ERA 2: 1775 – 1783
The Revolutionary Era
War finance under pressure: requisitions, paper currency, borrowing, foreign credit, and weak national taxing power.
Financing Independence
The Revolution forced Americans to finance independence before they had a strong fiscal state. Congress needed soldiers, food, weapons, transport, credit, and diplomatic support, but it did not have reliable direct taxing power under the Articles of Confederation. It could ask states for resources, borrow, issue paper currency, and seek foreign support, but it could not consistently compel the revenue needed for war.
Public finance helped keep the cause alive. Continental currency bought time. State taxes and requisitions supplied part of the effort. Domestic borrowing and foreign loans helped turn a political movement into a sustained military campaign. The French alliance mattered not only on the battlefield, but also as a source of credit, supplies, and confidence when American fiscal capacity was weak.
The Revolution showed both the promise and limits of public finance. A shared public purpose could mobilize people and resources, but unreliable revenue created shortages, inflation, and strain. That lesson carried into the Constitution: a durable republic needed taxing authority, borrowing authority, appropriations, accounting, revenue administration, and public credit.
Did you know?
The term “Not worth a Continental” stayed in American slang for over a century to describe anything worthless.
Before the Dollar, Colonies used Spanish Pieces of Eight as their primary hard currency.
Fiscal Facts
Congress issued more than $200 million in Continental currency during the war, while also relying on state requisitions, domestic borrowing, foreign loans, and allied support. The mix kept the war effort alive but damaged trust in the currency.
Case Studies
Stories from the Era
Continental Currency
Continental currency helped finance the war when tax capacity was weak. Find out why the phrase “not worth a Continental” became a lesson in the connection between money, trust, and public revenue.
Foreign Credit & France
The Revolution was not financed by American resources alone. Find out how foreign loans, supplies, and the French alliance helped sustain the fight for independence.
When you can't tax?
The war revealed the limits of a national government that could request funds but not reliably collect them. Find out how Revolutionary finance shaped the fiscal powers written into the Constitution.
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