enemy has adopted the practice of enrolling Negroes as members of their troops…”

This is a testament to the fighting qualities of the African American soldiers in the Continental Army. Unlike the British Army which placed them in separate units, they served shoulder to shoulder with their white comrades in arms.

Many historians believe the Phillipsburg Proclamation was an admission by Sir Henry Clinton that the British Army was losing the war. Or, or at best, the war was at a stalemate. He hoped that by capturing Savannah and then Charleston, he could turn the tide.

In some ways, Clinton’s proclamation succeeded beyond his expectations because over 5,000 slaves escaped from plantations just in Georgia. He had so many, he ordered many to return to their masters.

At the end of the war, 3,000 were moved to Nova Scotia and some went to Sierra Leone, a British Colony in Africa where they established the colony’s capital, Freetown.

The Sad Story of Pierre Landais Part Deux

Within hours of Captain John Paul Jones relieving him of command of the frigate Alliance, Landais began scheming to get his ship back. Rather remain in port, he went to Paris to meet with the American delegation. Franklin and Deane told him that as the squadron commander, Jones had the power to relieve him of his duties.

Arthur Lee, who was constantly feuding with the other two members of the mission – Silas Deane and Benjamin Franklin – thought otherwise. Lee told Landais that his commission was given to him by the Continental Congress and neither Franklin nor Jones could relieve him.

While Jones was ashore, Landais rounded up all the seamen and officers who he was sure supported Jones and held them below under armed guard.  He then announced that he was back in command of Alliance.

Instead of confronting Landais, Jones went to Paris where Franklin wrote orders to Landais to leave the ship. He also convinced the French Minister of Marine to issue an arrest warrant for Landais.

Armed with these documents, Jones returned to L’Orient only to find that Landais had sailed the ship to nearby Port Louis. Seeing Franklin’s orders, the French Port Captain placed a boom across the harbor mouth and provided Jones with a force to take back Alliance. Landais threatened the attackers with cannon fire and they, with Jones’ consent, withdrew. The boom was removed and Alliance with Landais in command, left for Philadelphia with a half dozen passengers, one of whom was Arthur Lee and his cargo on board.

During the voyage, Landais’ eccentric, quarrelsome and often bizarre behavior caused several incidents with the passengers and crew. On at least three occasions, the ship’s crew refused to obey his orders. Ultimately, Landais was confined to his cabin and the other officers encouraged First Lieutenant, James Degge to take command of Alliance and sail to Boston, the nearest U.S. port.

With the ship safely docked, Landais was ordered off the ship and he refused and had to be forcibly removed. The Board of Admiralty in Boston directed the Continental Navy to conduct two court martials. One would examine Captain Landais’ conduct and the other would determine if Degge and other conspired to mutiny.

Alliance’s next captain, John Barry, was the president of the two boards. Landais was found guilty of four infractions: (1) refusing to obey lawful orders; (2) allowing private goods (Lee’s) to be carried on a naval vessel; (3) not setting an “good” example for his passengers and crew; and (4) not vacating the ship when relieved and ordered to do so. His sentence was “to be broke and rendered incapable of serving in the Navy in the future…”

Degge, on the other hand, was acquitted of all charges. Yet, he was not allowed to stay in the Navy.

After his conviction, Landais returned to France. England and France were again at war in 1792 and he was given command of a French frigate. His command lasted less than a year before a mutiny forced him to return to Brest where Landais was relieved of command. He traveled to New York to sue the new U.S. government for prize money owed to him for ships taken while Alliance was under his command. In 1806,the Congress paid him $4,000 and rejected all other claims. Another attempt to be paid what he believed was the remaining prize money failed in the U.S. Senate in 1815. Landais died in New York City several years later, an impoverished, unhappy man.

The Sad Story of Pierre Landais, Part Un

The rebellion in the Thirteen Colonies drew the Marquis de Lafayette from France, Friedrich Wilhelm von Steuben from Prussia and Casimir Pulaski from Poland and many others who wanted to help our Founding Fathers. The war also attracted its share of men of dubious character such as Pierre Landais.

Early in the American Revolution, Landais was an officer on French merchantmen chartered by the shell company Hortelez et Cie (See blog post of April 26th, 2020) that was smuggling munitions for the Continental Congress. After the French joined the war on our side in March 1778, Landais was made an honorary citizen of Massachusetts and given command of the new 36 gun frigate Alliance.

