VII. Aug. 16. paper emissions and the perseverance of the legisla- CHAP. tive assemblies in repeating them, though well aware of all their distressing effects, and drew the inference 1787. that, were the national legislature formed and a war 15. to break out, this ruinous expedient, if not guarded against, would be again resorted to.' He moved to strike out the power to emit bills on the credit of the United States. "If the United States," said he, “have credit, such bills will be unnecessary; if they have not, they will be unjust and useless." Butler was urgent for disarming the government of such a power, and seconded the motion. It obtained the acquiescence of Madison. Mason, of Virginia, "had a mortal hatred to paper money, yet, as he could not foresee all emergencies, he was unwilling to tie the hands of the legislature. The late war could not have been carried on had such a prohibition existed." "The power," said Gorham, "as far as it will be necessary or safe, is involved in that of borrowing money." Mercer, of Maryland, was unwilling to deny to the government a discretion on this point; besides, he held it impolitic to excite the opposition to the constitution of all those who, like himself, were friends to paper money. "This," said Ellsworth, "is a favorable moment to shut and bar the door against paper money, which can in no case be necessary. Give the government credit, and other resources will offer. The power may do harm, never good." Randolph, notwith 7 Gilpin, 1344; Elliot, 435. 'Gilpin, 1845; Elliot, 435. CHAP. standing his antipathy to paper money, could not foreVII. see all the occasions that might arise.' "Paper 1787. money," said Wilson, "can never succeed while its 16. mischiefs are remembered; and, as long as it can Aug. be resorted to, it will be a bar to other resources." " "Rather than give the power," said John Langdon, of New Hampshire, "I would reject the whole plan."' With the full recollection of the need, or seeming need, of paper money in the revolution, with the menace of danger in future time of war from its prohibition, authority to issue bills of credit that should be legal-tender was refused to the general government by the vote of nine states against New Jersey and Maryland. It was Madison who decided the vote of Virginia; and he has left his testimony that "the pretext for a paper currency, and particularly for making the bills a tender, either for public or private debts, was cut off." This is the interpretation of the clause, made at the time of its adoption alike by its authors and by its opponents, accepted by all the statesmen 1 1 Gilpin, 1345; Elliot, 435. Gilpin, 1346; Elliot, 435. "By our original Articles of was the report on this system, as made by the committee of detail. When we came to this part of the report, a motion was made to strike out the words 'to emit bills of credit.' Against the motion we urged that it would be improper to deprive the congress of that power; that it would be a novelty unprecedented to establish a government which should not have such authority; that it was impossible to look forward into futurity so far as to decide that events might not happen that should render the exercise of such a power absolutely necessary; and that we doubted whether, if a war should take place, it would be possible VII. of that age, not open to dispute because too clear for CHAP. argument, and never disputed so long as any one man who took part in framing the constitution remained 1787. alive. History can not name a man who has gained enduring honor by causing the issue of paper money. Wherever such paper has been employed, it has in every case thrown upon its authors the burden of exculpation under the plea of pressing necessity. Paper money has no hold, and from its very nature can acquire no hold, on the conscience or affections of the people. It impairs all certainty of possession, and taxes none so heavily as the class who earn their scant possession by daily labor. It injures the husbandman by a twofold diminution of the exchangeable value of his harvest. It is the favorite of those who seek gain without willingness to toil; it is the deadly foe of industry. No powerful political party ever permanently rested for support on for this country to defend itself without having recourse to paper credit, in which case there would be a necessity of becoming a prey to our enemies or violating the constitution of our government; and that, considering the administration of the government would be principally in the hands of the wealthy, there could be little reason to fear an abuse of the power by an unnecessary or injurious exercise of it. But, sir, a majority of the convention, being wise beyond every event, and being willing to risk any political evil rather than admit the idea of a paper emission in any possible case, refused to trust this authority to a government in which they were lavishing the most unlimited pow- With regard to the paper money Aug. 16. CHAP. the theory that it is wise and right. No statesman VII. has been thought well of by his kind in a succeeding 1787. generation for having been its promoter.' Aug. 16. In the plan of government, concerted between the members from Connecticut, especially Sherman and Ellsworth, there was this further article: "That the legislatures of the individual states ought not to possess a right to emit bills of credit for a currency, or to make any tender laws for the payment or discharge of debts or contracts in any manner different from the agreement of the parties, or in any manner to obstruct or impede the recovery of debts, whereby the interests of foreigners or the citizens of any other state may be affected."" The committee of detail had reported: No state, without the consent of the legislature of the United 28. States, shall emit bills of credit. With a nobler and safer trust in the power of truth and right over opinion, Sherman, scorning compromise, cried out: "This is the favorable crisis for crushing paper money," and, joining Wilson, they two proposed to make the prohibition absolute. Gorham feared that the absolute prohibition would rouse the most desperate opposi tion; but four northern states and four southern This paragraph is a very feeble abstract of the avowed convictions of the great statesmen and jurists who made the constitution. Their words are homely and direct condemnation; and they come not from one party. Richard Henry Lee is as strong in his denunciation as Washington, Sherman, or Robert R. Livingston. William Paterson, of New Jersey, wrote in 1786 as follows: "An increase of paper money, es pecially if it be a tender, will destroy what little credit is left; will bewilder conscience in the mazes of dishonest speculations; will allure some and constrain others into the perpetration of knavish tricks; will turn vice into a legal virtue; and sanctify iniquity by law," etc. From the holograph of William Paterson. 2 Sherman's Life, in "Biography of the Signers," ii. 43. VII. Aug. states, Maryland being divided, New Jersey absent, CHAP. and Virginia alone in the negative, placed in the constitution these unequivocal words: "No state shall 1787. emit bills of credit." The second part of the clause, 28. "No state shall make anything but gold and silver coin a tender in payment of debts," was accepted without a dissentient state. So the adoption of the constitution is to be the end forever of paper money, whether issued by the several states or by the United States, if the constitution shall be rightly interpreted and honestly obeyed. It was ever the wish of Sherman and Ellsworth to prohibit "the discharge of debts or contracts in any manner different from the agreement of the parties." Among the aggressions made by the states on the rights of other states, Madison, in his enumeration,' names the enforced payment of debts in paper money, the enforced discharge of debts by the conveyance of land or other property, the instalment of debts, and the "occlusion" of courts. For the last two of these wrongs no remedy was as yet provided. King moved to add, as in the ordinance of congress for the establishment of new states, "a prohibition on the states to interfere in private contracts."" "This would be going too far," interposed Gouverneur Morris. "There are a thousand laws relating to bringing actions, limitations of actions, and the like, which affect contracts. The judicial power of the United States will be a protection in cases within their jurisdiction; within the state itself a majority must rule, whatever may be the mischief done among 1Madison, i. 321. Gilpin, 1443; Elliot, 485. 2 |