The economy during the American Revolutionary War…

1783 CE

The economy during the American Revolutionary War had been one of little more than subsistence agriculture in the rural parts of New England, particularly in the hill-towns of central and western Massachusetts.

Some residents in these areas have little in the way of assets beyond their land and barter with one another for goods or services.

In lean times, farmers might obtain goods on credit from suppliers in local market towns who would be paid when times were better.

In the more economically developed coastal areas of Massachusetts Bay and in the fertile Connecticut River Valley, the economy is basically a market economy, driven by the activities of wholesale merchants dealing with Europe, the West Indies and elsewhere on the North American coast.

The state government is dominated by this merchant class.

Populist Governor John Hancock refuses to crack down on tax delinquencies, and accepts devalued paper currency for debts.

When the Revolutionary War ends in 1783, the European business partners of Massachusetts merchants refuse to extend lines of credit to them and insist that they pay for goods with hard currency.

Despite the continent-wide shortage of such currency, merchants begin to demand the same from their local business partners, including those merchants operating in the market towns in the state's interior.

Many of these merchants pass on this demand to their customers, although the popular governor, John Hancock, does not impose hard currency demands on poorer borrowers and refuses to actively prosecute the collection of delinquent taxes.

The rural farming population is generally unable to meet the demands being made of them by merchants or the civil authorities, and individuals begin to lose their land and other possessions when they are unable to fulfill their debt and tax obligations.

This leads to strong resentments against tax collectors and the courts, where creditors obtain and enforced judgments against debtors, and where tax collectors obtain judgments authorizing property seizures.

Overlaid upon these financial issues is the fact that veterans of the war had received little pay during the war and face difficulty collecting pay owed them from the State or the Congress of the Confederation.

Some of the soldiers, Daniel Shays among them, begin to organize protests against these oppressive economic conditions.

Shays had been a farmhand from Massachusetts when the Revolution broke out; he joined the Continental Army, saw action at the Battles of Lexington and Concord, Bunker Hill and Saratoga, and was eventually wounded in action.

In 1780, he resigned from the army unpaid and went home to find himself in court for nonpayment of debts.

He had soon realized that he was not alone in his inability to pay his debts and began organizing for debt relief.