During the mid-1780s many American states facing widespread financial and social instability in the aftermath of the Revolutionary War actively managed their economies. They authorized paper money, adopted debtor-relief measures, or both. Several historians of these anti-recession measures conclude that such efforts were beneficial. But despite that, the Constitution, as contemporaries understood it, abrogated state powers to issue paper money or provide debtor relief in Article I, Section 10. During ratification, Anti-Federalists were often silent on Section 10, though there were exceptions and popular support for paper money and debtor relief probably prevented ratification in some states. Anti-Federalists did not propose a single amendment to change Section 10's key provisions. What light can this sharp disparity between widespread support for economic management and limited public opposition to Section 10 shed on Anti-Federalism and ratification? Historians have argued that Anti-Federalists muted their criticism and failed to prevent adoption of Section 10 because of Federalist process or agenda manipulation, Anti-Federalist leaders' divisions, or their self-interest. This article traces the politics of paper money before the Constitutional Convention, and argues instead that it was less popular than is often thought, could only be adopted with public creditor support in several key states, and was then subject to a public backlash. This emboldened the Constitution's drafters to adopt Section 10's broad prohibition. The Constitution's tax provisions then fractured paper money coalitions. The article's new ratification evidence shows that as a result the Anti-Federalists faced their toughest challenge in opposing Section 10.
George Van Cleve,
The Anti-Federalists’ Toughest Challenge: Paper Money, Debt Relief, and the Ratification of the Constitution, 34 J. Early Republic 529