Future president John Adams who was, at the time, the chairman of the Continental Congress’ Marine Committee was not in favor of the commission. He wrote in his diary on May 12th, 1779 that Landais “is jealous of every thing. Jealous of every body. He knows not how to treat his officers, nor his passengers nor anybody else.”

Alliance was assigned to John Paul Jones’ squadron that was a mix of Continental and French Navy Ships. To those who witnessed their relationship saw there was no love lost between them. Landais thought he should have been given command of the squadron and from the beginning, openly disobeyed orders from Jones. Several times, Landais challenged Jones to a duel but the Scotsman refused.

On September 23rd, 1779, Jones’ five ship squadron met the fourth-rate ship of the line, Serapis along with and the lightly armed Countess of Scarborough that were escorting a convoy of 41 ships. Serapis carried 50 guns (twenty 18-pounders, twenty-two 9-pounders and eight 6-pounders) and was bigger and more heavily armed than any of Jones’ ships.

Jones’ five ships should have been able to overwhelm Serapis. Alliance with eighteen, long 18-pounders and twelve 9-pounders was the best and most modern ship in Jones’ squadron. The ship had been built from the keel up as a frigate designed to take on Royal Navy ships of the same size.

Jones’ flagship, Bonnehomme Richard, was a converted merchant ship armed like a frigate with six 18-pounders, twenty-eight 12-pounders and eight 9-pounders, but didn’t have a warship’s stout hull. Pallas was a small French Navy frigate with twenty-six 9-pounders. Vengeance, a converted merchant ship was equipped twelve 6-pounders and the small cutter Cerf had 4-pounders would play no role in the battle.

Jones signaled his intentions to the squadron on how he wanted to engage Serapis from both sides. Landais ignored Jones’ orders and sailed off on his own taking Pallas, Vengeance and Cerf with Alliance. Pallas broke off from Alliance and fired ineffectually at Serapis from long range. Bonnehomme Richard was a battered, sinking hulk, but still fighting when Landais crossed the stern of Serapis and Bonnehomme Richard. Landais ordered his men to fire at both, but primarily at Jones’ ship. He raked both Serapis and Bonnehomme Richard not once, but twice, killing many Continental Navy sailors.

After the battle Landais confided to a French officer that his intention was to help Serapis sink the Bonnehomme Richard so he could capture Serapis as a prize. He claimed that his broadsides were the ones that cause Serapis to strike.

Jones in the captured Serapis led his squadron to Amsterdam where relieved Landais. What happened next could be the plot of a novel because it is a mix of politics, treachery, animosity and determination and is the subject of next week’s post.

The Undeclared Shooting War Against France

Three unrelated events led to a war with France 15 years after the American Revolution ended. First, in September 1794, Louis XVI was deposed, ending the French monarchy.

Second, in November 1794, the U.S. signed the Jay Treaty with Great Britain that clarified some of the clauses in the Treaty of Paris that ended the American Revolution. The Jay Treaty, opposed by Thomas Jefferson and his pro-French allies in Congress, gave the United States most favored nation status for trade. The result was dramatic and in four years, U.S. sales to England tripled. This did not go unnoticed by France.

Third, the Congress refused to pay off the loans France made to help pay for our revolution. The government’s reasoning was that the money was owed to a government that no longer existed.

By 1792, the First French Republic was at war with Great Britain in the War of the First Coalition which lasted until 1797. The conflict pitted France against Britain, Prussia, plus others. Peace lasted a year before the War of the Second Coalition began in1798 and continued to 1802. In this scrap, the British, Dutch, Portugal, the Ottoman Empire and Russians fought France, Spain and Denmark.

The United States declared neutrality and in December 1796, the French refused the credentials of a new U.S. ambassador thus severing diplomatic relations. Talleyrand, the French Foreign Minister ordered the French Navy to seize American ships and issued letters of marque to privateers who wanted to do the same.

The effect was devastating to U.S. trade and in 1796, the French Navy and French privateers seized 316 U.S. merchant ships. To help the Americans, the British government allowed U.S. merchant ships to sail in convoys escorted by the Royal Navy.

