* "Records of the Federal Convention," vol. III, p. 542.


The business depression which very naturally followed the short
revival of trade was so serious in its financial consequences
that it has even been referred to as the "Panic of 1785." The
United States afforded a good market for imported articles in
1788 and 1784, all the better because of the supply of gold and
silver which had been sent into the country by England and France
to maintain their armies and fleets and which had remained in the
United States. But this influx of imported goods was one of the
chief factors in causing the depression of 1785, as it brought
ruin to many of those domestic industries which had sprung up in
the days of nonintercourse or which had been stimulated by the
artificial protection of the war.

To make matters worse, the currency was in a confused condition.
"In 1784 the entire coin of the land, except coppers, was the
product of foreign mints. English guineas, crowns, shillings and
pence were still paid over the counters of shops and taverns, and
with them were mingled many French and Spanish and some German
coins . . . . The value of the gold pieces expressed in dollars
was pretty much the same the country over. But the dollar and the
silver pieces regarded as fractions of a dollar had no less than
five different values."* The importation of foreign goods was
fast draining the hard money out of the country. In an effort to
relieve the situation but with the result of making it much
worse, several of the States began to issue paper money; and this
was in addition to the enormous quantities of paper which had