The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1837-09-12


in specie, aud which had been developed IN our own
experience as well as in the soondest theories Of po
cal economy, undoubtedly principal cause for
those rigid provisions IN the constitution connected with
the currency They restrict any State from issuing
mere bills Of credit" from making any thing tender
except gold and silver" passing any law "impair-
ing the obligation Of contracts rs well as cophne TO
Congress alone the power TO coin money" and re-
gulale the value thereof" The exercise OF this last
power, msnfesy relating only TO metallic money, APP
pears to require merely the coinage OF sufficient sup
Div at the Mint and in convenient denominations for all
necessary purposes and Of such intrinsic value as,
while preventing it from being deprecated on the one
hand, should, the other, not be so moderated as TO
it TO be too readily exported or melted down for
use in manufactures
Tho whole amount necessary for public payments
has been much misapprehended Without surplus in
the Treasury il would seldom exceed eight ten mil
lions OF dollars even if evidences Of debt or any
kind Of paper money, were receivable Like running
stream, the coin which flows in constantly flows OUT
without much accumulation; dollar helping 10 per-
FORM single year, the service OF payment and re
payment numerous times. Indeed, the people Of the
whole United States do not in sound state OF business
and prices, need over hundred and ten millions Of
an active circulating medium for all their currency,
This would be larger proportion OF currency to our
present population than the average has been from the
adoption of the constitution; and If an exclusive me-
tac currency could be deemed desirable would require
supposed to exist III the country But the present
quantity Of specie being divided pretty equally between
the banks and individuals not half Of il Is in active cir
culation and unless it becomes increased and much
equally dIused, some paper is, OF course, neces-
sary to prevent sudden revuson in prices and values,
and to supply sufficient circulating medium for the le
gitimate purposes Of the States and the people Some
paper WILL probably always be found convenient for
commercial operations Ii would therefore, be inydi
Gus, il not unauthorized, for the General Government
deprive the States Of any supposed advantage IN the
use o it, far and long they may deem proper,
or otherwise interfere with their course relation to
it, except to enforce the present constitutional prohlb
ton against issuing any bills Of credit making any
thing tender except gold and sloer. Care, however,
must be employed, incidentally, to avert far as pos
sble any evil influences which might otherwise be
ercsed over fiscal operations by the different
local policies pursued subject Of much delcacy,
hazard and difficulty,
The power which Congress may possess
to legislate, with view OF furnishing paper
currency of any kind for the ordinary uses of
the community, or of regulating, in any way,
domestic exchanges, is not entirely clear, nor
well defined Whatever may be its just ex-
tent, it seems seldom, if ever, necessary to be
used, while the States retain such wide and
undisputed authority over banking; and while
the local institutions, as well as private bank
ers, here no less than abroad, are generally SO
competent to effect exchanges. Such pow
er is not expressly conferred in the constitu-
ton, nor does it seem to be implied, unless, in
the execution of some plain grants, it may be-
come proper to be exerted on any emergency,
and without using means otherwise forbidden,
understandable, or inexpedient. sa
In regard to exchanges, it is believed that
seldom, if ever, has any government, how
ever unlimited its authority, considered it wise
to prescribe special regulations for effecting
them. Such government might well feel
empowered ito regulate commerce with TO-
reign nations" or between its own States, if it
had any but TO regulate exchanges between
individuals, would, in most cases, be justly
deemed arbitrary. On the contrary, the sound
principles Of trade seem to require as little in
reference as possible with fixing the price Of
commodities, or the mode and medium through
which they shall be interchanged. Those
principles would only yield adequate protec-
ton or security, furnish facilities appropriate
and authorized, and establish good standard
of value. Indeed, the balances of indebted
ness between different sections OF the country,
If left to work out their natural consequences
on the rate of exchanges, will usually, as they
are now doing, correct excuses in business
in any quarter, and be self-Segulators, far SUI
perior to any officious and minute legislation.
The rate merely for exchanges can seldom
exceed the expense of transporting specie be-
tween any two places and, if SURPRISING that,
the excess must arise from what government
has little power to cure-that is, from the diff
fculty in obtaining money where Indebtedness
is great, interest high, and credit impaired.
In regard to the currency which is most
suitable for public purposes, whatever may be
the authority of the General Government to
make or adopt paper one in full or in part,
it is difficult to perceive why, after having es-
tablished specie as standard, having forbid
den any thing else to be made tender, and
having succeeded in encouraging the intro
duction Of. supply of it into the country,
very ample for all fiscal purposes, it should
expressly dispense with its employment as the
most usual medium for those, purposes The
fundamental acts of Congress rs to the pay
ments for duties and lands have not made any
exceptions in its use, or provided any substi-
tutes, except the "evidences of the public
debt" Any exceptions allowed ought GER
tainly never to permit any thing, except spe-
Gle, to be paid out as a rightful tender by the
United States; and this principle has been
always strictly observed. But by construc-
tons adopted early in this department, and,
subsequently, by the charters to the two Uni
ted States Banks, as well as by an apparent
sanction in the joint resolution of 1916, diff
ferent substitutes of notes issued by those and
State banks have, at different times and under
different notifications, been permitted to be
received in payment. These, however, have
been allowed only when regarded as a clear
equivalent to specie, by being readily convert
iblc into it, and by being recommended by
some superior convenience or utility, as well
as by great security. AS specie likewise
combines safety, uniformity, general use,
sound theory, and almost universal experience
in favor Of its common employment the franz