the Background to the Background to Philad In essence, the commercial elite principally bore the burden of generating hard species, or making do without it. It was the commercial elite more than any other sector that had to reconcile the irreconcilable: British mercantile policy with colonial economic growth and personal profit. For the most part they ignored the Navigation Laws, and struck their deals with ample “greasing’s of the palm” of their trading partners abroad. The implicit Devils’ bargain, smuggling (and the lack of enforcement of Navigation Laws), became the key source of capital (hard and soft), and a meaningful generator of private (and oft-times public) revenues. Previous to the French and Indian War, these backdoor and under the table practices were built into the British colonial system.

It would be manageable until 1765 when to this burden was added “taxation without representation”, along with a threatened crackdown on smuggling–potentially ending the previous lack of British enforcement of its Navigation Laws. Mercantilism was a first stop along the developed world’s route to modernity—the endpoint, unknown at the time, being a mid-nineteenth century urban industrial-finance capitalist economic base.

Mercantilism, I suspect, casts a rather dark shadow on most readers thinking about the ear. It is associated closely and correctly with the slave trade, and the system has acquired a modern association with colonial exploitation. Globalists (free trade advocates), of course, chortle (as only globalists can) at the rather primitive nationalistic, closed economic system, often warlike, behavior that seemed to regularly erupted during the period it was around. It is regarded, somewhat correctly, as a major factor in the thirteen colonies drift to Independence and Revolution.

Mercantilism, British trade policy, and the frustration of getting listened to in the London colonial bureaucracy and Parliament did play a major role in sharpening the gap between the colonial citizen and British rule over the colonies—but it did not affect the various developing classes-occupations-cultures equally. It affected artisans and workers differently, and to less degree than it affected that class square in the path of mercantilism: the export and commercial entrepreneurs. That will be an important theme in this module.


And so, as far as the American commercial elite was concerned, we can see how things would change in 1765. As we shall see, things were a wee bit more complicated for the “populist masses” of colonial America, however. More on that in later modules.

Contrasting this was an emerging democracy in the thirteen colonies that, especially in large port cities, was on the cutting edge of democratic and civil rights the typical Englishman, and no Scot, Irish of Welsh resident could quite match. The mismatch did enter into English-British colonial policy. The Privy Council and the Board of Trade were sensitive to letting things get out of hand in America. Paper money issuance and conformity to British trading regulations, support in the war effort were all expectations that were oft-times frustrated by events in the thirteen colonies. Pennsylvania and Quakers were not shrinking violets in the garden of frustrated colonial expectations, and London’s willingness to tolerate a failed Proprietary government in Philadelphia often had their limits–especially in wartime.

A history that concentrates upon economic development is necessarily drawn to select case studies and examples that relate to that policy area. The argument advanced in this history is that economic development, if it is not the most helpful policy area to explain how our policy systems, economic bases, and even politics and political developed evolved from our earliest days to the present. I ground my assertion, and it is nothing more than that, that economic development is so central to almost all policy area economic development is extraordinarily inclusive, to the point of eclecticism. Sooner or later each policy area becomes relevant to economic development. If “follow the money, stupid” has any utility than economic development is an excellent perspective to outline and assess state and local history and policy.

That perspective is, of course, arguable, but most readers would grant a fallback argument: that economic development perspective culls out different relationships and different key dynamics-events that contrast with more conventional civil liberties, government structures, partisan realignments or class relationships thus opening up new doors to what actually happened “back then” and suggesting new ideas of why the future evolved as it did. In this module we start with a case study of Pennsylvania’s 1722 Currency Act that among its many virtues draws together many of the themes and topics we have discussed thus far–but equally important, more so,  introduces the reader to relationships and a topic area that is central to economic development, but also to future dynamics and events.

For those of you still seriously considering skipping this module, as my mother would say, read on “it’s good for you”, followed by a whack to the back of the head. If you want to understand how we became a capitalist nation, how capitalism was installed, i.e. institutionalized in colonial America, the issue of what kind of currency a province/state should have is about as fundamental–and political–as one can get. The finance, lending, and fiscal system of a province or colony is dependent upon the nature of its currency–and presumably serves the interests of those who approved it. The simple answer to the question of how one can pay one’s taxes–with what currency–can spark a rebellion. It did several times in Pennsylvania, one of which you have heard about: the Whiskey Rebellion (I could have said the Boston Tea Party). I also could assert it is required reading for those who want to see “Hamilton”, the play. So read on: it’s good for you!

