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This essay, written around 1779, challenges the simple quantity theory of money. From the perspective of the paper money issued to pay for America’s Revolutionary War—bills of credit, or continentals—the essay rejects the idea that the value of money is determined by the number of pieces of paper issued. That idea ignores the fact that an individual nation is just a small part of the world economy. More relevant than quantity, the essay argues, are two other features: the date the government promises to exchange the pieces of paper for specie and the credibility of that promise.

This essay originally appeared in a 1791 Philadelphia newspaper. The version reprinted in this journal is the edited and annotated version from The Papers of James Madison (Chicago: University of Chicago Press, 1962). It is reprinted with the permission of the University of Chicago Press.