Article 1, Section 10, Clause 1
Debate in North Carolina Ratifying Convention29 July 1788Elliot 4:183--85, 190--91
[Mr. Davie.] The Federal Convention knew that several states had large sums of paper money in circulation, and that it was an interesting property, and they were sensible that those states would never consent to its immediate destruction, or ratify any system that would have that operation. The mischief already done could not be repaired: all that could be done was, to form some limitation to this great political evil. As the paper money had become private property, and the object of numberless contracts, it could not be destroyed or intermeddled with in that situation, although its baneful tendency was obvious and undeniable. It was, however, effecting an important object to put bounds to this growing mischief. If the states had been compelled to sink the paper money instantly, the remedy might be worse than the disease. As we could not put an immediate end to it, we were content with prohibiting its future increase, looking forward to its entire extinguishment when the states that had an emission circulating should be able to call it in by a gradual redemption.
In Pennsylvania, their paper money was not a tender in discharge of private contracts. In South Carolina, their bills became eventually a tender; and in Rhode Island, New York, New Jersey, and North Carolina, the paper money was made a legal tender in all cases whatsoever. The other states were sensible that the destruction of the circulating paper would be a violation of the rights of private property, and that such a measure would render the accession of those states to the system absolutely impracticable. The injustice and pernicious tendency of this disgraceful policy were viewed with great indignation by the states which adhered to the principles of justice. In Rhode Island, the paper money had depreciated to eight for one, and a hundred per cent. with us. The people of Massachusetts and Connecticut had been great sufferers by the dishonesty of Rhode Island, and similar complaints existed against this state. This clause became in some measure a preliminary with the gentlemen who represented the other states. "You have," said they, "by your iniquitous laws and paper emissions shamefully defrauded our citizens. The Confederation prevented our compelling you to do them justice; but before we confederate with you again, you must not only agree to be honest, but put it out of your power to be otherwise." Sir, a member from Rhode Island itself could not have set his face against such language. The clause was, I believe, unanimously assented to: it has [Volume 3, Page 401] only a future aspect, and can by no means have a retrospective operation; and I trust the principles upon which the Convention proceeded will meet the approbation of every honest man.
Mr. Cabarrus. Mr. Chairman, I contend that the clause which prohibits the states from emitting bills of credit will not affect our present paper money. The clause has no retrospective view. This Constitution declares, in the most positive terms, that no ex post facto law shall be passed by the general government. Were this clause to operate retrospectively, it would clearly be ex post facto, and repugnant to the express provision of the Constitution. How, then, in the name of God, can the Constitution take our paper money away? If we have contracted for a sum of money, we ought to pay according to the nature of our contract. Every honest man will pay in specie who engaged to pay it. But if we have contracted for a sum of paper money, it must be clear to every man in this committee, that we shall pay in paper money. This is a Constitution for the future government of the United States. It does not look back. Every gentleman must be satisfied, on the least reflection, that our paper money will not be destroyed. To say that it will be destroyed, is a popular argument, but not founded in fact, in my opinion. I had my doubts, but on consideration, I am satisfied.
Mr. Bloodworth. Mr. Chairman, I beg leave to ask if the payment of sums now due be ex post facto. Will it be an ex post facto law to compel the payment of money now due in silver coin? If suit be brought in the federal court against one of our citizens, for a sum of money, will paper money be received to satisfy the judgment? I inquire for information; my mind is not yet satisfied. It has been said that we are to send our own gentlemen to represent us, and that there is not the least doubt they will put that construction on it which will be most agreeable to the people they represent. But it behoves us to consider whether they can do so if they would, when they mix with the body of Congress. The Northern States are much more populous than the Southern ones. To the north of the Susquehannah there are thirty-six representatives, and to the south of it only twenty-nine. They will always outvote us. Sir, we ought to be particular in adopting a Constitution which may destroy our currency, when it is to be the supreme law of the land, and prohibits the emission of paper money. I am not, for my own part, for giving an indefinite power. Gentlemen of the best abilities differ in the construction of the Constitution. The members of Congress will differ too. Human nature is fallible. I am not for throwing ourselves out of the Union; but we ought to be cautious by proposing amendments. The majority in several great adopting states was very trifling. Several of them have proposed amendments, but not in the mode most satisfactory to my mind. I hope this Convention never will adopt it till the amendments are actually obtained.
