John Adams on Paper Money

Liberty Letters, John Adams

I have always thought that Sir Isaac Newton and Mr. Locke, a hundred years ago, at least, had scientifically and demonstratively settled all questions of this kind. Silver and gold are but commodities, as much as wheat and lumber; the merchants who study the necessity, and feel out the wants of the community, can always import enough to supply the necessary circulating currency, as they can broadcloth or sugar, the trinkets of Birmingham and Manchester, or the hemp of Siberia. I am old enough to have seen a paper currency annihilated at a blow in Massachusetts, in 1750, and a silver currency taking its place immediately, and supplying every necessity and every convenience. I cannot enlarge upon this subject; it has always been incomprehensible to me, that a people so jealous of their liberty and property as the Americans, should so long have borne impositions with patience and submission, which would have been trampled under foot in the meanest village in Holland, or undergone the fate of Wood’s halfpence in Ireland. I beg leave to refer you to a work which Mr. Jefferson has sent me, translated by himself from a French manuscript of the Count Destutt de Tracy. His chapter “of money” contains the sentiments that I have entertained all my lifetime. I will quote only a few lines from the analytical table, page 21.

“It is to be desired, that coins had never borne other names than those of their weight, and that the arbitrary denominations, called moneys of account, as L, s., d., etc., had never been used. But when these denominations are admitted and employed in transactions, to diminish the quantity of metal to which they answer, by an alteration of the real coins, it is to steal; and it is a theft which even injures him who commits it. A theft of greater magnitude and still more ruinous, is the making of paper money; it is greater, because in this money there is absolutely no real value; it is more ruinous, because, by its gradual depreciation during all the time of its existence, it produces the effect which would be produced by an infinity of successive deteriorations of the coins. All these iniquities are rounded on the false idea, that money is but a sign.”

Permit me to recommend this volume to your attentive perusal.

Source: John Adams as quoted in George Bancroft’s 1884 work: A Plea for the Constitution of the United States: Wounded in the House of its Guardians.

Liberty Letters is a project of The Moral Liberal’s, Editor in Chief, Steve Farrell. Copyright © 2012 Steve Farrell.

The Moral Liberal recommends: The Making of America: The Substance and Meaning of the Constitution