What we describe below (after our necessary context and conceptual diversions) is Pennsylvania’s currency reform of 1722. It was a product of the Probate period and thereby reflects the hyper fragmented and polarized clash of Proprietor and Quaker factions–combined with Board of Trade colonial policies, and the realities created by the ever growing Pennsylvania economy and population. As a sort of last thought, we will conclude with what is our principal take away for the reader: policy system institutionalization, a fundamental core strategy of in this case state/provincial-building. Institutionalization is a consistent and important topic in modules and chapters to come. Through institutionalization we will see political culture, and the legacy of the past find its unique Pennsylvania way into the contemporary world.


Hard or Paper Specie: that is the question

It’s not complicated. In 1722 the distinction in currency is whether it was “hard”, usually that meant a coin that was minted from a precise weight of gold, silver, or copper. Hard currency is necessarily limited to the amount of precious metals available to mint coins. Without gold you cannot mint gold coins. The law of supply and demand sets the price for what a coin will purchase. A few coppers will buy a beer, gold or silver can buy you some more expensive stuff, including a mortgage for your farm, or inventory for your business. The trouble with hard currency coins is that there isn’t enough of the stuff around in the wilderness of Pennsylvania. British mercantilist trade policy discouraged the flow of hard currency outside of the British Isles, and required payment for stuff coming from the British Isles ultimately by hard currency– or a loan that could be paid off only in hard currency.

The reader might gather from this that the use of paper money was tied very closely to lending–credit. The idea was for government to issue, i.e. print, its own colony’ paper money which would be the colony’s currency in lieu of hard specie. Who would get the loan, for what purposes, and for what terms and conditions would be critical factors as to who would benefit from this cheap money. Almost always, the reader will discover it was meant to be accessed by those on the lower economic scale, the agricultural worker (household farmer) or the startup or young business financing, or for debt repayment. The upper classes, or the wealthy, who often made some of their wealth by lending, did not need cheap money in that whatever hard specie was around, they could usually access it. Whoever wound up getting this government issued debt–deficit debt by the way because either government itself took out a loan, conducted a public lottery (more on that in later modules) or just printed it fiat money. This is public lending for economic development, intended to stimulate business growth, and in the colonial period, to stimulate the chief sector of the economy: agriculture through land sales and mortgages. Depending on who got the loan/credit, paper money could serve Mainstream ED or Community Development purposes.

Paper money on the other hand can be made in considerable volume in that all you need is paper–and that comes from trees and everybody since the ancient Egyptians knows how to make paper. By 1722 they even have printing presses–in fact a central player in this case study made his living with Philadelphia printing presses. I suspect you can see the appeal with paper already: you can print as much of it as you have paper, it is cheaper money and there is more of it around. If you need more money, just print some more–just as modern monetary theory says. Of course is there is too much paper money, chasing too few goods and services, they call it inflation, and in an inflationary period you need a wheelbarrow to use it.

BTW, there is a third alternative. In fact that was the one most people used: barter. If I want my neighbor’s horse, I can trade him for it by giving him my two cats-if he demands more, he can have the feral colony in my backyard. You can barter your labor if you have a mind to–that’s called indenture. Liquor is a great currency, but it is so heavy and one tends to stumble and fall if one lightens the load. Barter is great, I guess, but it doesn’t travel well across distances. If you have an export economy barter really doesn’t work. Typically export requires a loan that can be paid back only with hard currency, or bartering a heck of a lot of your goods and commodities, like tobacco or wheat or fur skins that you produce. If you get a loan for a farm, how do you pay it off? In 1722 Pennsylvania about ninety percent of its households lived on a farm. If you are a German or Scots-Irish immigrant walking down a Philadelphia pier, the first place you go after the tavern is to find someone to finance your western farm. Literally thousands of households are doing this each year. By now, I suspect, the reader understands how this currency thing gets us into really intense politics. If so, how and why do politicians make a decision about hard or paper money, especially if many of them made their fortunes using hard money or lending their hard money to others.

It also raises the issue that it affects whether or not someone is willing to lend you money, i.e. offer credit at all. If their money ultimately flows from hard currency and they are paid back with cheap paper they better ask one hell of an interest rate to square the difference–either that or make a very short term loan. It seems the specter of finance capitalism and class warfare has reared their ugly heads.

Literally, this case study revolves around whether Pennsylvania will base its currency on paper dollars, or require the use of British-minted coins.

