r in exchange, it is worth
a dollar. It is this exchangeableness that makes it worth a dollar.
When government makes the paper dollar note a "legal tender." i.e.,
when it refuses to give you the gold dollar and makes you take its
note instead, the note soon ceases to be worth a dollar. You would
rather have the gold than the note, for the mere fact that government
refuses to give the gold shows that it is in financial difficulties.
So the note's value is sure to fall, and if the government is in
serious difficulty, it falls very far, and as it falls it takes more
of it to buy things. Prices go up. There was a time (1864) during our
Civil War when a paper dollar was worth only forty cents and a barrel
of flour cost $23. But that was nothing to the year 1780, when the
paper dollar issued by the Continental Congress was worth only a mill,
and flour was sold in Boston for $1,575 a barrel! When the different
states tried to make paper money, it made confusion worse confounded,
for the states refused to take each other's money, and this helped to
lower its value. In some states the value of the paper dollar fell in
less than a year to twelve or fifteen cents. At such times there is
always great demoralization and suffering, especially among the poorer
people; and with all the experience of the past to teach us, it may
now be held to be little less than a criminal act for a government,
under any circumstances, to make its paper notes a legal tender. The
excuse for the Continental Congress was that it was not completely a
government and seemed to have no alternative, but there is no doubt
that the paper currency damaged the country much more than the arms of
the enemy by land or sea. The feeling was so strong about it in the
Federal Convention that the prohibition came near being extended to
the national government, but the question was unfortunately left
undecided.[25]

[Footnote 24: See above, p.175]

[Footnote 25: See my _Critical Period of American History_, pp.
168-186, 273-276.]

[Sidenote: Powers denied to Congress.]
[Sidenote: Bills of attainder.]
Some express prohibitions were laid upon the national government. Duties
may be laid upon imports but not upon exports; this wise restriction was
a special concession to South. Carolina, which feared the effect of an
export duty upon rice and indigo. Duties and excises must be uniform
throughout the country, and no commercial preference can be shown to one
state over anot