The March to Valley Forge, 1883, by William Trego (Wikimedia)

Our young nation was very poor, the war was very expensive, and Congress and the states wanted everyone else to pay.

Memorial Day is a day to remember and appreciate the ultimate sacrifice given by men and women who have served in our armed forces. Far and away, the Civil War was the deadliest conflict in American history. After that is World War II.

Way down the list is the American Revolutionary War, with “only” 4,435 battle deaths, according to Veterans Affairs. Though few in number, these soldiers bore a unique sacrifice — for, unlike other soldiers throughout our history, these heroes had to fight off the would-be British conquerors without sufficient support from their own government.


On an absolute scale, the American Revolution was a relatively modest affair. However, judged in light of the tiny American economy of 1776–83, it was an enormous undertaking. As a percentage of GDP, the Revolutionary War cost the United States about as much as World War I did (and remember that, before the absolutely massive conflict of World War II, World War I was known as “the Great War”).

For such large-scale conflicts, financing usually comes through issuing public debt. It is just too much to pay via taxation on the citizenry. And indeed, if you look through the government propaganda of World Wars I and II, you will see a relentless emphasis on purchasing war bonds. The problem for America in the 1770s and 1780s was that debt financing was largely unavailable. Domestic wealth was tied up in land, which cannot be quickly turned into cash. And while foreign governments did loan some money to us, none of them lent enough to finance the entire conflict.

That meant that the bulk of public financing had to come through inflation — which at the time meant an increase in paper money not backed by specie (or coins minted from precious metals). The government would print money to pay for goods and services necessary for the war, which would increase the price of those goods and services, inducing the government to print more, and so on. Inflation is essentially a tax on holding cash, and it was in this way that most of the Revolutionary War was paid for.



The Americans suffered two closely related problems with this strategy of finance. A long-run program of inflation sapped public confidence in the currency, which led to the runaway inflation that was evident by 1780, so the currency was not worth anything at all. As a result, the government had to provision the soldiers through impressment of private goods. Meanwhile, private citizens had to barter with one another, because paper money was totally unreliable. When it came to perishable goods that could not immediately be bartered, such as crops, Americans had no incentive to preserve them. This made it all the more difficult for the government to acquire provisions. That led to the bizarre situation of soldiers starving while crops were rotting in the fields.

Unfortunately, this grim situation was worsened by the actions of the Continental Congress. Embarrassed by the low regard for the currency, Congress effectively stripped itself of the power to print money in 1780, outsourcing the authority to the states. Yet this only subjected the public finances of the nation to the same collective-action problem that plagued other essential functions — in other words, each state had an incentive to “free-ride” on the war effort, leaving the burden to everybody else.


This dire financial situation hit the enlisted men worst of all. If you examine, for instance, William Trego’s iconic painting The March to Valley Forge, you will notice the sorry state of the infantry. Some of them are trudging through the snow barefoot. Part of this was owing to the massive scope of the war effort. The United States was a poor country undertaking an expensive war, so provisioning was always bound to be difficult. (It is hard, after all, to find shoes for soldiers in a country that does not make many shoes.) But this difficulty was compounded by the government’s lack of sufficient access to credit markets, the need for inflation with all its attendant problems, and the Continental Congress’s short-sighted policy response to that inflation.


The war effort was the single greatest reason for the nationalist movement of the 1780s, which led in turn to the Constitution. The 1770s was characterized by a revolutionary fervor — informed by a simple, virtuous type of republicanism that rings through the Declaration of Independence. That was the ethos of Patrick Henry, Richard Henry Lee, and Samuel Adams. But five years later, it was others — such as George Washington, Robert Morris, James Madison, and Alexander Hamilton — who had to reckon with the prospect of a failed revolution. They had to deal with the impossible challenge of running a government completely unequipped for the task at hand. This is the origin of our Constitution, born first and foremost of the sacrifice of the Revolutionary soldiers.


So on this Memorial Day, spare a thought for our nation’s first veterans. They were relatively few in number and are now long, long gone, so they are easily forgotten. But their sacrifice was unique — for not only did they fight the most fearsome army in the world, they did so with a government that was unable to give them the support they so desperately required.