Table of Contents Introduction Part I FROM THE FIRST ISSUE OF BILLS OF PUBLIC CREDIT IN THE AMERICAN COLONIES TO THEIR ABOLITION BY CONNECTICUT. FROM 1690 TO 1755-6. Part II PAPER MONEY IN AMERICA FROM THE BEGINNING OF THE SEVEN YEARS' WAR TO THE CONSTITUTIONAL CONVENTION OF THE UNITED STATES. FROM 1755-6 TO MAY, 1787. Part IV THE CONSTITUTION IN THE HOUSE OF ITS GUARDIANS. Part V WHAT IS TO BE DONE? Appendix
The convention of the states for the reform of the confederacy organized itself by electing as its president George Washington, who of all the public men in his day was the most decided in convictions and the most outspoken in his words on the inherent dishonesty of irredeemable paper bills. Virginia took the lead, and Randolph, its governor, in his opening speech drew attention to paper money by reminding his hearers that the patriotic authors of the confederation did their work "in the infancy of the science of constitutions and of confederacies, when the havoc of paper money had not been foreseen." Among the delegates of Connecticut were Oliver Ellsworth, who in the federal congress had repeatedly served on committees for the reform of the federal constitution, and Roger Sherman, who in 1752 had published his conviction that good laws and paper money are irreconcilable. They agreed to insist in the convention "that the legislatures of the individual states ought not to possess a right to emit bills of credit for a currency, or in any manner to obstruct the recovery of debts, whereby the interests of foreigners, or the citizens of any other state, may be affected." The refusal of the convention to confer on the legislature of the United States the power to emit bills of credit or irredeemable paper money in any form is so complete that, according to all rules by which public documents are interpreted, it should not be treated as questionable; but as the truth in this case is of infinite importance, and has been questioned by those in authority, the wrong done to the constitution may justify a simple narrative of the facts, which ample and indisputable records establish, and which no power can alter. The journal of the convention for framing the constitution was kept under the supervision of its members, and its authority is vouched for by Washington, not only as the presiding officer of the convention, but as president of the United States in a special message to congress. By a clause in the ninth article of confederation of the United States of America, and only by that clause, the confederated states had authority "to emit bills on the credit of the United States." Of the legislature of the United States under our present constitution, the court insists that "congress is clearly authorized to emit bills of credit." But is it so? The eighth clause of the seventh article, in the first draft of the constitution, was as follows: "The legislature of the United States shall have the power to borrow money and emit bills on the credit of the United States." The journal of the convention for August 16th makes this record: "It was moved and seconded to strike out the words 'and emit bills,' "and the motion to strike out these words "passed in the affirmative. Yeas: New Hampshire, Massachusetts, Connecticut, Pennsylvania, Delaware, Virginia, North Carolina, South Carolina, Georgia--9. Nays: New Jersey, Maryland--2." So the convention, by a vote of more than four to one, refused to grant to the legislature of the United States the power "to emit bills on the credit of the United States." For the interpretation of this record, Madison, the best possible witness, has left this note: "Striking out the words cut off the pretext for a paper currency, and particularly for making the bills a tender either for public or private debts." Madison was the chief author of the new constitution. Its opponent, Luther Martin, the attorney-general of Maryland, a delegate to the federal convention and present at the debate, read to the Maryland house of delegates a paper, in which he gave his account of the purpose of the convention; his evidence agrees exactly with that of Madison, and for nearly a hundred years his fidelity as a witness was as little questioned as that of Madison. Here are two witnesses--Madison, who approved the prohibition, and Martin, who condemned it; the court pushes the testimony of Madison aside as if he had "not explained himself" sufficiently, though on the point in question his words are as clear as sunlight. The address of Martin the court rejects as a "philippic," though it contains not a word of invective against any individual, and does contain the clearly-expressed wish of its author "not to wound the feelings of any person." We have a record of what was spoken and of what was done in the federal convention kept by Madison, who took upon himself the most solemn engagement to preserve the truth for the instruction of coming generations, and whose opportunity, capacity, and integrity no one questions. His report of what was said and done on the 16th of August in the federal convention preserves the testimony of many witnesses, taken down as it were by the most capable notary. The question before the convention was: Shall power be granted to the legislature of the United States "to emit bills of credit?" The first witness is Gouverneur Morris, a man free from illusions; a delegate from the state which contained Philadelphia, then the most opulent city in the thirteen states; and as by his interests he was