War raging in Europe, the Congress passed the Navy Act of 1794 authorizing six frigates – four with 44 guns (Constitution, Constellation, United States and President) and two with 36 (Chesapeake and Congress). Unfortunately, construction was delayed because the Congress failed to appropriate enough money to finish the ships. Finally, on April 26th, 1796 the Congress authorized the funds to finish Constitution, Constellation and United States which were the farthest along. After the XYZ Affair (see blog post published 8/2/2020) blew up in Jefferson’s face, he and his Democratic-Republicans, agreed to fund the remaining three ships President, Congress and Chesapeake.

Still, men had to be found to man the ships and trained before they could put to sea. The fighting took place primarily in the Caribbean and the new U.S. Navy’s performance was a nasty surprise to the French. The U.S. Navy captured or sunk 118 French privateers, a frigate, a brig and a corvette against one loss that was recaptured.

The Convention of 1800 signed between the U.S. and the France ended the Quasi War during which approximately 2,000 U.S. merchant ships were seized by the French. The U.S. wanted compensation and France refused but forgave our debts. As part of the deal, U.S. agreed to compensate the owners of the ships taken by the French. The last of these claims were not settled until 1915!

The newly formed U.S. Navy proved its mettle in the Quasi War and ended the war much larger and better equipped. In 1800, it had 18 frigates plus other smaller ships. More important, it now had a cadre of experienced officers who would lead the Navy to victories against the Barbary Pirates and the British in the War of 1812.

Smallpox, Variolation and George Washington

In the late summer of 1775, two U.S. forces entered Canada. One, led by General Richard Montgomery came north from what is now Vermont and captured Montreal and then headed up the St. Lawrence River to Quebec City. There, Montgomery’s force was joined by one led by Benedict Arnold that traveled north up the Kenebec River and portaged to the Chaudière River to travel downstream to the St. Lawrence and Quebec City.

The combined force besieged Quebec City and had an excellent chance of taking it. Had they done so, there is a high probability that French Canadians would have joined the revolution bringing to  our side.

However, Mother Nature and winter arrived. The besieging force, encamped in primitive conditions was hit with a smallpox epidemic. Of the three thousand men, half died of smallpox and they were forced to withdraw.

Farther south, George Washington, now commander of the Continental Army was well aware of the dangers of smallpox. On a visit to Barbados with his half-brother Lawrence in 1751, Washington contracted smallpox also known as variola.

By the end of the eight years of war (1775 – 1783), 6.500 Americans would die on the battlefield, another 6,100 were wounded yet 17,000 men in Washington’s army would die of disease, many of which died of smallpox before 1777. And, smallpox did not just affect the Continental Army. In 1777, records show that approximately 100,000 died of the disease in North America. The numbers are startling, but don’t tell the whole story.

Having survived a bout with the deadly disease made Washington aware of the effect smallpox could have on an army. Faced with a smallpox epidemic in the winter of 1777, Washington decided to inoculate his army. In those days, this was no mean feat. By the time the war started, the technique known as variolation had already been proven effective in England.

The procedure was simple. Scabs from smallpox victims were dried, powdered and a small amount rubbed into a minor scratch in the skin. The result was that the individual would have a mild fever, even a few smallpox sores. After a few days, the individual recovered and was immune from the disease.

Purity/quality of the amount ingested varied and the mortality rate was, by 2020 standards, at between .5% and 2.0%. Was it perfect, no, but if one was “variolated,” there was a 98% chance one would not contract smallpox. Given the mortality rate of 30-35% for those who contracted the disease, the risk was deemed acceptable.

New recruits into the Continental Army were inoculated immediately after induction. It took until 1778 to get the army fully vaccinated and deaths from smallpox in the Continental Army dropped dramatically.

To vaccinate the army was one of the most important decisions Washington made during the war. Had he not done so, the Continental Army may have been decimated by smallpox. Having lost the war, we would now be British citizens. What is also significant about Washington’s decision is that this inoculation program was the first of its kind in the world.

L’Affaire de XYZ

By 1792, three years after the French Revolution began, Europe was again at war and President George Washington declared that the United States would remain neutral. Our position of neutrality strained our relations with France and right after John Adams was inaugurated, French/American relations became a crisis when in 1797 the French refused to recognize our ambassador Charles Pinckney. Already French privateers and Navy ships were seizing U.S. flagged vessels in the Caribbean and the Atlantic.

