Article 1, Section 10, Clause 1

Document 2

James Madison, Notes for Speech Opposing Paper Money

1 Nov. 1786Papers 9:158--59

Agst. Paper money. Novr. 1786 Virg: Assy.

Unequal to specie.

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.