Mr. Iredell. Mr. Chairman, with respect to this clause, it cannot have the operation contended for. There is nothing in the Constitution which affects our present paper money. It prohibits, for the future, the emitting of any, but it does not interfere with the paper money now actually in circulation in several states. There is an express clause which protects it. It provides that there shall be no ex post facto law. This would be ex post facto, if the construction contended for were right, as has been observed by another gentleman. If a suit were brought against a man in the federal court, and execution should go against his property, I apprehend he would, under this Constitution, have a right to pay our paper money, there being nothing in the Constitution taking away the validity of it. Every individual in the United States will keep his eye watchfully over those who administer the general government, and no usurpation of power will be acquiesced in. The possibility of usurping powers ought not to be objected against it. Abuse may happen in any government. The only resource against usurpation is the inherent right of the people to prevent its exercise. This is the case in all free governments in the world. The people will resist if the government usurp powers not delegated to it. We must run the risk of abuse. We must take care to give no more power than is necessary.
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Mr. J. Galloway. Mr. Chairman, I should make no objection to this clause were the powers granted by the Constitution sufficiently defined; for I am clearly of opinion that it is absolutely necessary for every government, and especially for a general government, that its laws should be the supreme law of the land. But I hope the gentlemen of the committee will advert to the 10th section of the 1st article. This is a negative which the Constitution of our own state does not impose upon us. I wish the committee to attend to that part of it which provides that no state shall pass any law which will impair the obligation of contracts. Our public securities are at a low ebb, and have been so for many years. We well know that this country has taken those securities as specie. This hangs over our heads as a contract. There is a million and a half in circulation at least. That clause of the Constitution may compel us to make good the nominal value of these securities. I trust this country never will leave it to the hands of the general government to redeem the securities which they have already given. Should this be the case, the consequence will be, that they will be purchased by speculators, when the citizens will part with them, perhaps for a very trifling consideration. Those speculators will look at the Constitution, and see that they will be paid in gold and silver. They will buy them at a half-crown in the pound, and get the full nominal value for them in gold and silver. I therefore wish the committee to consider whether North Carolina can redeem those securities in the manner most agreeable to her citizens, and justifiable to the world, if this Constitution be adopted.
Mr. Davie. Mr. Chairman, I believe neither the 10th section, cited by the gentleman, nor any other part of the Constitution, has vested the general government with power to interfere with the public securities of any state. I will venture to say that the last thing which the general government will attempt to do will be this. They have nothing to do with it. The clause refers merely to contracts between individuals. That section is the best in the Constitution. It is founded on the strongest principles of justice. It is a section, in short, which I thought would have endeared [Volume 3, Page 402] the Constitution to this country. When the worthy gentleman comes to consider, he will find that the general government cannot possibly interfere with such securities. How can it? It has no negative clause to that effect. Where is there a negative clause, operating negatively on the states themselves? It cannot operate retrospectively, for this would be repugnant to its own express provisions. It will be left to ourselves to redeem them as we please. We wished we could put it on the shoulders of Congress, but could not. Securities may be higher, but never less. I conceive, sir, that this is a very plain case, and that it must appear perfectly clear to the committee that the gentleman's alarms are groundless.
The Founders' Constitution
Volume 3, Article 1, Section 10, Clause 1, Document 9
The University of Chicago Press
Elliot, Jonathan, ed. The Debates in the Several State Conventions on the Adoption of the Federal Constitution as Recommended by the General Convention at Philadelphia in 1787. . . . 5 vols. 2d ed. 1888. Reprint. New York: Burt Franklin, n.d.