The Continental Congress convened in 1774 to reconcile differences between colony and crown. At this early date, members did not consider an independent federal government nor a means of providing national public goods. It was not until after the Battle of Lexington and Concord, in April 1775, that the second Continental Congress met to consider raising a national army. Without the authority to tax, Congress issued currency to finance the Revolution and backed it with requisitions on the states. But the costs of the war were high and states could not keep up with congressional requests. Even though members of Congress, like Robert Morris, tried, they could never get the system of requisitions to fully work. Members of Congress requisitioned the states in men, currency, specie, and specific supplies. They even created a paper tender receivable for interest due on federal bonds. Returns were always less than they desired. States were more capable of raising money at the war's end, but less willing to comply with requisitions. As a result, Congress could not muster the resources needed to provide even the most basic public goods.

This chapter tells the story of national finance during the Confederation and of congressional attempts to make the system of requisitions work.