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| | So Congress began to print paper money, and began to issue it in large amounts. Predictably, [[inflation]] increased to the point where the paper money became worthless. (Inflation is when prices keep going up and up as the dollar loses its real value, because from month-to-month and year-to-year it takes more and more dollars to buy the same thing.) Paper money was then avoided by the people, who wanted only to accept European coins, made of gold or silver, as currency. Because there was much less of this money than there had been of the printed money, rapid deflation occurred next, causing a depression. | | So Congress began to print paper money, and began to issue it in large amounts. Predictably, [[inflation]] increased to the point where the paper money became worthless. (Inflation is when prices keep going up and up as the dollar loses its real value, because from month-to-month and year-to-year it takes more and more dollars to buy the same thing.) Paper money was then avoided by the people, who wanted only to accept European coins, made of gold or silver, as currency. Because there was much less of this money than there had been of the printed money, rapid deflation occurred next, causing a depression. |
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| − | Rhode Island even tried to force citizens to use its paper money (as mentioned above), which people avoided because it was losing its value over time. | + | People wanted to use coin money that had some inherent value as gold, silver, or other valuable mineral, rather than paper money which became worthless over time. The phrase "not worth a Continental" referred to paper money authorized by the Continental Congress in 1775 to finance the war. The money became worthless because nothing like gold or silver backed it up, and states continued to use their own currencies. Rhode Island even tried to force citizens to use its paper money (as mentioned above), which people avoided because it was losing its value over time. |
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| − | Massachusetts was the only state that did not follow the trend for printed money, which makes sense because Puritans tended to take their principles seriously. But the hardship sparked Shays' Rebellion, which is discussed further below. | + | Massachusetts was the only state that did not follow the trend for printed money, which makes sense because Puritans were strict about almost everything. But hardship resulted for farmers from this "hard money" policy of the Puritans, because farmers tend to be in debt and prefer some inflation to alleviate the burdens of paying back loans. The hardship in Massachusetts sparked Shays' Rebellion, which is discussed further below. |
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| − | Keep in mind that conflicts over money were as important throughout history as it is today in families. Whether or not money is the root of all evil, it is the root of many conflicts in history and shapes the course of human events. For example, there has always been constant conflict between people who owe money (debtors) and people who save or lend money (creditors). Farmers are often debtors and they have always had conflicts with banks, which lend them money. | + | Keep in mind that conflicts over money were as important throughout history as it is today in families. Whether or not money is the root of all evil, it is the root of many conflicts in history and shapes the course of human events. For example, there has always been constant conflict between people who owe money (debtors, including farmers) and people who save or lend money (creditors, including bankers). Farmers are often debtors and they have always had conflicts with banks, which lend them money. |
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| − | In colonial America, people who could not pay their debts went to jail, and this was known as "debtor's prison." The entire colony of Georgia was founded by people who had been in debtor's prison in England. [[Founding Father]] [[Robert Morris]], who paid for [[George Washington]]'s troops during the American Revolution, ended up in debtor's prison for four years and died a few years after his release. Debtor's prison was not abolished in federal law until 1833 and by most of the states soon afterwards.<ref>http://myvesta.org/history/history_debtorprison.html</ref> But even today some Americans can be imprisoned for failure to make payments that are ordered by courts. | + | In colonial America, people who could not pay their debts went to jail, and this was known as "debtor's prison." The entire colony of Georgia was founded by people who had been in debtor's prison in England. [[Founding Father]] [[Robert Morris]], who paid for [[George Washington]]'s troops during the American Revolution, ended up in debtor's prison for four years after the War due to risky investments by him, and he died a few years after his release. Debtor's prison was not abolished in federal law until 1833 and by most of the states soon afterwards.<ref>http://myvesta.org/history/history_debtorprison.html</ref> But even today some Americans can be imprisoned for failure to make payments that are ordered by courts. |
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| | '''Debate: Is Debtor's Prison Wrong?''' | | '''Debate: Is Debtor's Prison Wrong?''' |