I don't think that's true.  I think Free Banking was alive and well during that time, and Jefferson-et-al had no problem with that.  They were specifically speaking out against central banking using unbacked fiat currency.  It wasn't paper money they had a problem with, even back then.  

The Creature from Jekyll Island is a must read.

fiatbad

I believe they were aware of the dangers of unbacked fiat currency. It wasn't widespread at the time, but there had been previous historical instances of it.

Undisciplined

Also, the paper money they had in mind was still paper money backed by gold/silver. I'm not sure they even conceived of the idea of totally unbacked fiat currency. It would probably blow their minds what we're doing today.

econ

Inflation: Slowly the Middle-Class Dies

Also, the paper money they had in mind was still paper money backed by gold/silver. I'm not sure they even conceived of the idea of totally unbacked fiat currency. It would probably blow their minds what we're doing today.

