Is Paper Money Just Paper Money? Experimentation and Variation in the Paper Monies Issued by the American Colonies from 1690 to 1775

Farley Grubb

No 15-07, Working Papers from University of Delaware, Department of Economics

Abstract: The British North American colonies were the first western economies to rely on legislature-issued paper monies as an important internal media of exchange. This system arose piecemeal. In the absence of banks and treasuries that exchanged paper monies at face value for specie monies on demand, colonial governments experimented with other ways to anchor their paper monies to real values in the economy. These mechanisms included tax-redemption, land-backed loans, sinking funds, interest-bearing notes, and legal tender laws. The structure and performance of these mechanisms are explained and assessed. This was monetary experimentation on a grand scale.

Keywords: Adam Smith; Benjamin Franklin; bills of credit; fiat currency; interest-bearing money; land banks; legal tender laws; paper money; sinking funds; tax redemption; zero-coupon bonds (search for similar items in EconPapers)
JEL-codes: E42 E50 F31 G10 H60 K29 N11 N21 N41 (search for similar items in EconPapers)
Pages: 69 pages
Date: 2015
New Economics Papers: this item is included in nep-his, nep-hpe, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Chapter: Is Paper Money Just Paper Money? Experimentation and Variation in the Paper Monies Issued by the American Colonies from 1690 to 1775 (2016)
Working Paper: Is Paper Money Just Paper Money? Experimentation and Variation in the Paper Monies Issued by the American Colonies from 1690 to 1775 (2012)
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