Bills O Credit

Founders: No Fans of Paper Currency - Deroy Murdock - National Review Online: "Connecticut’s Roger Sherman signed both the Declaration and the Constitution. Thomas Jefferson called him “a man who never said a foolish thing in his life.” Sherman recalled in 1752 that among the Rhode Island colony’s government-issued Bills of Credit, “in the year 1743 . . . twenty-seven shillings Old-Tenor was equal to one ounce of silver. And by an Act of their General Assembly passed in March last, they stated fifty-four shilling Old-Tenor Bills equal to one ounce of silver, which sunk their value one half.”

During the Revolution, Virginia also issued paper money. Its unbearable lightness eventually made Madison and Washington wince as their tenants paid for leased land with worthless currency. For his part, Virginia’s devaluation left Jefferson on the losing end of a large bond transaction. He lived impecuniously for the rest of his life and died broke.

Jefferson’s experience with fiat currency surely influenced his views. “If we determine that a Dollar shall be our Unit,” he wrote in 1784, “we must then say with precision what a Dollar is.” Indeed, the Coinage Act of 1792 declared each dollar worth 371.25 grains of pure silver or 24.75 grains of pure gold."

And they had it good compared to what we now face...