Redemption theories and the value of American colonial paper money

摘要

Before the Revolution American colonies issued paper money known as 'bills of credit'. The bills issued in the Middle colonies held their value surprisingly well despite large wartime fluctuations in the quantity issued, but those issued in New England depreciated as the quantity in circulation increased. The bills' stable purchasing power in the Middle colonies has often been attributed to the redemption provisions enacted when the bills were issued. Similar provisions in New England supposedly failed because New England failed to enforce them. This article explores the comparative enforcement of redemption provisions in the two regions, and in New York in particular, and concludes that differential enforcement does not explain the disparity between the New England experience and that in the Middle colonies.