nearly connected with the city and state of New York, he thoroughly represented the interests of commerce. He moved to strike out the grant of power to "emit bills on the credit of the United States," saying: "If the United States have credit, such bills will be unnecessary; if they have not, will be unjust and useless." The seconder of Gouverneur Morris was Pierce Butler, a delegate from South Carolina, then the richest commercial state in the South. He remarked in the course of debate that "paper is a legal tender in no country in Europe," and he was urgent to withhold from the government of the United States the power to make it so. Madison interposed: "Will it not be sufficient to prohibit the making" the bills "a tender?" Gorham, in reply to Madison, held that no accompanying prohibition was sufficient to make it safe to grant to the legislature of the United States the power to emit bills of credit. He spoke absolutely "for striking the words out," saying: "If the words stand, they may suggest and lead to the measure." The words of Oliver Ellsworth, our third chief justice, were: "This is a favorable moment to shut and bar the door against paper money. The mischiefs of the various experiments which have been made are now fresh in the public mind, and have excited the disgust of all the respectable part of America." Randolph expressed "his antipathy to paper money;" but "could not agree to strike out the words, as he could not foresee all the occasions that might arise." James Wilson, in concurrence with Ellsworth, said: "It will have a most salutary influence on the credit of the United States to remove the possibility of paper money. This expedient can never succeed whilst its mischiefs are remembered; and, as long as it can be resorted to, it will be a bar to other resources." George Reed spoke for Delaware: "The words, if not struck out, would be as alarming as the mark of the beast in Revelation." John Langdon, of New Hampshire, conforming to the wise instructions of the towns of his state, said: "I had rather reject the whole plan than retain the three words 'and emit bills.'" Madison, agreeing with the journal of the convention, records that the grant of power to emit bills of credit was refused by a majority of more than four to one. Eleven men took part in the discussion; and every one of the eleven, whether he spoke for or against the grant of the power, Gouverneur Morris, Pierce Buffer, James Madison, Nathaniel Gorham, George Mason, John F. Mercer, Oliver Ellsworth, Edmund Randolph, James Wilson, George Reed, and John Langdon, each and all, understood the vote to be a denial to the legislature of the United States of the power to emit paper money. Take the men, one by one, and see how weighty is the witness of each individual; take them together and add the consideration that they, every one of them, unanimously support each other and are contradicted by no one, and who shall dare question their testimony? The evidence is perfect; no power to emit paper money was granted to the legislature of the United States. By refusing to the United States the power of issuing bills of credit, the victory over paper money was but half complete. The same James Wilson, who twelve days before with Oliver Ellsworth had taken a chief part in refusing to the United States the power to emit paper money, and the same Roger Sherman, who in 1752 had put forth all his energy to break up paper money in Connecticut, jointly took the lead. The first draft of the constitution had forbidden the states to emit bills of credit without the consent of the legislature of the United States; on the 28th of August they jointly offered this notion: "No state shall coin money, nor emit bills of credit, nor make anything but gold and silver coin a tender in payment of debts," making the prohibition absolute. Roger Sherman, animated by zeal for the welfare of the coming republic of countless millions, exclaims in the debate: "This is the favorable crisis for crushing paper money." His word was the will of the convention, and the states, by a majority of eight and a half against one and a half-that is, by more than five to one--forbade the states, under any circumstances, to emit bills of credit. This is the way in which our constitution "shut and barred the door against paper money" and "crushed" it. Nothing is wanting to the perfect strength of the truth, that the constitution put an end to paper money in all the United States and in all the several states; and yet a lawyer, who, but for his own refusal, would twelve years ago have become chief justice of the United States, in the line of succession from Ellsworth, further "finds in the legislative history of the country affirmative authority of the highest kind": "No suggestion of the existence of a power to make paper a legal tender," such are his words, "can be found in the legislative history of the country. Had such a power lurked in the constitution, as construed by those who ordained and administered it, we should find it so recorded. The occasion for referring to it has repeatedly arisen; and had such a power existed, it would have been recognized and acted on. It is hardly too much to say, therefore, that the uniform and universal judgment of statesmen, jurists, and lawyers has denied the constitutional right of congress to make paper a legal tender for debts to any extent whatever."
THE CONSTITUTION IN THE HOUSE OF ITS GUARDIANS.
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