Department of Economics
University of Delaware
Working Paper #2008-21
The Distribution of Congressional Spending During the American Revolution, 1775-1780:
The Problem of Geographic Balance
Resources to fight the War for Independence from Great Britain (1775-1783) were to be provided to the U.S. Congress by the individual states based on each state’s population share in the united colonies. Congressional spending, however, largely flowed to where the theater of war was located. Thus a geographic imbalance in revenue and spending arose. Because much of the spending was through issuing paper money, geographic variation in inflation as well as in general economic activity resulted. This in turn affected the relative strength of each state’s attachment to the union with ramifications on maintaining political unity.
JEL Codes: E62, H60, H77, N11, N41
Keywords: American Revolution, War Finance, Fiscal Federalism, Paper Money, Continental Dollar