The Continental Congress was struggling to find funds and provisions for the Revolutionary forces when it decided to issue its own currency. On June 22, 1776, it issued $2 million in paper money. The currency featured the likeness of Revolutionary soldiers and carried the inscription, “The United Colonies.”
The “Continentals,” as the bills were known, were not backed by gold or any other assets. Merchants distrusted their value and demanded more and more of them for the same amount of goods. General George Washington complained that, “A wagonload of currency will hardly purchase a wagonload of provisions.”
By the end of the war the new currency was virtually worthless. The bills were ultimately redeemed by the new United States government at 1/100th of their face value. Because of this experience, the phrase “not worth a Continental” became a way to describe something that was virtually worthless.
The lesson also convinced our Founding Fathers to insist that any currency issued by the U.S. government be fully redeemable in gold or silver—a requirement that became part of our Constitution and was honored for the next 100 years. Today, of course, our currency is only backed by “the full faith and credit of the United States,” which some cynics (this writer included) say explains why the value of the dollar continues to fall.