Not Worth a Continental

We picked up an old phrase this week — one nobody under seventy has ever used and nobody under fifty has ever heard. “Not worth a Continental.”

It used to be the go-to line for something worthless. A busted deal. A bad check. A promise nobody kept. Turns out the phrase has a birth certificate, and it's dated 1775.

The Continental Congress needed to fund a war. Taxing the colonists to pay for it was — understandably — a hard sell, seeing as taxation was more or less the whole reason for the war. So they did what every cash-strapped government since has done when the tax collector looks too much trouble. They printed money.

Hundreds of millions of Continental dollars, backed by nothing but a promise. No gold. No silver. Just paper, and the good faith of a government that didn't yet have a country to put behind it.

By 1781, a barrel of flour that cost a few Continentals at the start of the war cost hundreds — sometimes thousands — by the end. It took five hundred to a thousand of the things to buy one real silver dollar. Some states just stopped taking them. Merchants weren't fooled. They rarely are.

The British, sporting fellows that they were, helped things along by counterfeiting Continentals wholesale. Cheaper than fighting, they figured, and just as effective. They were right.

Here's the part we like: the men who wrote the Constitution a few years later had all just watched this happen. They'd been paid in Continentals. They'd watched flour prices go vertical. George Washington himself said paper money “ruins commerce, oppresses the honest, and opens a door to every species of fraud and injustice” — which is a pretty strongly worded sentence for a man not known for strongly worded sentences.

So they built a document with at least a nod toward restraint. It didn't hold forever — nothing does — but it held longer than the alternative.

We mention all this not to relitigate the 1780s. We mention it because the pattern never really left. State banknotes worth ten cents on the dollar in the 1830s. Confederate dollars worth nothing at all by 1865. And then, in 1971, the last thread connecting the dollar to a hard asset got quietly snipped, and the dollar became — officially, permanently — a promise with nothing behind it but more promises.

What a dollar bought in 1971, it now takes about seven of them to buy. That's not a headline. Nobody woke up to it. It just… happened, a little every year, the way a floor sags before anyone notices the house is leaning.

We're told this time is different. The dollar is the world's reserve currency. American institutions are exceptional. History doesn't apply to us the way it applied to everyone else who ever tried this.

Funny thing — the Continental Congress thought the same. So did the Confederacy. So did every wildcat bank in 1840 with its own private currency and its own private confidence in itself.

We don't know how the current chapter ends. Nobody does. But we notice the chapter has been written before, several times, by people just as certain of their own exception.

Maybe someday the grandkids will pick up a phrase of their own. Not worth a dollar. We hope not. But we've noticed history has a sense of humor about these things, and it isn't always kind.

Stay tuned.