Cbe Conservative *
THOUGHTS ON FINANCK 1JY TIIK
FOUNDKKS.
I.
Opinion on paper money , as expressed
in 1780 by Thomas Paine , the author
of "Common Sense. "
"The laws of a country ought to bo
the standard of equity and calculated to
impress upon the minds of the people
the moral as we'll as the legal obligations
of political justice. But tender laws , of
any kind , operate to destroy morality ,
and to dissolve by the pretence of law
what ought to be the principle of law to
support , reciprocal justice between man
and man ; and the punishment of a
member who should move for sucli a
law ought to bo death. " *
II.
The money of the constitution.
In the interpretation of words a cardi
nal rule is , to conform to usage. In
1787 every English dictionary defined
"money" as metallic coin ; and there
fore as metallic coin , it must bo inter
preted in the clause which authorizes
the legislature of the United States to
borrow money. A second cardinal rule
of interpretation is , where a word is
used in the same document more than
once , it is to bo interpreted in every in
stance as bearing the same meaning ,
unless there is an obvious and incontro
vertible reason to the contrary. The
constitution of the United States auth
orizes their legislature to coin money ;
and of the meaning of the word in that
clause , no doubt can exist.
III.
From a speech of Charles Piuckuey ,
May 20 , 1788 , in the convention of
South Carolina.
"I apprehend these general reasonings
will bo found true with respect to paper
money : That experieuco has shown ,
that in every state where it has been
practiced since the revolution , it always
carries the gold and silver out of the
country , and impoverishes it ; that while
it remains , all the foreign merchants ,
trading in America , must suffer and lose
by it ; therefore , that it must ever bo a
discouragement to commerce ; thatovery
medium of trade should have an intrin
sic value , which paper money has not ;
gold and silver are therefore the fittest
for this medium , as they are an equiva
lent , which paper can never bo ; that
debtors in the assemblies will , whenever
they can , make paper money with fraud
ulent views. That in those states where
the credit of the paper money has been
best supported , the bills have never kept
to their nominal value in circulation ;
* Thomas Paino. Dissertations on Govern
ment , &c. Phila. Fob. 18 , 1780. The Political
Writings of Thomas Paine , &c. in 2 vols. , Da
vidson's Chnrlcstown Ed , Vol. I 407.
but have constantly depreciated to n cer
tain degree. " Elliot's Debates , IV. 834.
IV.
Conduct of the great Frederick of Prus
sia.
During the seven years war , in which
Prussia under its patriot king had to
fight for existence , Frederick struck off
and circulated silver thalers of less in
trinsic value than the established coin.
For this ho did not pretend a right as a
sovereign prince ; but pleaded necessity ;
and , after peace came , he exchanged the
debased coin for others of purity and
full weight.
V.
The instruction on paper money , taught
in Russia to its grand dukes.
I have not fallen upon any Russian
opinion on paper money given so early
as 1788 ; but Henry Storch , master of
political economy , who was selected by
the imperial house to be the tutor and
instructor of the two brothers Nicholas
and Michael , of whom Nicholas became
the czar , taught them sound lessons in
political economy. These he afterwards
published , dedicating his work to them.
On paper money his instructions were :
"This deadly invention may be looked
upon as the greatest chastisement of na
tions ; and nothing but the most com
manding necessity can justify its use in
the eyes of reason. " "Abuse is almost
inseparable from the use of it. " "When
necessity orders to put an end to it , the
order comes always too late. " *
VI.
Opinion of John Adams on paper money.
Jefferson and Destutt do Tracy.
I have always thought that Sir Isaac
Newton and Mr. Locke , a hundred years
ago , at least , had scientifically and de
monstratively settled all questions of
this kind. Silver and gold are but com
modities , as much as wheat and lumber ;
the merchants who study the necessity ,
and feel out the wants of the commun
ity , can always import enough to sup
ply the necessary circulating currency ,
as they can broadcloth or sugar , the
trinkets of Birmingham and Manchester ,
or the hemp of Siberia. I am old
enough to have seen a paper currency
annihilated at a blow in Massachusetts ,
in 1750 , and a silver currency taking
its place immediately , and supplying
every necessity and every convenience.
I cannot enlarge upon this subjest ; it
it has always boon incomprehensible to
me , that a people so jealous of their lib
erty and property as the Americans ,
should so long have boriio impositions
with patience and submission , which
would have been trampled under foot in
the meanest village in Holland , or un
dergone the fate of Wood's halfpence in
Ireland. I beg leave to refer you to a work
which Mr. Jefferson has sent mo , trans
lated by himself from a French mauu-
* Storch , Economic Politiquo , II.108,109 , 412.
script of the Count Destutt do Tracy.
His chapter "of money" contains the
sentiments that I have entertained all
my lifetime. I will quote only a few
lines from the analytical tablu , piigo 21.
"It is to be desired , that coins had
never borne other names than those of
their weight , and that the arbitrary de
nominations , called moneys of account ,
as , s. , d. , etc. , had never been used.
But when these denominations are ad
mitted and employed in transactions , to
diminish the quantity of metal to which
they answer , by an alteration of the real
coins , it is to steal ; and it is a theft
which oven injures him who commits it.
A theft of greater magnitude and still
more ruinous , is the making of paper
money ; it is greater , because in this
money there is absolutely no real value ;
it is more ruinous , because , by its grad
ual depreciation during all the time of
its existence , it produces the effect
which would be produced by an infinity
of successive deteriorations of the coins.
All those iniquities are founded on the
false idea , that money is but a sign. "
Permit me to recommend this volume
to your attentive perusal.t
VII.
Extract from a speech delivered by Dan
iel Webster in the senate of the United
States , on the 21st of December , 18UG ,
on the subject of the Specie Circular.
"Most unquestionably there is no legal
tender , and there can be no legal tender ,
in this country , under the authority of
this government or any other , but gold
and silver , either the coinage of our owu
mints , or foreign coins , at rates regulated -
lated by congress. This ista constitu
tional principle , perfectly plain , and of
the very highest importance. The states
are expressly prohibited from making
anything but gold and silver a tender in
payment of debts ; and although no such
express prohibition is applied to con
gress , yet as congress has no power
granted to it , in this respect , but to coin
money and to regulate the value of for
eign coins , it clearly has no power to
substitute paper , or anything else , for
coin , as a tender in payment of debts
and in discharge of contracts. Congress
has exercised this power , fully , in both
its branches. It has coined money , and
still coins it ; it has regulated the value
of foreign coins , and still regulates their
value. The legal tender , therefore , the
constitutional standard of value , is es
tablished and cannot bo overthrown. To
overthrow it , would shake the whole
system. The constitutional tender is the
thing to bo preserved , and it ought to bo
preserved sacredly , under all circum
stances. " *
VIII.
Opinions of John Marshall.
The inflexible adversary of paper
money , detesting it with a hatred almost
f John Adams to John Taylor , of Caroline ,
Quincy , 12 March. 1810 , Life and Works , X. 875.
* Works , IV. 271.
