The New Palgrave Dictionary of Economics Online

The British colonies in North America experimented with legislature-issued paper monies to supplement their specie monies which were in chronic short supply. These experiments were designed to produce inside monies that, unlike specie monies, could not profitably be exported. The nature of British regulation, while leaving room for some variation, constrained the colonies to issuing fiat currencies that were typically tied to paying the future taxes and other dues levied by the issuing colonies. After some early failures, most of these experiments performed well over the quarter century before the Revolution as revealed by the presence of long-run price stability.