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Watch the video in Section 6. It will help you understand Chaim Salomon's role more clearly before you answer the later questions.
When the American colonies declared independence in 1776, they created a new national government known as the Continental Congress. This government led the war effort, managed foreign relations, issued money, and tried to supply the Continental Army.
Yet Congress faced a serious structural weakness from the beginning: it had no stable source of income. It could request money from the states, but it could not directly tax the people. If states refused or delayed payment, Congress had very few ways to compel them to contribute.
This meant that the Revolution was not only a political and military struggle — it was also a financial one. The American cause depended on whether a weak government could somehow pay for a long and expensive war.
War required enormous resources. Soldiers needed food, clothing, weapons, ammunition, transportation, medical care, and pay. Officers also needed a way to purchase supplies from farmers and merchants. Without reliable funding, even a motivated army would quickly dissolve.
Military strength therefore depended on financial strength. An army could have brave soldiers and skilled commanders, but without supplies and pay, it could not remain in the field for long.
Because Congress could not collect enough tax revenue, it turned to an apparently simple solution: print paper money. This money became known as Continental currency.
At first, printing money helped Congress pay for supplies. Over time, however, too much paper money entered circulation. The value of the currency fell, prices rose, and people became less willing to accept Continental money as payment.
This process is called inflation. During the war, inflation became so severe that the phrase "not worth a Continental" became a common expression for something nearly worthless. By 1780, it took roughly forty Continental dollars to purchase what one dollar had bought in 1775.
As Continental currency lost value, Congress faced a second, deeper problem: it became increasingly difficult to borrow money. Borrowing depends on credit, and credit depends on trust.
A lender must believe the borrower can repay. But Congress had no dependable income, no direct taxing power, and a growing mountain of debt. Lenders — whether European bankers or American merchants — grew cautious. Why lend money to a government that might collapse before it could repay?
By the later years of the war, the financial crisis had moved beyond a simple shortage of cash. The American government was losing the credibility needed to borrow more. Both its currency and its credit were in danger of total collapse.
In 1781, the financial crisis reached a pivotal moment. General George Washington identified an extraordinary opportunity: the British army under Cornwallis was trapped at Yorktown, Virginia. A swift, coordinated campaign — combining Washington's forces with French allies — could force a decisive British surrender.
Yet Washington's army was short of money and supplies. Soldiers had gone unpaid for months. Morale was fragile. The campaign required immediate funds to move troops south, secure supplies, and maintain discipline.
According to later accounts, Washington needed approximately $20,000 to set the campaign in motion. Robert Morris, the Superintendent of Finance, had almost nothing available and his credit was exhausted. The greatest military opportunity of the war was endangered not by British strength — but by empty American coffers.
Washington's Yorktown opportunity required immediate funding. The army needed pay, supplies, and confidence at exactly the moment the government had little money and limited credit. The question was whether private sources could fill the gap that government could not.
Chaim Salomon was born in 1740 in Poland to a Sefardic Jewish family. In 1775, he immigrated to New York City, where he quickly established himself as a financial broker. By 1776, he had joined the Sons of Liberty and was actively supporting the Patriot cause.
The British eventually arrested Salomon and held him for 18 months, using him as an interpreter for their German (Hessian) soldiers. While in British custody, he used his position to help Continental soldiers escape, persuade German soldiers to desert, and carry out acts of espionage on behalf of the American cause.
He was captured again in 1778 for spying and sentenced to death. He escaped and fled with his family to Philadelphia, arriving nearly penniless. Once in Philadelphia, Salomon rebuilt his financial practice at the very center of the Revolution. Congress officially named him "Broker to the Office of Finance of the United States," and France named him "Treasurer of the French Army in America."
As a broker, Salomon's primary role was to sell government securities — essentially, certificates of debt. When Congress needed money, it issued these certificates. Salomon found buyers, negotiated favorable rates, and delivered the proceeds to the government.
This work required an unusual combination of skills: financial expertise, a broad personal network, fluency in multiple languages (he spoke English, French, German, Polish, Yiddish, and others), and a reputation for honesty that made both buyers and sellers trust his word.
Salomon did not merely sell securities for Congress. He also personally extended credit to key leaders of the Revolution. James Madison — later the fourth president — borrowed money from Salomon multiple times to survive financially while serving in Congress. Madison's own ledger records these loans. Thomas Jefferson also borrowed from him. Robert Morris, the "Financier of the Revolution," worked in close partnership with Salomon to stabilize the government's finances in the war's final years.
I have for some time been a pensioner on the favor of Haym Salomon, a Jew broker. The kindness of our little friend in Front Street, near the coffee house, is a fund which will preserve me from extremities, but I never resort to it without great mortification.
Chaim Salomon died in Philadelphia on January 6, 1785, at the age of 44. He died nearly bankrupt because the loans he had extended to Congress and to individual leaders were largely uncollected. His family was left with very little.
For much of American history, Salomon's role was underappreciated or forgotten. In 1975, the United States Postal Service issued a stamp in his honor as a "Financial Hero of the American Revolution." A statue of Washington flanked by Robert Morris and Chaim Salomon stands in Chicago's Heald Square.
Salomon's story raises broader questions that historians still debate: How do private financial networks interact with public institutions during crises? What does it mean to contribute to a national cause when one's community is marginalized within that nation? And what do we owe to people whose contributions were essential but whose names were forgotten?
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"Survival Under Pressure: War, Finance, and Chaim Salomon"
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