What had happened to the value of public securities (war bonds) since the end of the Revolution
The value of public securities, including war bonds, following the end of the American Revolution varied significantly. Initially, there was a great deal of optimism and enthusiasm about the newly independent United States, which helped boost the value of these securities. Many people believed that the nation's future was bright and that investing in war bonds would yield profitable returns.
However, this optimism was short-lived. The United States, having accumulated a significant amount of debt during the war, struggled to repay its obligations. The value of war bonds started to decline as concerns grew over the government's ability to honor its debt. Additionally, Congress lacked the power to levy taxes or regulate trade effectively, making it challenging to generate revenue and stabilize the economy.
The Confederation government's financial difficulties, along with the lack of a strong central authority, led to rampant inflation. This further eroded the value of public securities, including war bonds, as the currency depreciated rapidly. People began to lose confidence in these investments, resulting in a decline in their value.
The situation reached its peak during the economic downturn known as the Panic of 1785. Many investors suffered financial losses as the value of their war bonds plummeted. They struggled to sell these securities or recoup their investments, exacerbating the economic crisis.
Ultimately, the value of public securities like war bonds was significantly impacted by the post-Revolution economic challenges faced by the United States. Only with the establishment of a stronger federal government under the Constitution and the assumption of state debts did some confidence return to the market. However, it took several years for the value of these securities to recover fully.