Financing the War

When the Congress ran out of hard currency—silver and gold—it borrowed money by selling bonds to American investors and foreign governments, especially France. * It also printed paper money called Continentals. As Congress printed more and more money, its value plunged, causing rising prices, or inflation. *The Congress also struggled to equip the beleaguered army. With few munitions factories and the British navy blockading the coast, the Americans had to smuggle arms from Europe. *Some government officials engaged in profiteering, Corrupt merchants either hoarded goods or sold defective merchandise like spoiled meat, cheap shoes, and defective weapons.