Anne Mayhew writes in response to Mary Schweitzer, "(1) Your suggestion that Pennsylvania took the landbank route to issuing paper currency in part because "Pennsylvania policymakers were very familiar with the experiences of New England with regard to fiat moneys issued in wartime" bothers me. I am no expert in this area but my understanding (based on such work as that of E. James Ferguson, "Currency Finance: An Interpretation of Colonia Monetary Practices," William and Mary Quarterly, X: 153-180) was that bills of credit issued in New England often depreciated against hard money or bills of exchange but that inflation (in any modern sense) was by no means a universal problem. I do not quarrel with Mary's description of the Pennsylvania policy as successful but suggest that New England's system may have worked better than she suggests." I'm not sure how the recent dispute over the efficacy of bank credit has got us to the long-standing debate over colonial currency practices, but I am moved to offer, for what it's worth, an observation on this latter point: Judging from the exchange rate data reported by Roger Weiss, "The Issue of Paper Money in the American Colonies, 1720-1774," JEH (Dec, 1970, Table 2, p. 778) and by John Mccusker, Money and Exchange in Europe and America, 1600-1775, inflation "in any modern sense" was seldom a problem anywhere, though it could reach annual rates of 11% or12% in Mass. and RI during the Seven Years War and apparently in South Carolina in the 1720s--rates that would command the attention even of jaded 20th-century eyes. Nevertheless, there does seem to have been a regional difference in experience: over the half-century from 1720, Rhode Island currency depreciated against Sterling at an average annual rate of about 5% or 6%, about the same rate of depreciation achieved by Mass. currency over the 30 years from 1720. But Pennsylvania and New York currencies managed almost no such depreciation whatever over that period. For a fascinating, and I find persuasive, analysis of these differences, I recommend Ronald Michener, "Fixed Exchange Rates and the Quantity Theory in Colonial America," in the Carnegie-Rochester Conference Series on Public Policy, ed. by Karl Brunner and Allan Meltzer, vol. 27 (1987), 233-308. As Michener (and Mayhew, too) points out, Smith had something useful to say on this matter as well. Glenn Hueckel [log in to unmask]