1. Issuing Authority: The individual colonies issued their own money before the formation of the Continental Congress. Each colony had its currency and controlled the issuance and regulation of its money supply. In contrast, the Continental Congress issued money at the federal level after its establishment in 1775.
2. Purpose: The colonial currencies were primarily used within the respective colonies and served as a medium of exchange for local trade and commerce. The Continental Congress issued money to finance the Revolutionary War effort, covering military expenses, supplies, and other costs incurred during the war.
3. Value and Stability: The value and stability of colonial currencies could vary depending on several factors, including economic conditions, resource availability, and political instability. The Continental currency experienced a significant decline in value during the Revolutionary War due to excessive printing, lack of specie (gold and silver) backing, and inflation caused by war-related expenses. This led to a loss of confidence in the Continental currency, resulting in its depreciation.
4. Legal Tender Status: In most cases, colonial currencies were considered legal tender within their respective colonies. However, the Continental currency faced challenges in gaining widespread acceptance as legal tender across all the colonies. Many colonies and merchants were hesitant to accept it at its face value due to concerns about its stability and redeemability.
5. Redemption and Backing: Some colonial currencies were backed by specie or commodities, while others were fiat money (not backed by any physical assets). The Continental currency was initially issued on the promise of redemption in specie, but as the war progressed, the Congress struggled to meet its redemption commitments. Consequently, the value of Continental currency declined, and it eventually became virtually worthless.
6. Design and Printing: The designs of colonial currencies varied depending on the issuing colony. They often featured symbols, seals, or engravings that reflected the colony's identity and history. The Continental currency had a more uniform design and was printed by centralized presses under the authority of the Congress.
In summary, the key differences between the money issued by the colonies and the Continental Congress involved the issuing authority, purpose, value stability, legal tender status, redemption and backing, and design features. The Continental Congress faced the challenge of establishing a unified currency system amidst the financial uncertainties and complexities of the Revolutionary War.