Reviewed by Oct 05, 2020| Updated on
Continentals are the paper currency which was provided by the Continental Congress back in the year 1775. It was done in order to provide funding for the American Revolutionary War. Particularly, continentals were issued between 1775 and 1779.
They were the newly minted paper currency in the colonial era and was specifically made in order to finance the expenses of the war. However, the continentals currency lost its value quickly. This is because the currency did not have a backing in the form of physical silver or gold, and a lot of them were minted. These two factors resulted in the continentals lose their way out.
Continentals were floated by the revolutionaries in the new world colonies as they did not have enough funds to stage a long fight against the Britisher. In the year 1775, the continentals of worth USD 2 million was issued by the Continental Congress in the form of paper bills of credit.
The paper bills were representing the first significant currency of the colonies and also carried the images of the soldiers involved in the revolutionary war. The currency did not have backing by any tangible asset. The continentals supposedly carried the future tax revenues that were anticipated the Continental Congress. The war created enough troubles for the currency, and it could not withstand the same, thereby losing its value.
The Continental Congress terminated the issuing of the continentals in the year 1779. By the year 1785, the currency was lost its value almost entirely, and the people did not accept the payments made in this currency in exchange for goods and services.
The financial troubles started haunting the new nation, and its leaders were thrown up with several challenges, and they found it difficult to settle the war debts. Also, they wanted to set up the country’s first-ever financial institution in order to curb inflation and restore the worth of the country’s money.