Why might people distrusted the value of paper currency issued by the continental congress during the revolutionary war?

Answer 1

Paper money has no intrinsic value and is easy to counterfeit. As a result, massive amounts of paper money were printed and distributed. The market had more money than goods and services, thus resulting in higher prices for goods and services, in the process it devalued the paper money.

Answer 2

The currency wasn't actually backed by anything other than the government's assertion that it was, in fact, money. This is, essentially, the same situation we have now, but at the time Fiat money was a novel concept. Also, the government made no real efforts to reduce or even maintain stable the amount of paper currency in circulation, meaning that it just kept increasing.

Answer 3

Financing for the American War for Independence included loans and subsidies from the French government as well as the modest sums Congress received as a result of its requisitions upon the states. But paper money played a central role in Revolutionary War finance.

When Congress first began printing bills of credit (irredeemable paper money that would be received as payment for taxes) in 1775, the idea was that the states would levy taxes and collect the bills in payment of the taxes, thereby retiring them. Not only did the states not levy those taxes, but they also began printing paper money of their own. The result was that more and more paper continued to be printed, leading in turn to a level of depreciation that has become legendary.

Answer 4

there wasn't enough silver or gold to back it up