Scotland was not the only place having a successful experience 
with issuing paper notes -- so was Pennsylvania.  In fact, it is my 
understanding that the Pennsylvania land bank experiments in part 
were designed to emulate practices in Scotland -- though reading these 
posts make me wonder where the timing is off, because the push to 
print paper money began in 1717, and the first issues were run off 
in 1723. 
     Pennsylvania policymakers were very familiar with the experiences 
of New England with regard to fiat moneys issued in wartime - that is, 
here comes inflation.  So they took great pains to try to figure out 
a mechanism by which there would be "just enough to pass as a 
currentcy", but not too much.  Tying it to land values seemed reasonable. 
So the paper currency was issued on land mortgages at a very low 
interest rate.  I was also intrigued by the degree to which they 
were conscious that making the mortgages available at a below-market 
interst to ANYONE with clear title (in contrast to the usual lending 
arrangements, which required that you KNOW the right person), would 
give a developmental boost at the same time that the paper currency 
would make it easier to conduct local trade. 
     This is an area in which I find formal HET to be a little 
deficient.  And I was wondering if anyone might agree with this. 
I have been following the chain by which American colonials LEARNED 
about effective monetary and developmental policy.  They looked 
around for examples.  They discussed the effects.  They worried 
about possible unintended effects.  They LEARNED.   
     I have also wonderd about a connection between Scottish 
experience and theory and the N.A. colonies, since there were a lot 
of American colonials who went to Scottish universities and hung 
out in the coffee houses. 
     It is this informal building of expectations about economics 
and policy that I am interested in.   
     BTW, during the three decades between the rearrangement of 
PA's internal economic policies in 1723, and the start of the 
Seven Years War in 1755, PA's per capita income (proxied from 
inventories) grew at rates compatible with those of the early 
1800s.  Can't PROVE <g> that the policies CAUSED this.  But at least 
they didn't prevent it! 
     -- Mary Schweitzer