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The American Revolution of the 18th century had both its triumphs and pitfalls with the newly formed US. The country gained its independence no doubt, but the end of the revolution led to acute financial crisis and damage, affecting the lives of the people. The war resulted in the disruption of business. Heavy public debt, currency issues as well as the loss of England’s economic connection; all translated into a weak and financially crippled economy in the 1780s. The problems were too many, especially monetary and they required proper resolutions. It is true that war brings with it many challenges but we all need to overcome those without a doubt. 

According to an article published on HuffPost, people in debt can dig out of the same provided they know how to deal with their financial woes. One way is DIY debt reduction. You might be wondering what we are talking about all of a sudden. Well, let us explain. You usually pay the minimum amount on all your loans without repaying the big principal amount. It is the greatest blunder you can commit when drowned in debt. On the contrary, if you opt for the Snowball Method, you can start paying off your small loans and then proceed to repay the bigger amounts. Coming back to the economic crisis of America after the revolution, there were many reasons that led to a poor economy. Here are four of the most essential reasons:

1. Currency issues

The new government in the US, post-revolution, contributed to the financial downturn of the country during the 18th century. During the war, the Continental Congress in Philadelphia required to buy supplies for the Continental Army. Consequently, it rolled out the first paper currency throughout the country, called the Continental. Then, there was a problem. The new paper currency was backed by a sole promise that tax revenues in the future would pay off the currency price.

The country was engulfed in war with an undecided result, and therefore, the idea of future revenues did not hold much water during that point in time. Therefore, most US inhabitants viewed the new paper currency with much skepticism. The currency still being circulated during the 1700s was of no value, thus leading to high inflation rates and escalating prices of consumer and daily goods. Simultaneously, with the economic slump prevailing in the country led to price hikes of essential everyday items, thus further complicating the post-revolution crisis in the country.

2. Disruption of trade and business

Though severing connection with England gave America its independence, it led to an economic crisis of mammoth scale. Before the American Revolution, the colonies depended on England for most of the economic activities, including business and trade. The UK bought most American exports and offered subsidized cheap UK imports. Moreover, the American business people and merchants had access to the many benefits of the UK Empire. It included Caribbean sugar, rum, as well as East India tea. When the revolution ended, UK retaliated by controlling American access to its colonial resources. Consequently, England’s demand for American products was practically severed and therefore, the American economy faced a major economic downturn during the 18th century.

The situation became worse when the defensive power of England’s royal navy was no longer available to the US. The American ships had a tough time creating new trade routes, be it the Mediterranean or anywhere else, where sea pirates created havoc on the merchant class.

Economic calamity can affect you even today with mounting debts and no sources to repay your creditors. Fret not. You can look for national debt relief programs in the country and take a consolidated loan to repay all your old debts.

3. Social turbulence

When there is a poor economy, it results in other problems in the country. The poor income and growth of the nation led to grave social upheavals. The burning example is Shay’s Rebellion, a problem during the 18th century, to be precise, in the 1780s. It threatened the US political strength to a considerable extent. The peasants of Western Massachusetts were drowned in huge debts due to policies like a paper currency that proved useless. Besides, the post-revolution tax burden was one of the major reasons that led to social unrest in the country.

Consequently, Daniel Shay, a man hailing from that period motivated numerous Massachusetts peasants to protest against the policies of the government. It eventually resulted in a major revolution. The incident triggered activities like occupying courthouses. However, the then governor of Massachusetts, Bowdoin ordered the army to crush the rebel forces without any delay. It led to major social unrest and disturbances affecting the people of the country.

The same rule holds if you cannot manage your finances and spend extravagantly. You end up in debts with no money to repay your creditors. Therefore, spend according to your income. Do not overspend and enter into debts that you cannot pay. The key to an overcoming the financial crisis is making the right decisions.

4. The wrong policies

The Continental Congress gave birth to the Continental to fund its participation in the war. It made the individual states react to this policy. Due to excess inflation, New England states implemented a price check that controlled the price of commodities at which the items were sold. It made the farmers and peasants of the country upset. They started producing less. Consequently, agricultural production received a significant setback and the production dropped to an alarming state. It led to hyperinflation in the price of farm or agricultural produce.

The situation turned worse because every farmer was forced to take out loans during the price control period to sustain them and become financially stable. The effect of all such things combined and resulted in an economic crisis that lasted until 1800. A couple of data show that the per capita income dropped by 20 percent from 1774 to 1800, a significant reduction that rivals solely the Great Depression.


Now that you know a country like America became financially crippled, it is time that you look into your finances. Start saving, avoid overspending, and become debt-free quickly.