Chapter 7 Nautiluscoin—0 to $1 Million in 60 Days

All money is a matter of belief.

—Adam Smith

“Freedom is more precious than gold.” This was the motto inscribed on the 1776 Georgia pound. When George Washington crossed the Delaware, it was unlikely that he had a pocket full of U.S. dollars. The currency of the land was the Continental currency, or Continentals, issued by the Continental Congress to pay for the Revolutionary War. When the Continental Congress issued this currency, they were not treading on virgin ground. They were, in fact, following a long history of currency issuance that began with the Massachusetts pound in 1690. Codfish bills and Connecticut and Virginia pounds all were in circulation and could be converted into the international currency of the time, which was in 1690 the Spanish milled dollar.

It was not until the National Banking Acts of 1863 and 1864 that the U.S. dollar began to act as the sole currency of the land. The 1863 Act, also known as the National Currency Act, was designed to solve the problem of inflation caused by an abundance of privately issued bank notes. The act taxed the notes issued by state and local banks and effectively made them inferior currency. Taxing private currencies eventually removed them from circulation.

The system of state and privately issued currency worked well until inevitably an economic downturn would make it too tempting to print more notes. The first 150 years of the United States is marked with many episodes ...

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