THE republic had to begin its history with the worst of financial expedients, an emission of paper money. To the second Continental Congress a committee of the New York Provincial Congress, headed by Gouverneur Morris, presented a report upon the possible methods of raising money for the nation's needs. It believed that an issue of bills would be the soundest measure if they were given immediate and general circulation, and if means were provided for redeeming them. If this were done, it added, the paper "will be a new bond of union to the associated Colonies, and every inhabitant thereof will be bound in interest to endeavor that ways and means be fallen upon for sinking of it."1 Three modes of procedure were available. Each Colony might print for itself the sum apportioned by Congress; or Congress might print the whole, and each Colony become responsible for redeeming its proportionate share; or Congress might print the whole, and apportion the several shares to the different Colonies, but require that if one Province defaulted, its sister Provinces must pay its debt. The committee favored the third plan, and Congress adopted it. On June 22, 1775, it decided to issue bills of credit, not bearing interest; and £3,000,000 was duly emitted.
This emission, earnestly opposed by Franklin and others who wished to obtain money by floating popular loans, was divided among the States on the basis of their supposed population, including negroes. It was not a strictly fair basis, but nearly enough so, for wealth bore a roughly direct ratio to population. Virginia's allotment was the highest, $496,278, and Delaware's the lowest, $37,219.60. There was of course much Congressional guesswork in the estimates of population.2 According to the program of Congress, each Colony was to sink its quota in four equal payments, a____________________