Article 1, Section 10, Clause 1
James Madison, Notes for Speech Opposing Paper Money
1 Nov. 1786Papers 9:158--59
Agst. Paper money. Novr. 1786 Virg: Assy.
1. being redemble at future day and not bearing
interest. 2. illustrated by tax of Bank
notes--Stock in funds--paper of Spain issued
during late war [see Neckar on finance] Navy
bills--tallies. 3. being of less use than specie
which answers externally as well as internally--must
be of less value, which depends
on the use.
1. to Creditors if a legal tender. 2 to debtors
if not legal tender, by increasing difficulty of
getting specie. This it does by increasing extravagance
& unfavorable balance of trade--&
by destroying that confidence between man
& man, by which resources of one may be
commanded by another--3 illustrated 1. by
raising denomination of coin 2. increasing alloy
of do. brass made as silver by the Romans
according to Sallust--3 by changing weights
& measures. 4. by case of Creditors within
who are dbtors without the State
1. affects Rights of property as much as taking
away equal value in land: illustrd. by case
of land pd. for down & to be conveyd. in future,
& of a law permitting conveyance to be
satisfied by conveying a part only--or other
land of inferior quality--2. affects property
without trial by Jury.
Right of regulating coin given to Congs. for
two reasons. 1. for sake of uniformity. 2. to
prevent fraud in States towards each other or
foreigners. Both these reasons hold equally as
to paper money.
1. Produce of Country will bring in specie, if
not laid out in superfluities. 2. of paper, if
necessary, eno' already in Tobo. notes, &
public securities--3. the true mode of giving
value to these, and bringing in specie is to enforce
Justice & taxes.
1. by fostering luxury, extends instead of curing
scarcity of specie--2. by disabling compliance
with requisition of Congs. 3. serving dissentions
between States. 4. destroyg.
confidence between individuals. 5. discouraging
commerce--6 enrichg collectors & sharpers--7
vitiating morals--8 reversing end of
Govt. which is to reward best & punish worst.
9. conspiring with the examples of other
States to disgrace Republican Govts. in the
eyes of mankind.
paper money good before the War.
1. not true in N. Engd. nor in Va. where exchange
rose to 60 per Ct. nor in Maryd. see
Franklyn on paper money 2. confidence then
not now--3. principles of paper credit not
then understood--Such wd. not then, nor
now succeed in Great Britain &c.
The Founders' Constitution
Volume 3, Article 1, Section 10, Clause 1, Document 2
The University of Chicago Press
The Papers of James Madison. Edited by William T. Hutchinson et al. Chicago and London: University of Chicago Press, 1962--77 (vols. 1--10); Charlottesville: University Press of Virginia, 1977--(vols. 11--).
Easy to print version.
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