In US history, after Jackson disbanded the second US bank, it wasn't cities which had their own currency, but state-chartered banks during the "free banking" era of 1837–1862. These banks had a high failure rate, so weren't all trusted. If you traveled, say, to another state where people hadn't heard of your bank, then they might not accept your money, or not at face value.
Even now, take a look at the UK, which has seven different banks that can issue notes. All look different, eg, with Scottish figures on the Bank of Scotland notes. These can be used through the UK, but not all shopkeepers accept them. "English shopkeepers who are unfamiliar with them may refuse to accept Scottish or Northern Irish notes" says http://www.theguardian.com/money/2012/sep/12/can-i-spend-sco... .
That should give an idea of the problems that will occur should each city has its own currency.
The author notes the era of free banking in passing: "And as Galbraith points out, Free Banking coincided with the fastest half-century of growth in the US, 1800 to 1850, still unbeaten". Do note that 37 of those 50 years was with a central bank, and 12 years of free banking were outside of that period. That seems more coincidence than a meaningful signal.
The author writes "Bizarre as it sounds, their disagreement led to a financial-political satire, The Wonderful Wizard of Oz (1900) by L Frank Baum, which later got made into a children’s film." Note that this is one interpretation, first made by Littlefield in the 1960s. See http://www.halcyon.com/piglet/Populism.htm for some of the history of that interpretation. It may be a good interpretation, but there is little to no evidence that it was deliberate, which the author implies.
The author refers to a hypothesis from the 1970s: "Hence, Jacobs argued, all innovation happens in cities".
Note, however, that many modern innovations take place between people located in many cities. In the 1970s, telecommunications was expensive. While for most of my career I've worked with people elsewhere, as a consultant. It's bad enough taking the exchange rate hit when dealing with other countries. I wouldn't want to do that for every city as well.
Eurozone is not good currency area because it's too big, but because it does not fill the criteria for good currency area [1]. US is much better. US-Canada economic region might be optimal if divided into three[2], but it's not a big deal. United States can function fine as a single currency region.
[1] A Theory of Optimum Currency Areas (classic paper from Mundell) https://www.aeaweb.org/aer/top20/51.4.657-665.pdf
[2] Optimum Currency Areas within the US and Canada: a Data Analysis Approach http://utopia.duth.gr/~pgkogkas/duthwp/4-2012.pdf
