Debate over Paper Money
"Mr. Ellsworth 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 mind and had excited the disgust of all the respectable part of America….Paper money can in no case be necessary….The power may do harm, never good."
-James Madison in his Notes on the Convention
The Convention devoted the day to Article VII of the Committee of Detail report dealing with the powers to be given Congress, starting with Section 1 giving Congress power "to lay and collect taxes, duties, imposts and excises."
Mason (VA) urged a ban on taxing exports, and proposed an amendment to that end. Morris (PA) considered such a ban inadmissible. It was then postponed until Article VII, Section 4 was considered. The motion on the power to tax passed.
The powers to coin money, regulate foreign coin, and fix the standard of weights and measures passed without debate. A motion to add "and post roads" to the power to establish post offices was passed.
Also passed with no debate was a clause which played a vital part in the expansion of Congressional authority in the twentieth century: to regulate commerce with foreign nations and among the several states.
Next came "to borrow money and emit bills on the credit of the United States." This motion touched nerves. Morris moved to strike the "emit bills" part - if the U.S. had good credit, bills wouldn't be needed; if it didn't, bills would be unjust and useless. Butler (SC) seconded. Gorham (MA), Ellsworth (CT), Wilson, Langdon (NH), and Read (DEL) supported Morris; Madison suggested prohibiting acts making bills a legal tender. Mason and Randolph hated paper money, but felt Congress needed this power, the former observing "that the late war could not have been carried on, had such a prohibition existed." Mercer defended both the original wording and paper money. The move to strike passed.