The United States was defenseless because at the end of the American Revolution, we disbanded the Army and the Navy. Even though the Navy Act of 1794 established a Navy, ships had to be built and crews had to be recruited and trained. It would take time before it would become and effective fighting force.

Adams faced a divided Congress. The Democratic-Republicans identified with the espoused ideals of the French revolutionaries and favored closer relations with France. Jefferson and his fellow Democratic Republicans saw any ties to Great Britain as bad for the country even though it was again our latest trading partner. They thought Adams and the Federalists were ‘monarchists.’

President Adams responded to the attacks by calling for a “stronger national defense and an expansion of the Navy” and gained approval to send a commission to France bring the crisis to an end. Three men were appointed. Two – Pinckney who was already in France and John Marshall, another staunch Federalist – distrusted the French. The third – Elbridge Gerry – was thought by Adams to be neutral on the issue.

Nicholas Hubbard (later known as W), was a Brit working for a bank in the Netherlands notified the Americans that a member of the French Foreign Minister’s inner circle, a royal by the name of Baron Jean-Conrad Hottinguer (later revealed as X), would meet with them. Through him, they learned the Foreign Minister, Charles Maurice de Talleyrand-Périgord demanded that the crisis would end if the U.S. paid him £50,000!

To see if he could move the negotiations along because Talleyrand’s demands were not received favorably by the Ameircans, Hottinguer introduced Pierre Bellamy (a.k.a. Mr. Y). Again, an agreement couldn’t be reached. Talleyrand sent Lucien Hauteval (the Mr. Z) to see if he could split Elbridge Gerry away from Pinckney and Marshall. He failed.

The Democratic-Republicans and some conservative Federalists hypothesized that the two attempts to negotiate a solution failed because of Adams’ hardline stance. Jefferson and his followers believed that Adams was using the crisis as an excuse to expand the Army and the Navy. They demanded to see all the correspondence notes from the discussions.

In March 1797, Adams complied. Except for Pinckney, Marshall and Gerry, the names of names of the other players were carefully blotted out to protect their identity. Unfortunately, someone in the Congress leaked the identities of W, X, Y and Z.

With the truth now on the table, the Democratic-Republicans were left without any facts to support their position. Many Federalists pointed to the continuing seizures of U.S. merchant ships and called for a war against France. Adams refused to ask Congress for a declaration of war against France. The Congress voted to repeal the 1778 Treaty of Alliance with France, contracted for 12 more frigates and authorized Adams to order the U.S. Navy to attack French ships setting the stage for the Quasi War of 1798 – 1800 in which the new Navy starts to come of age.

The Republic of Vermont Versus the State of New York

In January 1777, Vermont’s citizens were having an identity crisis. The war in which we would ultimately gain our independence was still very much in down when representatives of 28 Vermont towns met in Windsor, Vermont. They gathered to discuss their independence, not from Britain, but from the neighboring colonies of New Hampshire, New York and Quebec.

Until 1764 when King George III revoked New Hampshire’s claim, the land that is Vermont today was claimed by New York and New Hampshire as part of land grants from the British crown. The residents didn’t trust their neighbors to the east so they wanted to make sure New Hampshire residents understood that Vermont was not their turf.

When the war broke out in 1775, Vermont wanted to send delegates to the Continental Congress and join the revolution. The request was denied based on the objection by New York’s Continental Congress delegation which said, pointing to the land grants from King George III that Vermont was part of New York.

Most Vermonters supported independence from Britain, but didn’t want to be part of either New York or New Hampshire or Canada. Unhappy that the Continental Congress would not accept their delegation, the representatives in Windsor declared the Republic of Vermont with its capital in Windsor, Vermont.

The country wrote a constitution, started a postal service and issued currency. Coins made from copper mined in the state (and known as Vermont Coppers) were issued. Thomas Chittenden became its first governor. The republic established formal diplomatic relations with the United States, The Netherlands and France! It hired a representative from Connecticut to lobby the Continental Congress for admission to the United States.

Even though many Vermonters were fighting the British during the Revolution, they were also frustrated with the Continental Congress which refused them admission so they approached the British in 1780 to join Canada. Hoping to drive a geographic wedge between two colonies and military advantage they failed to gain when Burgoyne was defeated in the fall of 1777, the Brits offered generous terms if Vermont agreed to join as a province of Canada.

However, most Vermonters wanted to join the United States. Its coins bore a Latin inscription the “Fourteenth Star” and the seal of the Republic of Vermont had pine tree with 14 branches.

