An experiment with multiple currencies: the American monetary system from 1838-60

This paper finds that the combination of state regulated bank notes and deposits acting as the principal form of money and heterogeneous bank laws in the antebellum United States led to a loosely fixed exchange rate system where states were capable of exercising limited independent monetary policy. It finds that bank note circulation and deposits moved differently across the states, and based on narrative evidence, it seems states were aware of their ability to affect the money supply of their economies and that some states did in fact try to change their banking systems to do so.