From the very beginning there had been a scarcity of specie in Pennsylvania, caused mainly by the unfavorable balance of trade with England. Although barter was resorted to in the 1680’s and 1690’s, it was inadequate to the problem. Another expedient used at that time was raising the rate of exchange on the currency to draw money into the colony, but the Assembly’s activity was blocked by a royal proclamation in 1704, fixing the rate of foreign coins [implemented by the master of mint, Isaac Newton–the guy who sat under a tree and was hit by a falling apple], a move confirmed by Parliament four years later. Complaints about the dearth of money in circulation increased with the arrival of immigrants who made the problem more acute, leading to a third solution [in 1722]: paper money [99] Joseph E. Illick, Colonial Pennsylvania, a History (Charles Scribner’s Sons, 1976), p.202.


Pennsylvania’s New Deal Paper Money to Get Out of Depression

In 1722 Pennsylvania was in a depression-recession. That the depression was of Pennsylvania’s doing is, of course, not the case. You could blame the stock market, as we do for the 1929 Great Depression, and you know what, you could do the same for 1722. In September 1720 the English equivalent of our contemporary stock market collapsed. The Dutch market had doubled in weeks, new investors were piling in by the day, and life savings poured in for a quick buck. The newspapers, relatively new on the scene, covered it, widow’s poured in their life savings, and banks and lenders offered cheap loans for a 1720 version of margin lending. The Tesla, Netflix or Zoom of the day was the South Sea Co. By September it was up by 650% for the year–two other hot stocks crested at 1343% and 4220%. Over three weeks in September, South Sea lost 96% of its value, and the market as a whole, about 86%. The South Sea bubble had burst. Isaac Newton our master of the British mint lost almost his life savings, King George I lost more than his fair share, so did poet Alexander Pope.

South Sea Co, a British joint stock corporation, got its start as a financier of the Spanish African slave trade to the English colonies–by 1720’s the company had moved on to speculation in British war debt from the War of Spanish Succession–Parliament joined in so solve its fiscal problems–the idea was for the company to buy the debt, and through stock English investors would convert this debt into equity in the corporation. Sounds like Fannie Mae, but oh well it didn’t work, and by 1722 Pennsylvania was in depression, a financial depression, where lenders went under, and credit for business, personal loans, and land sales mortgages (the housing market) were crushed, and lending, a hard specie, venture was also crushed. Hard specie was always in short supply in the American colonies–and now booming Philadelphia and Pennsylvania got caught in a huge credit squeeze.

That didn’t stop immigration and so thousands of German and Scots-Irish were arriving, and looking for loans to pay off their travel costs to avoid indenture contracts. They also need loans to finance their hoped-for purchase of land or business startup. Immigrants were on the bottom, most hard-hit group, but as the reader can imaging the merchant community, and in debt large landowners were also hit hard, relatively speaking. There were no banks, as we know them today, in Philadelphia and Pennsylvania.

As the reader shall discover from future modules, depression brings out the economic development strategies as the most logical solution for business revitalization. Not infrequently depression encourages economic development innovation. In 1722 Pennsylvania this inevitably meant institutionalization–creating a fundamental prerequisite institution to serve as the platform or the vehicle for a huge economic development initiative-strategy. The institution to be created was a Pennsylvania-based money supply to finance credit: Pennsylvania-issued paper money. Paper money, the reader will remember is “cheap money”, and is meant to spur consumer spending, business investment and inventory purchase, even debt repayment. Lord Keynes of Keynesian economics fame would have approved this strategy.

But, as you might expect, the Herbert Hoovers of the 1720’s were unconvinced, and the fear was lending cheap money to the “Mob” was a loan that would never be repaid–not to mention that it required governmental activism and entry into private markets–never a good thing. The use of Pennsylvania-issued paper money was hugely divisive, polarizing, and activated not a small dose of class war. More than anything, it threatened the Penn Proprietary land-lending and sales enterprise which was the bottom line of their financial solution to their own debt problems. If previous buyers of Penn-sold land paid their hard specie loans back in cheap dollars, or future sales were paid with such funds, the Penn Proprietary fiscal bottom line would be whacked. A good deal of the Philadelphia merchant and shipping community were essentially in the same “hard place”–and from their point of view paper money made the depression worse, and on top of that mortgaged the future–literally.