On March 6th, 1790, the State of New York agreed to admit Vermont as a state if New York and the republic could agree on boundaries without going to court. Negotiations began and the Republic of Vermont agreed to buy New York land that would become part of Vermont for $30,000 in an agreement reached in October 1790. This paved the way for an invitation to become a state that was issued by the Confederation Congress. For the record, the Continental Congress changed its name after the Articles of Confederation were ratified.

Events moved quickly. Vermont formed a convention that voted on January 10th, 1791 to ratify the new U.S. Constitution and apply to join the United States. Two months later, on March 6th, 1791, the Congress admitted Vermont as the 14th state. The act of admission is the shortest of any granted to a future state and is the only one that does not have any conditions imposed by the Congress or by the state from which the new state was created.

A Frigate for Tribute

Before the revolution, our merchant ships flew under the British flag and during the war, the French flag. Both were now gone once we won our independence and after the Continental Navy was disbanded in 1784, in the Mediterranean, the results were predictable. The Barbary Pirates – a collection of fiefdoms in Algiers, Tripoli, Tunis – began seizing our ships and holding them and the crews for ransom.

At first, the men who led these duchies wanted money and small gifts such as engraved firearms with gold and silver hammered into the designs. Every year, the pirates wanted more money and more gifts.

In 1796, the Dey of Algiers demanded a frigate and several smaller ships. We offered a frigate with 24 guns, they wanted one with 40 plus and we settled on a ship with 36. Ultimately, we agreed to provide the frigate, a brig and two schooners!

Think about this for a second. At the time, the Dey of Algiers was using galleys and large dhows to capture merchant ships and by giving them a frigate capable of challenging one in the Royal, French or Spanish navies, we were about to significantly increase his combat power.

Josiah Fox was commissioned by Congress to design the frigate and John Hackett, one of the best shipbuilders of his era, was contracted to build the Algerian frigate in his yard in Philadelphia. It was constructed in the same yard at the same time as one of the six large frigates – United States – authorized in the Navy Act of 1794 was being built.

According to William Prom’s excellent article in the August 2020 issue of Naval History, on June 29th, 1797, the 600 ton, 122 foot-long frigate named Crescent was launched. While capable of carrying 36 guns, a mix of 6- and 9-pounders, it would not have been a match for a Royal Navy ship with the same armament that usually displaced around 800 tons nor the large 1000 ton, 44-gun frigates like United States being built for the new U.S. Navy.

In 1798, Crescent sailed for Algiers with a full load of ammunition, Richard O’Brien, our new ambassador to Algiers, and $180,000 (~$3,633,931 in 2020 dollars) in newly minted silver dollars in tribute. On February 17th, the ship was officially delivered and three American merchant ships and their crews were freed.

Crescent not maintained well by the Algerians. In March 1800, O’Brien discovered dry rot. Five years later, his replacement – Tobias Lear – noted that the ship was leaking badly and in March 1806, Crescent was broken up.

When Crescent was being built during the administration of John Adams, shipyards in up and down the U.S. coast were building ships to equip a new U.S. Navy. While the famous six frigates – Chesapeake, Constitution, Constellation, Congress, President, and United States – are the best known, other ships that served the new navy were also being constructed. Before the 18th Century ended, they would prove their worth. In many ways, we can thank the Barbary Pirates for providing the impetus to creating the modern U.S. Navy.

We Paid What for Tribute?

When the American Revolution ended in 1783, as a country we wanted to resume our trade with Europe and the duchies on the north shore of the Mediterranean. Before the war began, our ships flew under the British flag and enjoyed protection of the Royal Navy. During the Revolutionary War, our merchant ships enjoyed the protection of the French Navy in the Caribbean and Mediterranean.

But, on May 12th, 1784 all that changed when the Treaty of Paris was signed. As of that date, our merchant ships no longer had the protection of the Royal or French Navy or the Continental Navy whose last ship – Alliance – was decommissioned in 1783 and sold in 1785. In other words, once our merchant ships ventured into the Atlantic, they were on their own.

Our leaders rationalized that it was cheaper to pay tribute than pay for a navy. The first treaty was negotiated with Morocco in 1787 for $20,000 (~$528,647 in 2020 dollars). It is the only money we paid Morocco.

