I'm going to try this again with a better title.

I recently learned that before the right to do so was taken away from them, American colonial assemblies were financing expenditures by printing their own banknotes in their own currencies. There was a face value conversion to British pounds sterling that the colony would honor at tax time, but every time a series of notes was issued, they inflated and ultimately annoyed British holders of American debt.

Coming from the era of central banks, the whole idea of random assemblies just deciding to start printing their own currency seems wild, like Boulder city council deciding they can finance more open space purchases if only they print enough Boulder Bucks and call them legal tender. I'd be interested in any discussion on the subject, but questions that immediately come to mind are:

1. Where did this sort of monetary policy originate?

2. It seems that being redeemable at face value for a public debt everyone incurs (taxes) would act as a check on inflation unless they were habitually printing more than their revenue. Do we know how much they were putting into circulation?

3. Why wasn't Britain financing these wars etc. that the colonial assemblies printed the notes to pay for? How much of a factor was the restriction on printing money in the build up to the revolution?