In Order to Form a More Perfect Monetary Union

The U.S. Constitution and Monetary Powers: An Analysis of the 1787 Constitutional Convention and Constitutional Transformation of the Nation's Monetary System Emerged

“…After 1789 the U.S. experienced an increasing plethora of different banknote paper currencies. Judging by this outcome, the founding fathers did not intend to constitutionally create a single uniform national paper currency or prevent states and their banks from competing for seignorage with each other (Grubb 2003(Grubb , 1782Rolnick, Smith, and Weber). And if the founding fathers are assumed not to be stupid, or ignorant, or inexperienced in monetary matters, if they are assumed not to be fooled by the difference between binding legal tender laws and paper money emission per se, if they are assumed not to have confused war with peacetime monetary performance, and if they are assumed not to have deliberately written a deceitful Constitution-intending to ratify one meaning but execute another-then many of the explanations offered in the literature and by the delegates themselves are ruled out.…”

How long did it take the United States to become an optimal currency area?

“…But this would still leave room for some states to increase their seignorage by expanding their currencies and allowing them to circulate outside their own borders. Thus, a monetary union was viewed as a necessary prerequisite for a political union (Rolnick, Smith, and Weber, 1993).…”

Monetary Policy and the Dollar

“…Rolnick, Smith, and Weber (1993) contend that the colonies operated under flexible exchange rates and that the desire to eliminate them was the main reason why the U.S. Constitution forbade state currency emissions.…”