James Madison Quotes
it is obvious that there is only wanting to the fiscal prosperity of the Government the restoration of an uniform medium of exchange … it is essential that the nation should possess a currency of equal value, credit, and use wherever it may circulate. The Constitution has entrusted Congress exclusively with the power of creating and regulating a currency
At the time, there was no United States currency. Private banks in some of the states issued their own money. A dollar from Georgia might only be worth 75 cents in New York.
James Madison, 1751-1836, 4th President of the United States (Democratic Republican, VA), State of the Union Speech, December 3, 1816
Sourced by: Eigen's Political and Historical Quotations
America had a difficult early history with money—especially paper money which had been issued by private banks but were trusted by few. Paper money had for the first time had been issued by the Federal Government during the Civil War. Many saw it as a wartime measure but not a good practice to follow. Garfield, along with many other leaders thought that it was not constitutional for Congress to issue paper money. Others prevailed as the need for a lighter and more practical form of currency was necessitated by a growing economy. Coins for large transactions between businesses especially was very awkward when chests of coins had to be delivered to pay for cattle, produce or manufactured goods at the wholesale level.
There has always been a fear of inflation and currency debasement by governments. Since ancient times, rulers issued coins and when they were made of cheap metals like copper or iron, the ruler could mint as much as he wanted and when he did so the value went down. By using only precious metals, gold and silver, for coins, there would be a natural restraint on government. Garfield was one of those who believed that we should always have money of gold and silver. The United States would use that principle for the next century even backing its paper money with gold and silver. In the Nixon administration the United States abandoned the gold standard. Today, it is the ability of a country to produce things that maintains value of paper money which has been supplanted in many cases by electronic money.
This is the first major history of banks written in the United States.
This was a very astute prediction. At the time, the United States gold mining production was second only to South Africa and American currency was based on the gold standard which seemed to all to be permanent. Half a century later, the U. S went off the gold standard.
The alternative would have been for the colonies to borrow English money at high interest rates and use that. Or use money from private banks (which occurred later.) Many conservatives are today a little shocked that some of the American Colonies just printed money with no backing but it worked—at least at the local level. A Boston Bank for example, would take a large commission for a Bostonian to convert Pennsylvania money into Massachusetts money. So it was not a very good system for trade between colonies and International trade. But English money was used for that. The colonists pragmatically got the “best of both worlds” and paid as little interest as they needed to. This system is essentially what we use today on a national scale with no gold or silver backing of the money.
This objective finally reached its peak in the Nixon administration when the U. S. went off the gold standard. 75 Years after FDR tried to make the U. S. dollar more resilient, America had been so successful that many foreign governments having the same problem of little or no control over their currency, have pegged their currency to the U. S. dollar, thus gaining our stability.
James Madison Jr. was an American statesman, diplomat, expansionist, philosopher, and Founding Father who served as the fourth president of the United States from 1809 to 1817. He is hailed as the "Father of the Constitution" for his pivotal role in drafting and promoting the Constitution of the United States and the United States Bill of Rights. He co-wrote The Federalist Papers, co-founded the Democratic-Republican Party, and served as the fifth United States Secretary of State from 1801 to 1809.
