53. FINANCES (1781-1788).


[Sidenote: Financial status.]
[Sidenote: Requisitions.]

The financial condition of the Confederation was throughout deplorable (sec.
43). The Revolution imposed upon the country a heavy debt. The accounts of
the government were so badly kept that to this day it is impossible to
state the amount; but it was probably about thirty millions, with an
annual interest charge of about two millions. The necessary expenditure
for the support of Congress, of the army on a peace-footing, and of the
executive and judicial boards and departments, called for about half a
million more. The continental currency had practically been repudiated,
and no more could be floated; Congress had no power to lay either direct
or indirect taxes; the post-office had an income of about $25,000 a year,
all of which was expended upon the service. Hence Congress fell back on
requisitions apportioned on the States: one of its principal functions was
each year to calculate the amount necessary for the public service, and to
call upon the State legislatures for their quota. The total sum required
from 1781 to 1788 was about $16,000,000. Of this there had actually been
paid during the seven years $3,500,000 in specie, and $2,500,000 in
certificates of national indebtedness. The annual cash income of the
government was therefore about half a million, which was entirely absorbed
by the necessary running expenses of the government, leaving nothing for
the payment of interest.

[Sidenote: Morris's administration.]