Enter our friends, the Pennsylvania General Assembly, who predictably, were prone to take the other point of view. If the Penn Proprietary were in control of the Executive Branch, it could, and probably would, have stopped any antics (to be described shortly) of the Legislature–but they were not in charge.  Our rogue Deputy Governor Keith who took, for his own reasons, the side of the populist lower classes, the Mob, pressed hard for the paper money solution to the Depression and the trigger for future economic growth.

In 1723 Logan wrote that the last two elections were ‘very mobbish and carried by a levelling spirit’. The governor [Keith] fell in with this [leveling spirit] and in his speeches began to draw distinctions ‘to the disadvantage of those he was pleased to term the great rich or knowing’ … he was continually appealing to the assembly and to the common people behind it as the element in the constitution upon which he chiefly relied [i.e. the Assembly not the Proprietor or his faction] and with which he meant to keep on the best of terms … his attitude suggested something in the nature of a plebiscite against the proprietary interest [99] Herbert L. Osgood, the American Colonies in the Eighteenth Century, Vol. II (Peter Smith, 1958), p. 547.

Logan, and the Philadelphia Municipal Corporation on the other side of the issue was livid, as were the Penns who were now finessed by the rogue appointed, now in alliance with the Legislature. The latter lacked the votes to stop whatever the Legislature and Keith conjured up. So the Penn’s used the media, printed pamphlets, and tried to mobilize the city’s newspapers to push alternative solutions (one was to fund distillery startups and liquor production to use as a “bartering” currency), or in the worst case to keep the amount of paper money at the lowest possible amount, and at more responsible terms and conditions. The Penns actually argued that if paper money and government lending was to be adopted, it should be in low volume, limited duration, high interest rate, and mostly should be used t pay off provincial debt and build a prison and workhouse for the poor. [99] Joseph Dorfman, the Economic Mind in American Civilization, 1606-1865, Vol. One (the Viking Press, 1966), pp. 168-170. You could imagine this kind of policy-making mess today–but keep in mind, this is, as I write this module, three hundred years ago.

There were alternatives proposed to use of paper money and Pennsylvania government cheap money loans, actually lots of them, but none got serious traction on the policy agenda of the Legislature. Paper money in the colonies, however, was not new–as it was for Pennsylvania. Other colonies had ventured with controversy into the paper money mill, Massachusetts and especially New York, had ventured down that path in the previous decade or so; New York in particular was regarded as a great success. Governor Keith in particular justified his position on his perception of New York’s use of paper money to promote its economic growth. (There is a small literature in past years of diffusion of economic development innovation that was shocked to discover that states “copied” or were inspired by the innovations of another state (urban renewal and enterprise zones especially). Well …, in the first decades of the eighteenth century diffusion across colonies was already in vogue).

So in 1722, the Legislature did the opposite of Penn’s solution, and approved a large sum (15,000 pounds), lower interest (5-6%), long term (8 years) repayable in equal annual installments. The floor of the loan was 12 pounds and not more than 100–very consumer friendly. The loans could be secured by the purchase of land/real estate of two to three times the principal loaned–very friendly. A provincial loan office opened up, the Three Lower Three County legislature approved issuance of its own 5,000 pound currency/loan fund. By the end of 1723 the provincial legislature approved a second funding of an additional 30,000 pounds (twice the original amount). At that time the currency notes were authorized to serve as legal currency for Pennsylvania use.

The reaction to all this currency/loan institutionalization by the Board of Trade was negative. They put immediate pressure on Mrs. Penn to reverse the Legislative action through veto (which technically she could not do as Deputy Governor Keith’s signature vitiated any veto). Our noble Provincial Secretary Logan set off to London to convince Mrs. Penn that Keith had to go, beginning the process for her termination of Keith’s appointment. Keith had the support of the Board of Trade, and had backing from a Penn relative, Virginia’s royal governor, Alexander Spotswood.

