The Continental Dollar: How the American Revolution was Financed with Paper Money--Initial Design and Ideal Performance
The purpose of this paper is to convince the reader that the Continental dollar was a zero-interest bearer bond and not a fiat currency--thereby overturning 230 years of scholarly interpretation; to show that the public and leading Americans knew and acted on this fact, and to illustrate the ideal performance of the Continental dollar as a zero-interest bearer bond. The purpose of establishing the ideal performance is to create a benchmark against which empirical measures of depreciation can be evaluated in future papers.
Preliminary versions were presented at Queens University, Kingston, Canada, 2010; University of Cambridge, Cambridge, UK, 2010; the National Bureau of Economic Research, Cambridge, MA, 2011; the annual meeting of the Economic History Association, Boston, MA, 2011; the University of Delaware, Newark, DE, 2011; the Conference on "The American Constitution: 225th Anniversary of the Ratification" sponsored by the National Science Foundation held at the University of Georgia, Athens, GA, March 2013; and the Seventh World Congress of Cliometrics, Honolulu, Hawaii, 2013. The author thanks the participants for their comments. Research assistance by John Bockrath, Jiaxing Jiang, and Zachary Rose, and editorial assistance by Tracy McQueen, are gratefully acknowledged. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.