Wartime Inflation During The American Revolution

1625 Words7 Pages

Avery Fox
Mrs. Nisco
English/Social Studies 7
28 March 2023
My Brother Sam is Dead Research Paper: Wartime Inflation

Wartime inflation was a significant issue during the American Revolution for many people. There were food shortages that left some people hungry, and others stealing cattle. Prices would go up very rapidly and there was a law instilled to control the prices at which consumers would buy items. The value of the currency was constantly changed and it was difficult to convert the worth of money from one colony to another. Congress generally made wartime inflation an even larger issue for the colonists. Inflation during the American Revolution harmed the economy because it provided many struggles in businesses, banks, and everyday …show more content…

Things were complicated considering that each colony had its own currency, and there wasn’t a “set in stone” currency used throughout the colonies. During the American Revolution, there wasn’t very much paper money given by the Colonial Government. So coins or species were used instead of paper money, but since England was in control Colonists began to become scarce of coins. The cause of the inflation was related to taxes and the lack of money in Colonial America. When trade, processing, and small scale were brought into the equation the issue escalated. Especially trade through the Caribbean and Southern Europe, because finished goods were imported from England. Like it is nowadays, depending on the job a colonist worked, they would receive a different balance of coins than someone with a different job. Often individuals would complain that the amount they were receiving for labor was too low. Money was never enough even though it moved around in large …show more content…

Paper money was in favor and became a major part of the economy, and almost 75 percent of the currency used was paper money. A great thing for our country was established in 1686, the first American Land Bank began in Massachusetts. The great thing about this bank was that it accepted deposits unlike the other banks established. They were not considered to be “real banks”, so instead of accepting deposits, they created something called “Bills on Loan”, which was used by people who borrowed money. The downside was that the government would allow you to use a certain amount of these “Bills on Loan” before reaching a limit. The reason behind this was to set security for the amount of money that was being borrowed from these “banks”. Soon the “Bills on Loan” notes became legal for all debts. In a way, it wasn’t exactly fair to people in the past, because the principal and interest payments were supposed to be paid annually, but now were extended for the first few years. Once those years had passed the payment form would be in a note of “Bills on Loan” or

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