Happy 249th Independence Day!
As we reflect on this past weekend’s July 4th celebrations, here are a few interesting tidbits about the birth of our nation through a financial lens that helped shape the United States.
The Revolutionary War
• By the end of the war, the U.S. had racked up $75 million in debt, equivalent to $2 billion today. This led to the creation of the first financial institutions and the beginnings of our modern accounting and taxation systems.
Alexander Hamilton
• He was the first Secretary of the Treasury, established the U.S. financial system, proposed a national bank, and introduced practices like funding federal debt—cornerstones of financial policy that continue today.
Tariff Act of 1789
• Ironically, while “no taxation without representation” fueled the revolution, taxes became essential to fund the new government. This was the first major piece of legislation passed after ratification of the Constitution.
Continentals
• The Continental Congress began printing paper money (called “continentals”) to finance the Revolutionary War. Unfortunately, without solid backing from a tangible asset like gold or silver and printing too many, the currency depreciated rapidly.
John Adams
• Technically, the Continental Congress voted for independence on July 2, 1776—but the Declaration was adopted and dated July 4. John Adams thought we’d always celebrate the 2nd as evidenced in his writings.
Coinage Act of 1792
• This act established the U.S. Mint to create standardized currency. Before that, Americans used a mix of British, Spanish, and colonial coins—which made accounting and commerce chaotic. The Mint helped unify the economy and improve trust in the financial system.