The Need for a Circulating Medium

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Article I, section 8 of the Constitution states that Congress “shall have the power…to coin money, regulate the value thereof, and of foreign coin.” Let’s look at the historical origin of this clause.

On Tuesday August 16, 1787 this part of the Constitution was discussed and unanimously adopted with very little debate or disagreement. None of the delegates voted against the words, as written. The only discussion came over whether Congress should have the added power to “emit bills on the credit of the United States,” i.e., to print money.

According to James Madison’s notes, Governeur Morris of Pennsylvania stated that “if the United States had credit, such bills would be unnecessary: if they had not, unjust and useless.” Oliver Ellsworth of Connecticut “thought this a favorable moment to shut and bar the door against paper money… Paper money can in no case be necessary. Give the Government credit, and other resources will offer. The power may do harm, never good.” James Wilson of Pennsylvania agreed, “It will have a most salutary influence on the credit of the U. States to remove the possibility of paper money.”

John Mercer of Maryland “was a friend to paper money, though in the present state and temper of America, he should neither propose nor approve of such a measure. He was consequently opposed to a prohibition of it altogether.” James Randolph of Virginia said, “notwithstanding his antipathy to paper money, could not agree to strike out the words, as he could not foresee all the occasions which might arise.” James Mason of Virginia was “averse to tying the hands of the Legislature altogether.”

The last and fiercest words on the subject came from George Read of Delaware and John Langdon of New Hampshire. “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 a motion made by Morris, the delegates voted, by state, 9-2 to strike out the words “emit bills on the credit.” Later that day the Convention proceeded to vote on the entire text of Article I Section 8. The vote in favor was unanimous.