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consequences, spread themselves among all descriptions of people. But as soon as hostilities between Great Britain and America were suspended, the scene was changed. The bills emitted by congress had long before ceased to circulate; and the specie of the country was soon drained off to pay for foreign goods, the importations of which exceeded all calculation. Within two years from the close of the war, a scarcity of money was the general cry. The merchants found it impossible to collect their debts, and make punctual remittances to their creditors in Great Britain; and the consumers were driven to the necessity of retrenching their superfluities in living, and of return*#. their ancient habits of industry and economy. he change was, however, progressive and slow. In many of the states which suffered by the numerous debts they had contracted, and by the distresses of war, the people called aloud for emissions of paper bills to supply the deficiency of a medium. But the advantages of specie as a medium of commerce, especially as an article of remittance to London, soon made a difference of ten per cent. between the bills of credit, and specie. This difference may be considered rather as an appreciation of gold and silver, than a depreciation of paper; but its effects, in a commercial state, must be highly prejudicial. It opens the door to frauds of all kinds; and frauds are usually practised on the honest and unsuspecting, especially upon all classes of labourers. North Carolina, South Carolina, and Georgia, had recourse to the same wretched expedient to supply themselves with money; not reflecting that industry, frogality, and good commercial laws are the only means of turning the balance of trade in favour of a country, and that this balance is the only permanent source of solid wealth and ready money. But the bills they emitted shared a worse fate than those of Pennsylvania; they expelled almost all the circulating cash from the states; they lost a great part of their nominal value, they impoverished the merchants, and embarrassed the planters. The state of Virginia, with more prudence, never sanctioned the practice of issuing bills; but allowed the inhabitants to cut dollars, and smaller pieces of silver, in order to prevent it from leaving the state. This permicious practice prevailed also in Georgia." • A dollar was usually cut in five pieces, and each possed for a quarter; so that Maryland escaped the calamity of a paper currency. A bill for the emission of bills of credit was brought forward by the house of representatives; but it was rejected by the good sense of the senate. The opposition of the other house was not only violent, but threatened the most serious consequences to the state; the question was at length submitted to the people, who decided in favour of the senate. New Jersey, from its situation between the two great commercial cities of Philadelphia and New York, has a continual drain upon its specie. This state also issued a large sum in bills of credit, which served, indeed, to pay the interest of the public debt; but the currency suffered a vast depreciation as in other states. Rhode island exhibited a sad example of that total want of principle which always succeeds to a neglect of moral duties. Anxious that the state should abound with money, the legislature passed an act for issuing bills to the amount of £100,000 sterling. This iniquitous law was firmly opposed by many of the most virtuous and respectable characters in the state; but their opposition only produced more violent measures on the part of the assembly, who, to the amazement of all honest men, passed another act, enforcing the circulation of these bills, by making them a legal tender in all debts, and obliging every creditor to accept them in payment, or forfeit his demand. But the state was at that time governed by a faction. During the rage among the people for paper money, a number of noisy ignorant men were elected into the legislature from the smaller towns; and they not only made bad laws to suit their own base purposes, but appointed equally corrupt men to fill the judicial and executive departments. The result of all this was, the total loss of confidence, the state thrown into confusion. at home, and held in detestation abroad. Massachusetts had the good fortune, amidst her political calamities, to prevent an emission of bills of credit. New Hampshire made no paper; but in the distresses which followed her loss of business after the war, the legislature made horses, lumber, and most articles of produce, a legal tender in the fulfilment of contracts. It is doubtless unjust to oblige a creditor to receive any thing for his debt, which he had not in contemplation at the time of the contract. But, as the commodities which were to be a tender by the law of New Hampshire, were of an intrinsic value, bearing some proportion to the amount of the debt, the injustice of the law was less ? A
the person who cut it gained a quarter, or rather a fifth. Therefore, should that silver be re-coined, the state must lose a fisth.
flagrant, than that which enforced the tender of paper in Rhode island. Indeed, a similar law prevailed for some time in Massachusetts; and in Connecticut it is a standing law, that a creditor shall take land on an execution, at a price to be fixed by three indifferent freeholders, provided no other means of payment shall appear to satisfy the demand. In a state that has but little foreign commeree, and little money in circulation, such a law may not only be tolerable, but, if people are satisfied with it, may produce good effects. It must not, however, be omitted, that while the most flourishing commercial states introduced a paper medium, to the great injury of honest men, a bill for an emission of paper in Connecticut, where there is very little specie, could never command more than one-eighth of the votes of the legislature. The movers of the bill have hardly escaped ridicule ; so generally is the measure reprobated as a source of frauds and public mischief. The legislature of New York, a state that had the least necessity and apology for making paper money, as her commercial advantages always furnish her with specie sufficient for a medium, issued a large sum in bills of credit, which support their value better than the currency of any other state. Still the paper has raised the value of specie, which is always in demand for exportation; and this difference of exchange, between paper and specie, exposes commerce to most of the inconveniences resulting from a depreciated medium. Such is the history of paper money, thus far a miserable substitute for real coin, in a country where the reins of government are too weak to compel the fulfilment of public engagements, and where all confidence in public faith is totally destroyed. While the states were thus endeavouring to repair the loss of specie by empty promises, and to support their business by shadows, rather than by reality, the British ministry formed some commercial regulations that deprived them of the profits of their trade to the West Indies and to Great Britain. Heavy duties were laid upon such articles as were remitted to the London merchants for their goods; and such were the duties upon American bottoms, that the states were almost wholly deprived of the carrying trade. A prohibition, as has been mentioned, was laid upon the produce of the United States, shipped to the English West India Islands in American built vessels, and in those manned by American seamen. These restrictions fell heavy upon the eastern states, which depended much
upon ship-building for the support of their trade; and they
ports, to encourage the landing of goods within the limits
of those states; and the duties in Pennsylvania served no
who met at Annapolis, in Maryland, in the summer of 1784, to consult what measures should be taken to unite the states in some general and efficient commercial system. But as the states were not all represented, and the powers of the commissioners were, in their opinion, too limited to propose a system of regulations adequate to the purposes of government, they agreed to recommend a general convention to be held at Philadelphia the next year, with powers to frame a general plan of governument for the United States. This measure appeared to the commissioners absolutely necessary. The old confederation was .essentially defective. It was destitute of almost every principle necessary to give effect to legislation, It was defective in the article of legislating over states, instead of individuals. All history testifies that recommendations will not operate as laws, and compulsion cannot be exercised over states without violence, war, and anarchy. The confederation was also destitute of a sanction to its laws. When resolutions were passed in congress, there was no power to compel obedience by fine, by suspension of privileges, or other means. It was also destitute of a guarantee for the state governments. Had one state been invaded by its neighbour, the union was not constitutionally bound to assist in repelling the invasion, and supporting the constitution of the invaded state. The confederation was further deficient in the principle of apportioning the quotas of money to be furnished by each state; in a want of power to form commercial laws, and to raise troops for the defence and security of the union; in the equal suffrage of the states, which placed Rhode island on a footing in congress with Virginia; and to crown all the defects, we may add the want of a judiciary power, to define the laws of the union, and to reconcile the contradictory decisions of a number of independent judicatories. These and many inferior defects were obvious to the commissioners, and therefore they urged a general convention, with powers to form and offer to the consideration of the states, a system of general government that should be less exceptionable, Accordingly, in May, 1787, delegates from all the states, except Rhode island, assembled at Philadelphia, and chose general Washington for their president. After four months deliberation, in which the clashing interests of the several states appeared in all their force, the convention agreed to -recommend the plan of federal government which has been already recited. As soon as the plan of the federal constitution was sub