By Hillsdale College Online Courses August 1, 2015
While successful in leading the country through the Revolutionary War, the Continental Congress failed in several respects. Perhaps most importantly, it could not effectively raise revenue. Paul A. Rahe explains why.
The following video is a clip from Lecture 5 of Hillsdale’s Online Course, “American Heritage,” featuring Dr. Paul A. Rahe, professor of history and Charles O. Lee and Louise K. Lee Chair in Western Heritage.
The Continental Congress, at the time of the Declaration of Independence, could have seized all sorts of powers that it chose not to seize. It was in a situation where everything was in flux. It was asserting powers and those powers were going to be accepted by the people being governed, or not, and it wasn't clear. Would the American people go along with the Declaration of Independence?
It is a fact that in modern times, at the very least, money is the sinews of war. Keeping an army in the field is expensive. They have to be fed. They have to be armed. They have to be clothed. Ultimately, they have to be paid. One of the failures of the Continental Congress is it failed to assert its prerogative to tax. In consequence, it had the situation where it was going to spend money but it couldn't raise money. It could only request the states to provide money. It could request very forcefully but, in truth, it was at the behest of the states.It issued money. It borrowed money. It did all sorts of things to try to keep an army in the field but it did not have the taxation power to back up the currency that it issued by taxing it back into the coffers. To pay for what it borrowed, it had to turn to the states and the states were not always responsive because, of course, the states were responsive primarily to local concerns. It's as if you had to ask permission of 13 different sovereignties and there was a problem with that. In consequence, the Continental Army was underfunded at every turn.