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PostPosted: Tue Mar 04, 2008 9:24 am 
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I'm preparing to deliver a speech to my Toastmasters club next week on the subject of Colonial and Continental Currency. Well, it's really about how protracted war and hyperinflation go hand in hand, with a cautionary message to the modern audience regarding our own situation. In any event, I invite the readers of this board to download and review the PowerPoint file I will be using, and post any comments you have here.

-Greg


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PostPosted: Tue Mar 04, 2008 6:08 pm 
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Greg,

It would be nice to know how much time you have. I tend to use about 1 slide per minute. However, my slides tend to be “denser” than yours. I presume you will verbally fill in more details between the lines.

Given the above caveats and that I am not an expert in this field, here are some comments:

Slide 1: The title “What Passes As Current Lessons Learned from Colonial Currencies.” I presume that this is the whole title. That is, the second line is not a secondary title? If so, the whole title should have the same size letters. Also, a question mark should follow the title?

I would add a slide after slide 2. This slide would take one note that is blown up and shows greater detail. I would use arrows (with text boxes) that would point to various aspects of the note, e. g. “death to counterfeiters”, maybe Franklin’s signature, his anti-counterfeit attempts using leaves, an unusual (for today) denomination, the beginning of crude vignettes, plates engraved by Paul Revere, etc. Also showing the back would be nice. I think that any audience would be interested in these 220 year old details, especially since things have not changed that much.

Slide 3: Add some dates. You also have lots of room to add the whole note in the lower left. I guess the cropped image is actually the back of a note?

Slide 4: A graph would be more illustrative than the numbers. You might need more data points between 1780 and 1790. The website http://www.measuringworth.com/ has some very nice data for these purposes. Actually between 1780 and 1790 inflation was only about 10% per year, which gives rise to the doubling between 1780 and 1790. This would not be considered hyperinflation (as seen in Germany, Hungary, Yugoslavia, South America, etc.). I don’t think that even between 1790 and 1792 there was hyperinflation, that is, exponential growth. I think that the continentals were just demonetized after the US treasury redemption from 1790 to 1793. Again you would need more data. A graph would show this very convincingly.

I also thought that the Continentals became essentially worthless in 1781 and not in 1790. The website http://lynncoins.com/continental_currency.htm has some interesting tables. In 1781 the value fell to $500 continentals to one silver dollar. This shows non-monotonic behavior between 1780 and 1790. Speculators came in during the 1780’s and were then able to redeem continentals at $100 for $1 in silver or gold between 1790 and 1793.

As an aside, the Germans (and others) actually continued to issue bank notes during their hyperinflation period. The note denominations changed by many orders of magnitude. However, for the Continental currency the highest note issued in May 1875 was $30 whereas the highest in 1779 was only $80. This again shows the doubling effect in the decade of the late 1770’s.

Another way to look at this is to look at the money supply. Before the revolution, there were about $12 M Dollars in the Colonies. In July of 1775, the Continental currency added $2 M and by the end of 1775 about $6 M. This is a 50% increase in the available supply. By the end of 1779, the money supply was about ~$250 M, a factor of ~ 20 higher than at the beginning of the 1775. This is close to the factor of 7 from your data. I believe that the states also issued another ~$200 M during the late 1780’s. This was to help pay for the Continental debt.

By the way, Wikipedia (the source of all modern knowledge), defines hyperinflation as greater than 50% per month, which compounds to about a factor of 100 in one year! This is much faster than the devaluation of the Continentals.

Slide 5: I believe that after the war the national debt was paid. A phrase about Hamilton and how he handled this with the central banking system might be in order. See for example: http://www.americanheritage.com/article ... rint.shtml Later Jackson’s monetary policy (against Biddle and the central bank) caused the Panic of 1837. This then gave rise to the beautiful banknotes of the 1840’s to 1860’s that you and I like so much.

Slide 6: I would use the $10 note with Hamilton’s picture since he really was the “founder” of our centrally based monetary system.

You say, “protracted war and hyperinflation go hand in hand. If you look at the true hyperinflations that occurred around the world, war is a player many times but not always. Even Germany’s hyperinflation was partially caused by reparation payments after the 1st World War.

I guess I am not going to comment on the parallels with today’s political/monetary situation.

Again, I am not certain whom your audience is, so take my comments with a grain of salt.

Good Luck and tell us how it went!

Bernie

PS The login problem has not been solved.


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PostPosted: Tue Mar 04, 2008 7:03 pm 
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Thanks for the comments, Bernie. I'll try to digest them before responding.

To your question, the audience is a small group of people whose main gaol for attending the meeting is to improve their public speaking skills. I'm a fairly advanced member of the group, so they'll be watching my style more than paying attention to the substance of the speech.

As for your login problem, thanks for the feedback. One thing... never use the BACK button... use instead forward links, such as the Board Index link at the bottom of each page. Going BACK (especially after posting a message) has the tendency to cause problems. But other than that, going BACK when simply browsing should not cause a problem... but I still make it a point to move forward instead of backward.


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PostPosted: Mon Mar 10, 2008 3:45 pm 
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Bernie,

I have incorporated some of your feedback into the presentation. Thanks for the comments.

In answer to your question, I have 8 - 10 minutes, and this crowd has no numismatists in it. They don't even know what that word means. Typically I spend 3 minutes per slide, but for this presentation I'll keep the babble down and squeeze it down to 2 minutes per slide. Suffice it to say there isn't much time for interesting asides. I pretty much have to get to the point and get done.

So I'll stick with the five slides I have and not try to expand this to an lecture on numismatics or banking. Difficult for me, since I'm a natural born pedant. :)

- Greg


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