Marx Smiles Down at the Global Monetary Crack-Up

In the earliest days of the Republic, the framers gave grave and solemn attention to the role of money and finance. The vast majority despised the government issuance of paper money, but noticeably did not expressly forbid the federal government from its use. In Federalist No. 44, James Madison wrote that while paper money was abhorrent, or as he said, "The loss which America has sustained since the peace, from the pestilent effects of paper money on the necessary confidence between man and man", it was rather the individual States that were to be dispelled of any appeal toward fiat:

"Had every State a right to regulate the value of its coin, there might be as many different currencies as States, and thus the intercourse among them would be impeded; retrospective alterations in its value might be made, and thus the citizens of other States be injured, and animosities be kindled among the States themselves...No one of these mischiefs is less incident to a power in the States to emit paper money, than to coin gold or silver. The power to make anything but gold and silver a tender in payment of debts, is withdrawn from the States, on the same principle with that of issuing a paper currency."From this and other works we can deduce rather easily that though the Framers were quite against paper money as a system, they did not want to abolish the possibility of its use in an emergency, such as was done during the Revolution. Looking back on the Continental dollar episode it is quite easy to see why that was the case, since it was properly viewed that using paper dollars as tender amounted to appropriation of property without fair value recompense. Money, true money, was property and not some element of finance to be figured out via mathematical table of conversion, it was a physical quantity that fell under the same laws as your house or your horse.From this and other works we can deduce rather easily that though the Framers were quite against paper money as a system, they did not want to abolish the possibility of its use in an emergency, such as was done during the Revolution. Looking back on the Continental dollar episode it is quite easy to see why that was the case, since it was properly viewed that using paper dollars as tender amounted to appropriation of property without fair value recompense. Money, true money, was property and not some element of finance to be figured out via mathematical table of conversion, it was a physical quantity that fell under the same laws as your house or your horse.

From this and other works we can deduce rather easily that though the Framers were quite against paper money as a system, they did not want to abolish the possibility of its use in an emergency, such as was done during the Revolution. Looking back on the Continental dollar episode it is quite easy to see why that was the case, since it was properly viewed that using paper dollars as tender amounted to appropriation of property without fair value recompense. Money, true money, was property and not some element of finance to be figured out via mathematical table of conversion, it was a physical quantity that fell under the same laws as your house or your horse.

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