Lacking legal authority under the Pennsylvania Frames of 1701, Mrs. Penn compromised between the Board of Trade’s outright reversal and Keith by allowing the 1722-3 legislation to go forward, but formally disallowing any further such currency/loan legislation. Keith lingered on until 1726 when he formally was terminated. Seizing the opportunity, David Lloyd, theoretically in retirement, returned to elective office and was duly elected to the Assembly speakership. Lloyd immediately seized on the perception the currency/loan legislation was remarkably successful as of 1726 that it should be extended to address a variety of economic deficiencies that stood in the path of Pennsylvania economic growth–of course a direct challenge to the Board of Trade, if not Mrs. Penn. Lloyd and his legislative leaders asserted in their welcome to the new governor that:

[Pennsylvania in 1722-3] did not have cash [hard specie] enough to carry on their domestic affairs and commerce, and that the value of land and country [hinterland] produce was brought so low by the scarcity of money and decay of trade that many families were likely to be ruined. No means, they added, were left for the support of government but an excise an impost on liquor and these fell short of meeting the public needs. Direct taxation, they claimed, had become impossible. But in the two years under the magic influence of [the credit/loan legislation] … trade revived, debtors rescued from oppression of their creditors, the value of farm products advanced. … [99] Herbert L. Osgood, the American Colonies in the Eighteenth Century, Vol. II, p. 550

The whole episode was a real kerpluff at the time, but in it one can see how the Penn sole proprietary served as a buffer for Pennsylvania, a buffer that in this instance granted Pennsylvania some leeway and allowed the province to take a major step in the direction of provincial autonomy. Not all colonies were as lucky as we shall see later on. The Legislature seized upon its success and in short order declared that Pennsylvania’s economic improvement and emergence from the Depression was the consequence of the currency/loan legislation–a position which had considerable currency in Pennsylvania public opinion. If one is a future-Keynesian the assertion has economic merit as well. Other American colonies saw it that way also, and Pennsylvania became a role model for them. To prove their point the Legislature in a 1752 report declared:

that the limited loans for a long term, on easy interest and repayable in yearly installments enabled many to acquire estates and raise families where otherwise they would have remained single and laborers for others, or left the colony. Because of the ease in acquiring land, thousands have come from Germany and Ireland, where they could never hope to rise above the tenant state. True their acquiring land keeps up the price of labor and prevents the old settlers from obtaining working hands, but the old settlers achieve a net gain in the rise of the value of their lands because of the increase in people. The Dominions of the Crown are strengthened and extended; Proprietors dispose of their wilderness territory. Best of all is the unavoidable increased demand for British manufactures [99] Joseph Dorfman, the Economic Mind in American Civilization, 1606-1865, Vol. One, p. 172

It was soon [a year later] that the legislature in contravention to the express wishes of Mrs. Penn reauthorized an extension of the 1722-3 currency notes for another eight years. Soon after the reauthorization of the currency notes, an article appeared  (1729) entitled “A Modest Inquiry into the Nature and Necessity of a Paper Currency” [99] For an extended discussion on that Pamphlet see Joseph Dorfman, the Economic Mind in American Civilization, 1606-1865, Vol. One, Chapter X). That article laid a firm case that Pennsylvania needed its own currency in order to promote economic growth and accommodate its increasing population and funding the new settlements which resulted. It also made the case that transportation infrastructure was lacking, and that enhanced currency/lending was a prerequisite for its funding. With the Modest Proposal Benjamin Franklin had entered the political ring.

The Legislature seized upon the clamor Franklin had created, prominent Philadelphia citizens had directly petitioned the Legislation for legislation, and passed new currency/loan legislation in the same year (1729) expanding the volume of currency/loan notes–again fully knowing that the Penn Proprietary, Logan, and the Board of Trade were determined to disallow it (Mrs. Penn had passed in 1728). This calling of their bluff worked; no formal disallowance followed, and from this point on the Legislature would extend and expand its currency notes as a normal, if somewhat controversial action.

The Proprietary position failed to overturn the legislative action as Mrs. Penn and William Penn’s eldest son, who appointed the new governor, passed, raising into question the legitimacy of the new governor. The 3000 mile transatlantic kerpluff that followed from the questioned legitimacy of the new governor diverted attention away from the legislation. BTW, the printer of the currency/notes was none other than Benjamin Franklin. Once again, the politics of the sole proprietorship buffered Pennsylvania from Board of Trade opposition. The Legislature had squarely confronted both the Proprietorship and the Board of Trade and somehow managed to secure its control over a hugely popular Pennsylvania currency/loan program that neither, nor much of the merchant community wanted.

