A really fine essay on Biologos.org from Mark Noll on the history of ideas that shape our assumptions within this conversation. It is a wealth of historical information.

In the effort to build churches with forms and assumptions that fit the new American nation, most of Europe’s traditional authorities came under severe attack.  The great exception was the Bible.  Passages from Scripture had been invoked everywhere during the Revolution, though often in symbolic ways (like referring to the British Parliament as “Egypt” and George Washington as “Moses”) rather than in deciding whether the Revolution was a just war.  In the early republic, the great engine of the revival preaching that proved so successful for Methodists, Baptists, and many others was the Bible.  Scripture was preached by itinerants and by regular clergy; it was the basis for organizing churches on the frontier and maintaining stability in settled regions.  In the absence of well-developed social institutions or government structures, the King James Version of the Bible was the closest thing to a universal cultural authority.  And because the Bible was the people’s book, which all who could read might appropriate for themselves, it almost completely escaped the suspicion that fell upon the other mainstays of historical European Christianity.

It is important to restate the sequence that undergirded the attitudes that took firm hold in early American history. Conventions in biblical interpretation were not worked out in academic isolation but were agents of tremendous public power forged in the crucible of practical necessity. A democratic, populist, and literal hermeneutic was the interpretive strategy that evangelical Protestants exploited to win the new republic for Christ. The social transformation that resulted seemed to validate the evangelicals’ approach to Scripture. For reaching the unreached with the Christian message, for organizing congregations and building churches, for creating agencies to construct and reform society, reliance on the Bible alone, literally interpreted, worked wonders