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How did America's founders pay for the Revolution, and who owed the money after?
Research question: How did America's founders finance the Revolution, and who held the debt afterward?
The records show that the Revolution was financed through the issuance of bills of credit, which were later scaled down from a value of 40 to 1 3. Afterward, the debt was held by a mix of original holders, such as soldiers and citizens, and speculators who purchased public securities in the open market at prices significantly lower than their face value 45. The total expense of the war was estimated at approximately 100 million dollars, with about 80 million dollars of that debt due at the time of the 1790 debate 12.
Checked 2026-10-15. Only documented and supported facts are used.
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[1] documented
The total expense of the American Revolution was estimated to be approximately 100 million dollars.
"the whole expence of the war is supposed to be about one hundred 76 millions dollars"Image 2 of Gazette of the United-States (New-York [N.Y.]), March 10, 1790
[2] documented
At the time of the debate, approximately 80 million dollars of the war debt was due, excluding an additional 2 million dollars owed to a specific class of soldiers.
"of which there is now due about 80000000 dollars, exdunve of 2000000 supposed to be due to the third class of soldiers"Image 2 of Gazette of the United-States (New-York [N.Y.]), March 10, 1790
[3] documented
The debt was initially financed through the issuance of bills of credit, which were later scaled down from a value of 40 to 1.
"having reduced the old bills from 40 to 1, did Congress attempt to refcale them when they funk, to 1000 fori ?"Image 2 of Gazette of the United-States (New-York [N.Y.]), March 10, 1790
[4] documented
Speculators and assignees purchased public securities in the open market, often at prices significantly lower than their face value, such as giving a dollar in securities for an acre of land that was worth only one-fifth of a dollar in those securities.
"what isto be done with them who have given Congress a dollar in public securities for an acre of land, such as you will now fell for one fifth of a dollar in the fame securities"Image 2 of Gazette of the United-States (New-York [N.Y.]), March 10, 1790
[5] documented
The debate centered on whether to discriminate between original holders of public securities (such as soldiers and citizens who loaned property) and assignees who purchased them later.
"Whether there shall be a discrimination between the original and afligned holders of public Mr. Gerry dated, that the foundation of the motion for a dis discrimination - crimination discrimination was the heavy losses sustained by our brave and ve veteran - teran veteran soldiers, in the falc of their public Securities."Image 2 of Gazette of the United-States (New-York [N.Y.]), March 10, 1790
[6] documented
The proposed plan to finance the debt involved an annual tax in state notes of £6000.
"An annual tax in state notes of £.60c0"Image 1 of Fowle's New-Hampshire gazette and general advertiser ([Portsmouth, N.H.]), October 12, 1786
[7] supported
The debt of the United States was described as the price of liberty.
"The debt of the United States . . . was the price of liberty."chapter seven Report Relative to a Provision for the Support of Public Credit (January 9, 1790) The debt of the United States . . . was the price of liberty. (2018)
[8] documented
Alexander Hamilton regarded the assumption of state debts as an indispensable feature of his fiscal program.
"the assumption of state debts, a measure which Hamilton regarded as an indispensable feature of the fiscal program he had proposed in his Report on the Public Credit, submitted to Congress some five months previously."The Compromise of 1790 (1970)
[9] documented
The measure for the assumption of state debts was defeated two months prior to the compromise, largely due to opposition from Southern congressmen.
"assumption, supported by many Northerners, had been defeated some two months earlier, largely by its Southern opponents."The Compromise of 1790 (1970)
[10] documented
The compromise involved modifying provisions of the debt assumption that Virginians considered inequitable.
"The arrangement agreed upon was that certain provisions of the assumption which Virginians regarded as inequitable would be modified"The Compromise of 1790 (1970)
[11] supported
James Madison agreed not to oppose the amended debt assumption measure, although he did not vote for it.
"that Madison, while not voting for it, would not oppose the amended measure"The Compromise of 1790 (1970)
[12] supported
Jefferson or Madison were tasked with securing the enactment of the debt assumption by persuading two Virginia congressmen.
"that Jefferson or Madison would then secure enactment of assumption by persuading two Virginia congressmen-"The Compromise of 1790 (1970)