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Subject Area: Political Theory
Topic: The American Revolution and Constitution

SPEECH IN THE VIRGINIA HOUSE OF DELEGATES, NOVEMBER, 1786, AGAINST PAPER MONEY. 1 mad. mss. - James Madison, The Writings, vol. 2 (1783-1787) [1901]

Edition used:

The Writings of James Madison, comprising his Public Papers and his Private Correspondence, including his numerous letters and documents now for the first time printed, ed. Gaillard Hunt (New York: G.P. Putnam’s Sons, 1900). Vol. 2.

Part of: The Writings of James Madison, 9 vols.

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SPEECH IN THE VIRGINIA HOUSE OF DELEGATES, NOVEMBER, 1786, AGAINST PAPER MONEY.1mad. mss.

Unequal to Specie. 1. being redeble at future day and not bearing interest. 2. illustrated by [obliterated] 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 value which depends on the use.

Unjust. 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 & unfavourable balance of trade—& by destroying that confidence between man & man, by which resources of one may be coanded by another. Illustrated 1 by raising denomination of coin 2. increasing alloy of do. brass made as silver by the Romans according to Sallust.1 3 by changing weights & measures. 4. by case of creditors within who are debtors without the State.

Unconstitutional 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.

Antifederal. 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.

Uñecessary. 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.

Pernicious. 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 coerce—6 enrichg. collectors & sharpers—7. vitiating morals. 8. reversing end of Govt. which is to reward best & punish worst. 9. conspiring with other States to disgrace Republican Govts. in the eyes of mankind.

Objection. paper money good before the War.

Answr. 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.

[1 ]Notes on the back of a letter to Madison from Robt. Johnson, dated 23d September, 1786:

Paper Emissions
Unequal to specie.Bank notes. Stock.
Objectn.navy bills. tallies
Spanish paper Useless
Unjust either to Credts. or debtrs
1. alloy
2. Weights & measures
3. brass made for silver by Romns.
4. Case of debtrs to other States
Unconstitutional.1. property decd by bill of Rights
Antifedl.2. trial by Jury
Unnecessary.1. produce will bring specie
2. paper in Tobo. notes Warrts. &c
Hurtful1. by luxury increase, not cure the evil of scarcity of specie
2. destroy confidence public & private
3. source of dissension between States see Confedn. as to regulation of coin
4. enrich collectors, speculators &—
5. vitiate morals
6. reverse the end of Govt by punishing good Citizens & rewarding bad.
7. discourage foreign commerce &c
8. dishonor our Repub [illegible] the eyes of mankind
Examples of other States & during war
Objectn.paper good formerly
Answer.1. Not true in N. E. Va. Maryd. 12 to 20 Per Ct.
2. Confidence then
3. principles of money not then understood
Such wd not then nor now do in Europe
Advantages from rejectg. paper
1. Distinguish the State & its credit
2. draw coerce & specie
3. Not honorable [example] to other states.

—Mad. MSS.

[1 ]Shortly after Cicero’s first great speech against Catiline, Catiline’s friend, Caius Manlius, despatched deputies to the Roman general, Quintus Marcius Rex, with instructions to say, among other things: “Often have your forefathers, taking compassion on the Roman people, relieved their poverty by their decrees; and very recently, within our memory, silver was paid with brass, owing to the pressure of debt, with the approval of all good citizens.”—Sallust’s Conspiracy of Catiline, ch. 33. The payments were in pursuance of a law proposed by L. Valerius Flaccus, Consul, A. U. C. 667. Only the fourth part was paid, an as for a sestertius, and a sestertius for a denarius.