Creating the U.S. Dollar Currency Union, 1748–1811: A Quest for Monetary Stability or a Usurpation of State Sovereignty for Personal Gain?

A Common Currency: Early U.S. Monetary Policy and the Transition to the Dollar

“…In this section, I have offered some evidence to contradict the view, recently revived in Grubb (2003), that monetary conditions in the colonial period were conducive to long-run growth. In an earlier paper, Richard Sylla and I describe five components of a "good" financial system as 1) sound public finances and public debt management; 2) stable monetary arrangements;…”

“…These ideas contrast with those advanced in Grubb (2003), which reinterprets the Constitution's ban on state issues as a successful attempt of powerful, moneyed interests to usurp state sovereignty. Michener and Wright (2003) have challenged this view by pointing to a number of factual and conceptual flaws that they find in Grubb's case.…”

The Historical Evolution of Central Banking

“…In 1787, the Constitutional Convention meant to draw a definite line between the monetary competences of the federal and state level: states would be prevented from issuing money directly, but maintained the right to charter local banks of issue; while Congress would have the exclusive right to "coin money and regulate the value thereof"viz., to strike metallic specie. While the meaning of such wording was apparently straightforward to its writers, its correct interpretation was the subject of many decades of harsh disputes (only definitively settled by the Supreme Court in the 1880s) on whether the Constitution provided federal authorities with the right to undertake or regulate the issuance of paper money (Timberlake 1993;Grubb 2003).…”

The U.S. Constitution and Monetary Powers: An Analysis of the 1787 Constitutional Convention and Constitutional Transformation of the Nation's Monetary System Emerged

“…Colonial America had experienced stable fiat paper money regimes (Ferguson 1969, 249;1983, 404;Grubb 2003Grubb , 2004Perkins). Why didn't the founding fathers replicate that system?…”

“…These powers were not a reason why the Convention was called. They were not issues at the 1785 Mount Vernon Conference or at the 1786 Annapolis Convention, nor were they issues in the numerous amendments to the Articles of Confederation from 1781 through 1786 (Grubb 2003(Grubb , 1789Jensen I, 140-229;Rutland II, 814-822). The primary reasons given for calling the Convention were to solve trade and navigation disputes between the states and to secure an independent source of tax revenue for the national government.…”