Colonial Virginia's paper money regime, 1755–74: A forensic accounting reconstruction of the data

Abstract

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Colonial Virginia's paper money, 1755–1774: value decomposition and performance

“…Table 1 compiles the paper money Acts passed by the Virginia legislature and lists the key features of each Act including the Tm taxes enacted. For a full accounting of the expected Tm revenues from 1755 to 1769, see Grubb (2017, p. 10). Fifteen separate paper money Acts that involved net new emissions were passed, with a cumulative total of 484,963£ VA in net new emissions made between 1755 and 1774.…”

“…The exercise is like putting together a complex jigsaw puzzle with not all the pieces available. Grubb (2017) provides the details of this exercise. Table 2 reports the data outcome.…”

“…260–1). The Tm payments are estimated to be between 60 and 75 percent in notes and the rest in specie coins (Grubb 2017, pp. 10–11), implying an even smaller per white capita amount of specie money than paper money.…”

A re-examination of the empirical evidence concerning colonial Virginia's paper money, 1755-1774: a comment on Grubb

“…120, 155; Grubb 2018, Table 2). Moreover, because the Journals of the House of Burgesses provide no explicit information on redemptions, Grubb relies on interpolation and guestimates after 1770 to track retirement of the currency (Grubb 2017, p. 104). As Brock (1992, Table 9) previously noted, however, treasury audits reporting redemptions were published in the newspaper beginning in 1768 (Rind's Virginia Gazette , 30 June 1768, 12 January 1769, 29 June 1769, 10 January 1771, 17 December 1772, 24 June 1773, 30 December 1773, 29 December 1774).…”

“…In the late 1760s and early 1770s, the Virginia treasury possessed as much as 15,000 to 20,000£ va of gold and silver that Nicholas, Virginia's treasurer, offered to exchange on demand for its paper money (Rind's Virginia Gazette , 20 June 1771, 14 September 1769; Purdie and Dixon's Virginia Gazette , 25 May 1769, 15 June 1769). He found few takers, because paper money was ‘generally preferred to Gold and Silver’ (Purdie and Dixon's Virginia Gazette , 30 September 1773; Bland 1898; Grubb 2017, p. 108). How can one maintain that Virginia's paper money ‘functioned like a zero-coupon bond and traded below face value due to time discounting’ when paper money was convertible on demand at the treasury, and people spurned the offer?…”