the constitutionality of paper money

[dennis dujac]

doesn't this give congress the power to issue paper money?


The Constitution of the United States
Article I - The Legislative Branch
Section 8 - Powers of Congress

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

 

[The Gold Standard]

doesn't this give congress the power to issue paper money?


The Constitution of the United States
Article I - The Legislative Branch
Section 8 - Powers of Congress

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

Sure. It doesn't give Congress the authority to make it legal tender though.

 

[dennis dujac]

Sure. It doesn't give Congress the authority to make it legal tender though.

why not? it says that congress has the power to make all laws necessary and etc

 

[Acala]

1. It says coin money. At the time, "money" meant "specie" which meant precious metals. "Coin" meant stamp out disks of metal.

2. Paper currency was known as Bills of Credit (as prohibited to the States in Section 10 (1).

3. The Federal government was not specifically authorized to emit Bills of Credit and, therefore, was denied that power.

4. The Federal Government was not granted the power to establish legal tender and therefore was denied that power.

 

[Travlyr]

This is what they meant by to coin money.

Coinage Act of 1792

 

[The Gold Standard]

why not? it says that congress has the power to make all laws necessary and etc

Legal tender laws are not necessary for coining money or regulating the value of it. They are welcome to coin money and set it's value without declaring it legal tender for all debts public and private. Also, our legal tender laws are ex post facto, meaning they are retroactive and affect contracts that were in effect before the law was written, so they are in violation of Article 1 Section 9 of the Constitution.

 

[-C-]

More importantly it states that Congress has the authority to borrow money on the CREDIT of the united states. When will you economic noobs come to understand that we were founded a credit system, not a monetary system. We explicitly determined what our currency would exchange for foreign currencies during this period. The idea of some "floating" FOREX would have been seen as madness in the day, and a threat to sovereignty. If you can't control the value of your money, the exchange of it, and the production of it...you have no sovereignty.

Furthermore, It doesn't matter if your money is Gold, Silver, Olive branches, or prune juice. If there is no physical economic productivity to back the currency, regardless of form, then what is your currency worth? "BUT GOLD IS NEVER WORTH ZERO BRO!!!!!!" Tell that to Dante, when he wrote about the Gold Florin being absolutely worthless.

 

[CaptainAmerica]

doesn't this give congress the power to issue paper money?


The Constitution of the United States
Article I - The Legislative Branch
Section 8 - Powers of Congress

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

NO. The United States had "the continental" which was fiat currency(named "contintental") after the revolutionary war..it ended with debt and recession. The founders knew that they had to outlaw fiat currency from then on and the phrase "Not worth more than a continental" became a traditional saying about something having no value.

 

[dennis dujac]

1. It says coin money. At the time, "money" meant "specie" which meant precious metals. "Coin" meant stamp out disks of metal.

there are at least several instances where the original constitution has become obsolete

ex: the 3/5 compromise - article 1, section 2, paragraph 3

the practice of carrying purses of gold and silver specie is archaic

even paper money is becoming outmoded by electronic transactions

2. Paper currency was known as Bills of Credit (as prohibited to the States in Section 10 (1).

yes, prohibited of states, but not prohibited of congress

3. The Federal government was not specifically authorized to emit Bills of Credit and, therefore, was denied that power.

more germane, issuing paper money was not absolutely forbidden by the constitution, as it is not enumerated in article 1, section 9 - limits on congress

4. The Federal Government was not granted the power to establish legal tender and therefore was denied that power.

strict constructionist philosophies have lead to absurd interpretations of the constitution, see the 'doctrine of absurdity'

This is what they meant by to coin money.

Coinage Act of 1792

the coinage act has been updated a few times over the last 200 plus years and the 'legal tender cases' settled this matter [see reply to 'gold standard', below]


long after 1792, president madison approved an issuance of 36 million dollars in paper money, to help pay for the war of 1812

it looks to me like his actions 25 years after the constitutional convention of 1787, as a more experienced statesman, speak more certainly than the words he wrote before

Legal tender laws are not necessary for coining money or regulating the value of it. They are welcome to coin money and set it's value without declaring it legal tender for all debts public and private. Also, our legal tender laws are ex post facto, meaning they are retroactive and affect contracts that were in effect before the law was written, so they are in violation of Article 1 Section 9 of the Constitution.

