The monetary system of colonial times has long fascinated scholars, primarily because of the colonies’ experience with paper money. Each colony issued its own notes, on initiation of its legislature. Perhaps the most controversial issue that historians have explored and argued about in this connection is why certain colonies had stable fiat currencies and others did not. Arguments have raged about the extent to which (1) colonial exchange rates were fixed versus floating, (2) ‘backing’ mechanisms for paper money superseded the quantity theory, and (3) specie outflows offset paper-money issues – with the three issues related.