A History of American Currency

The author, William Graham Sumner, was the great sociologist of late 19th century America, but also a wise observer of economic conditions.

In 1874, in the midst of another debate about the future of the American monetary system, he offered this sweeping history of the calamity of paper money in the United States from the Colonial Period to the Civil War. In many ways, it is a popular history in the sense that he hoped it could be read by anyone.

What's strike here is his "Austrian" understanding of the relationship of paper money to credit cycles, inflation, and corruption. He was a firm advocate of sound money and 100% reserve banking.

His lesson was that paper currency leads to a trap: continued crisis, hyperinflation, or the restoration of sound money. This pattern has been repeated again and again. The burden of this book is to show that there is nothing good to come out of any paper money experiment, and that sound money is the only answer in a free society.

So there is profound historical interest in these pages--he was writing at a time when these issues were debated in all campaigns and classrooms--but also excellent theorizing too. Indeed, this work demonstrates that Sumner was not only a pioneering American sociologist but also one of the great American pre-Austrians of the late 19th century.