Institutionalization of loan notes and its lending program secured by the purchase real estate assets cemented a very critical economic development function in the hands of the Legislature, and its Quaker Party speaker. That in time the opposition of the merchant community softened as it found opportunities in cheap Pennsylvania money should be taken for granted. That the currency note/lending strategy was also central to Pennsylvania and Philadelphia economic growth, and a boon to future immigrants more able to secure lending for their entrepreneurial yeoman farms and artisan startups also played its part.

in his Autobiography Franklin later commented that he did so to counter the stern opposition of the Proprietor and conservative merchant community. “It was well received by the common people in general; but the rich men disliked it, for it increased and strengthened the clamor for more money; and they happening to have no writers among them that were able to answer it, their opposition slackened, and the [legislation] was carried by a majority in the House. My friends, who considered I had been of some service, thought fit to reward me by employing me in printing the money; a very profitable job, and a great help to me[99] quoted in Herbert L. Osgood, the American Colonies in the Eighteenth Century, Vol. II, p. 551.

Wrap Up and Comments:

One might be persuaded to suggest this is an important example of how the Legislature (and by implication the electoral franchise that elected it) by 1720 was in the hands of a “populist” leveling spirit as it fought its battle against the Proprietary–and that its policy outcomes were tilted in that direction to favor those on the lower spectrum of Pennsylvania society–not necessarily the hard-core desperately poor, of course, but rather the aspirational agricultural and urban lower classes seeking to obtain their version of the American Dream. That this populist levelling tilt in Legislative policy-making was a feature of this particular period, the early 1720’s, and not a permanent tilt through the entire of the colonial period, should also be embraced. By the 1730’s and 1740’s this “tilt” passed into history–more on that in future modules.

What is lost in a single case study of one colony is the importance of provincial currency and associated real estate mortgage in laying the foundation for its own currency and for the purchase of its critical sector gazelle: yeoman agriculture. I count currency/credit legislation as institutionalization, for a province autonomous to a considerable degree from the colonial London Board of Trade, and attaches to domestic American legislature’s considerable core powers in developing, managing and enhancing their economic bases. The Pennsylvania currency/credit issue applies to every one of the colonies, which over different periods of time, with varying degrees of success, developed experience and some autonomy from London. That autonomy it could not stifle rankled the Board of Trade to assert on the eve of the Stamp Act that:

legal-tender bills [by any colony] cause the export of gold and silver from every colony to its ruin, ‘that prohibition has been beneficial, that every medium of trade should have an intrinsic value’ but paper can never possess it; ‘that debtors in the Assemblies, make paper money with fraudulent views; that merchants trading in America have … lost by it’; that even in the middle colonies [Pennsylvania included, of course], where the credit of the paper money has been best supported, the bills have constantly depreciated when the quantity has been increased [99] quoted in Herbert L. Osgood, the American Colonies in the Eighteenth Century, Vol. II, pp. 176-7

With the onset of the American Revolution all provinces, became independent states and as such completed their reliance on state-issued debt for currency and credit. As they did they drew from their colonial experiences–and it should be little surprise that this issue became one of paramount importance in Pennsylvania. It was this issue, among several to be sure, that motivated its state governor (of Delaware also), John Dickinson–a Founding Father of our Nation–into opposition to Great Britain’s colonial administration. He defended provincial-issued currency-credit as critical for all American colonies asserting [Dorfman’s words] that “Paper money for loans not only helps the prospective farmers, but others in distress to carry on some business when otherwise they would be crippled, for no private person would lend money on such favorable terms. From the borrowers the currency passes to other hands, increases consumption, raises the price of commodities, quickens circulation, and after communicating a vigor to all kinds of industry [velocity of money in circulation] returns in its course into the possession of the borrowers to repay them for that labor, which it may be properly said to have produced. They deliver it, according to their original contract [loan terms of repayment] in the [public] treasury, where the interest raises a fund for public uses without the imposition of taxes [99] quoted in Herbert L. Osgood, the American Colonies in the Eighteenth Century, Vol. II, p. 177.

A further irony is that the superimposition of a new Federal Government in 1789, actually 1791, of a national bank that both challenged and rewarded that fledgling state currency/banking system that was struggling to develop. In the debate that followed, one is reminded of the clash not only of cultures, but of economic classes, a reality not lost on Hamilton nor Jefferson. That the national bank triggered an almost instantaneous Pennsylvania reaction, today called the Whiskey Rebellion, demonstrates the role and importance, but also the polarization and controversy generated by this economic institution-function.

It should be no surprise to the reader than we will have more, several more, case studies of states institutionalizing their currency-credit function as it is the foundation, without which contemporary Mainstream Economic Development rests–and the trigger for mobilization of many Community Development movements and CDOs. That many MED and CD strategies and programs are, in effect, derivatives of this function, it should also be obvious that currency-credit is a central pillar of American economic development.