The U.S. issuance of paper money is unconstitutional

The Federal Constitutional Convention rejected language that would have permitted paper money.

“[Paper money] as alarming as the mark of the Beast in Revelations.” Delegate Read.

Here’s the proof from the Records of the Federal Convention, where the delegates, on motion of delegate Gov’r Morris, struck the words “and emit bills of credit” from what became Article 1, Section 8, CL. 2. As originally proposed the language was “The Congress shall have power . . . to borrow money and emit bills of credit on the credit of the United States. Thus the clause ultimately became: “The Congress shall have power to borrow money and emit bills of credit on the credit of the United States.”

Bills of credit were thought by the framers as the equivalent of “paper money”. Read the following debate of August 16, 1787.


“It was moved and seconded to strike the words “and emit bills” out of the 8. clause of the 1 section of the 7 article” which passed in the affirmative. [Ayes — 9; noes — 2.]


Mr. Govr Morris moved to strike out “and emit bills on the credit of the U. States”12 — If the United States had credit such bills would be unnecessary: if they had not unjust & useless.

Mr Butler, 2ds. the motion.

Mr. Madison, will it not be sufficient to prohibit the making them a tender? This will remove the temptation to emit them with unjust views. And promissory notes in that shape may in some emergencies be best.

Mr. Govr. Morris. striking out the words will leave room still for notes of a responsible minister which will do all the good without the mischief. The Monied interest will oppose the plan of Government, if paper emissions be not prohibited.

Mr. Ghorum was for striking out, without inserting any prohibition. if the words stand they may suggest and lead to the measure.

Col Mason had doubts on the subject. Congs. he thought would not have the power unless it were expressed. Though he had a mortal hatred to paper money, yet as he could not foresee all emergences, he was unwilling to tie the hands of the Legislature. He observed that the late war could not have been carried on, had such a prohibition existed.

Mr. Ghorum- The power as far as it will be necessary or safe, is involved in that of borrowing.

Mr Mercer was a friend to paper money, though in the present state & temper of America, he should neither propose nor approve of such a measure. He was consequently opposed to a prohibition of it altogether. It will stamp suspicion on the Government to deny it a discretion on this point. It was impolitic also to excite the opposition of all those who were friends to paper money. The people of property would be sure to be on the side of the plan, and it was impolitic to purchase their further attachment with the loss of the opposite class of Citizens

Mr. Elseworth thought this a favorable moment to shut and bar the door against paper money. The mischiefs of the various experiments which had been made, were now fresh in the public mind and had excited the disgust of all the respectable part of America. By withholding the power from the new Governt. more friends of influence would be gained to it than by almost any thing else- Paper money can in no case be necessary- Give the Government credit, and other resources will offer- The power may do harm, never good.

Mr. Randolph, nothwithstanding his antipathy to paper money, could not agree to strike out the words, as he could not foresee all the occasions that might arise.

Mr Wilson. It will have a most salutary influence on the credit of the U. 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.

Mr. Butler. remarked that paper was a legal tender in no Country in Europe. He was urgent for disarming the Government of such a power.

Mr Mason was still averse to tying the hands of the Legislature altogether. If there was no example in Europe as just remarked it might be observed on the other side, that there was none in which the Government was restrained on this head.

Mr. Read, thought the words, if not struck out, would be as alarming as the mark of the Beast in Revelations.

Mr. Langdon had rather reject the whole plan than retain the three words “(and emit bills”)

On the motion for striking out

N. H. ay- Mas. ay. Ct. ay. N-J. no. Pa. ay. Del. ay. Md. no. Va. ay.* N. C- ay. S. C. ay. Geo. ay. [Ayes — 9; noes — 2.] [1]

Founding Father Quote: James Madison in FEDERALIST 44: “The extension of the prohibition to bills of credit must give pleasure to every citizen, in proportion to his love of justice and his knowledge of the true springs of public prosperity. The loss which America has sustained since the peace, from the pestilent effects of paper money on the necessary confidence between man and man, on the necessary confidence in the public councils, on the industry and morals of the people, and on the character of republican government . . . .”

Madison here was speaking of the prohibition against paper money issued by the states (Article 1, Section 10), but his commentary and the debate above show that the U.S. government has not the power to issue paper.

[1] Max Farrand, The Records of the Federal Convention of 1787, ed. Max Farrand (New Haven: Yale University Press, 1911). Vol. 2. Chapter: THURSDAY, AUGUST 16, 1787. Accessed from on 2011-07-20 @

Cross reference:

Published in: on March 25, 2012 at 1:53 pm  Leave a Comment  

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