<P> The flag closely resembles the British East India Company flag of the era, and Sir Charles Fawcett argued in 1937 that the company flag inspired the design . Both flags could have been easily constructed by adding white stripes to a British Red Ensign, one of the three maritime flags used throughout the British Empire at the time . However, an East India Company flag could have from nine to 13 stripes, and was not allowed to be flown outside the Indian Ocean . </P> <P> In any case, both the stripes (barry) and the stars (mullets) have precedents in classical heraldry . Mullets were comparatively rare in early modern heraldry, but an example of mullets representing territorial divisions predating the U.S. flag are those in the coat of arms of Valais of 1618, where seven mullets stood for seven districts . </P> <P> On June 14, 1777, the Second Continental Congress passed the Flag Resolution which stated: "Resolved, That the flag of the thirteen United States be thirteen stripes, alternate red and white; that the union be thirteen stars, white in a blue field, representing a new constellation ." Flag Day is now observed on June 14 of each year . While scholars still argue about this, tradition holds that the new flag was first hoisted in June 1777 by the Continental Army at the Middlebrook encampment . </P> <P> The first official U.S. flag flown during battle was on August 3, 1777, at Fort Schuyler (Fort Stanwix) during the Siege of Fort Stanwix . Massachusetts reinforcements brought news of the adoption by Congress of the official flag to Fort Schuyler . Soldiers cut up their shirts to make the white stripes; scarlet material to form the red was secured from red flannel petticoats of officers' wives, while material for the blue union was secured from Capt . Abraham Swartwout's blue cloth coat . A voucher is extant that Capt . Swartwout of Dutchess County was paid by Congress for his coat for the flag . </P>

How many stars were on the original american flag