The War for Independence was over. The spirited, though often tattered, militia of the American colonies had defeated the army of one of the greatest nations in the world. Great leaders had emerged from the conflict: George Washington, John Adams, and Thomas Jefferson, to name just a few.
But all was not well. The United States of America, a name the new country had adopted under the Articles of Confederation, was beset with problems. In fact, the 1780s saw widespread economic disruption. The war had disrupted commerce and left the young nation, and many of its citizens, heavily in debt. Furthermore, the paper money issued by the Continental Congress to finance the war was essentially worthless because of the rampant inflation it had caused, and many people were bankrupt, even destitute. Add to this the lack of a strong national government and it’s easy to see how the fragile union forged in the fight for independence could easily disintegrate.
View a lesson to accompany “The First Bank of the United States: A Chapter in the History of Central Banking.”