Farther into Mediterranean, it was a different story. Starting in 1785, pirates based in Algiers wanted $60,000 (~$1,585,942 today) to give back two ships and 21 captives. We countered with $4,200 (~$111,016 in 2020). It wasn’t nearly enough.

Meanwhile, U.S. merchant ships sailed into the Mediterranean at their own peril. By 1790, Algiers had taken 11 ships and 100+ prisoners. Many of these man languished in captivity in terrible conditions for 11 long years.

It was not until March 27th, 1794 that the Congress passed the Navy Act that created the modern U.S. Navy and authorized the construction of six frigates. Thanks to political wrangling and funding issues similar to what happens today, those ships wouldn’t take to sea for two years.

Frustrated, Secretary of State Thomas Jefferson and Vice President John Adams wanted to create a league nations trading in the Mediterranean to force an end to this piracy. No other country was interested. For the record, the British, Dutch, and French had treaties with the pirates based in Algiers in Algeria, Tripoli in modern Libya and Tunis, the capital of Tunisia that paid the pirate leaders an annual sum to leave their ships alone.

In 1796, we signed a peace treaty with Dey of Algiers that paid him $646,500 (~$17,088,538 in 2020) that also a 36-gun frigate built designed by the same man – James Hackett – in the same shipyard that built John Paul Jones frigate Ranger plus naval supplies to support it.

This left us to deal with the pirates based in Tunis and Tripoli. We paid them each $160,000 (~$479,229 in 2020) plus naval supplies, presents and other materials. One gift was a pair of pistols with gold inlays and diamonds.

The U.S. government didn’t have the money to pay the Algerians or the Tunisians or the Libyans so it borrowed it. Debt service on these loans amounted to 20 percent of the Federal budget!

The treaties didn’t last because the leaders of the Barbary Pirates wanted more and more money every year. In May 1801, the Pasha of Tripoli declared war on the U.S. and the war against the Barbary Pirates was on.

 

Six Ways We Paid for the American Revolution

During the American Revolution, the members of the Second Continental Congress were faced with a dilemma, i.e. how to pay for a war against the most powerful nation in the world without taxes? Taxing the population was a political non-starter. One of the key reasons we rebelled was that the taxes imposed by the British Parliament were considered unjust and unfair. Remember the slogan “no taxation without representation.”

Our leaders in the Continental Congress dug the “funding the war” hole deeper by not giving themselves in the Articles of Confederation the powers to tax. To pay for the war which would eventually cost ~$2,735B in 2020 dollars, our Founding Fathers had to get creative.

So back to how we paid for the war. According to John R. Smith, Jr.’s February 23rd, 2015 article in the Journal of the American Revolution, titled “How was the Revolutionary War was paid for,” the money came from six sources.

One, each state legislatures was allowed to issue its own money. Amazingly, state “dollars” paid for 39% of the war’s expenses.

The second largest source of funds were Continental dollars issued by the Continental Congress to buy supplies, ships, arms and ammunition and pay soldiers and sailors. These dollars covered 28% of the cost of the war.

As the war progressed, the value of the state and continental dollars which were backed by nothing plummeted in value. For example, Congress ultimately printed about $242 million which were at the end of the war worth about $46 million.

By the end of the war, we had 15 currencies in circulation – one from each state, the Continental dollar and the British pound. In some cities, one could use Dutch guilders, Spanish dollars and/or French livres. Imagine the “fun” our founding fathers had in determining the relative value of each currency and the conversion rates!

Method three was issuing debt certificates by state legislatures which were purchased by private citizens. This method of raising money paid for 14% of the expenses required to fight the British.

Number four was that Congress did the same. Its debt certificates covered 10% of the funds needed to pay for the fight against the English. Keep in mind that if we lost the war, the certificates would be worthless. Purchasers of these financial instruments were really investing in the success of the revolution.

The fifth way our Founding Fathers raised money was via overseas loans. Six percent of the money (~$9M) came from borrowing money from Dutch investors and the Dutch (~$6M) and French government ($3M).

Last, the Continental Congress borrowed directly from private citizens. This accounted for roughly 3% of the money needed.

What is ironic is that if one looks at the tax rates of U.S. versus British citizens from 1792 to 1811, you’d learn that tax rates on U.S. citizens were 10 times higher than if we had remained a British colony. But then the war wasn’t about taxation, it was really about independence and freedom.