Notwithstanding this guaranty, notwithstanding the forced and legal
rating conferred by this enactment, notwithstanding the war spirit, it
depreciated; and in 1779 it was necessary to decree that, disregarding
its normal value, it should be taken at its face. In 1780 it was no
longer taken for customs dues. In 1781 it had no rating and was not even
taken at 1 per cent. of its face value.

Between 1776 and 1780 the issue of paper money increased to $359,000,000.

BANK OF NORTH AMERICA.--In 1781 Mr. Morris, Treasurer, persuaded
Congress to form a bank (the Bank of North America) with a capital of
$10,000,000, of which $400,000 should be turned over to help the
national finances. The capital was too insignificant and the course of
politics too unpropitious to accomplish this end. However, the example
encouraged the States to take up their paper money. Upon the adoption of
the United States Constitution the issuing of paper money ceased, and
gold and silver were the only means of circulation. Thence arose great
embarrassment for the Bank of North America, which, hampered by its
loans to the Government, increased its note circulation to an enormous
proportion. The ebb of paper through every channel finally aroused the
public fears, and people refused the notes. Every one struggled to
obtain metallic money, hence it became impossible to borrow, and
bankruptcy followed. Such was the, excitement that the Philadelphians as
a body demanded and obtained from the Assembly of Representatives a
withdrawal of the charter; but the Bank, relying upon Congress,
continued until March 17, 1787; succeeded even in extending its charter
fourteen years; and later obtained a second extension, limited, however,
to Pennsylvania.

The difficulty experienced in the manufacture of money led Mr. Hamilton,