140 years ago, the legal tender cases began affirming the constitutionality of paper money

Knox v. Lee and Parker v. Davis in 1871, then Juilliard v. Greenman in 1884

In Knox v Lee, 79 U.S. 457 (1871), the Court ruled that paper money was not unconstitutional: "The Constitution nowhere declares that nothing shall be money unless made of metal." The Court argued that the Congress can manipulate the value of precious metals to the point where it can be rendered as inherently worthless as paper (the Congress could enact a law that says that 10-dollar silver coins weigh 400 grains in one year and 500 grains the next, effectively devaluing the silver). The Court even noted the arguments of the Framers against "emitting bills," but wrote that the Framers (1) could not anticipate all governmental needs and (2) allowed the Congress to do what was necessary and proper to carry out its powers. In this case, that includes printing paper money.

So, said the Court, even though paper money is not expressly permitted by the Constitution, it is also not expressly forbidden, and in spite of the extra-constitutional opinions of some of the Framers, the ability to print paper money is a necessary and proper power of the federal government.

http://www.usconstitution.net/constfaq_q154.html

 

[dennis dujac]

The founders knew that they had to outlaw fiat currency from then on and the phrase "Not worth more than a continental" became a traditional saying about something having no value.

some of the founders may have thought that paper money was evil, at the time, but many of them were later responsible for the issuance of paper money [see the madison example, above]

Luther Martin, a delegate from Maryland, explained his views to the Maryland legislature and stated:

Against this motion we urged that it would be improper to deprive the Congress of that power [paper money]; that it would be a novelty unprecedented to establish a government which should not have such authority; that it would be impossible to look forward into futurity so far as to decide that events might not happen that should render the exercise of such a power absolutely necessary; and that we doubted whether if a war should take place it would be possible for this country to defend itself without resort to paper credit, in which case there would be a necessity of becoming a prey to our enemies or violating the constitution of our government; and that, considering that our government would be principally in the hands of the wealthy, there could be little reason to fear an abuse of the power by an unnecessary or injurious exercise of it. - ‪Breckenridge, 'Legal Tender', Greenwood Press, 1903‬

 

[Travlyr]

there are at least several instances where the original constitution has become obsolete

ex: the 3/5 compromise - article 1, section 2, paragraph 3

the practice of carrying purses of gold and silver specie is archaic

even paper money is becoming outmoded by electronic transactions



yes, prohibited of states, but not prohibited of congress



more germane, issuing paper money was not absolutely forbidden by the constitution, as it is not enumerated in article 1, section 9 - limits on congress



strict constructionist philosophies have lead to absurd interpretations of the constitution, see the 'doctrine of absurdity'






the coinage act has been updated a few times over the last 200 plus years and the 'legal tender cases' settled this matter [see reply to 'gold standard', below]


long after 1792, president madison approved an issuance of 36 million dollars in paper money, to help pay for the war of 1812

it looks to me like his actions 25 years after the constitutional convention of 1787, as a more experienced statesman, speak more certainly than the words he wrote before




140 years ago, the legal tender cases began affirming the constitutionality of paper money

Knox v. Lee and Parker v. Davis in 1871, then Juilliard v. Greenman in 1884

In Knox v Lee, 79 U.S. 457 (1871), the Court ruled that paper money was not unconstitutional: "The Constitution nowhere declares that nothing shall be money unless made of metal." The Court argued that the Congress can manipulate the value of precious metals to the point where it can be rendered as inherently worthless as paper (the Congress could enact a law that says that 10-dollar silver coins weigh 400 grains in one year and 500 grains the next, effectively devaluing the silver). The Court even noted the arguments of the Framers against "emitting bills," but wrote that the Framers (1) could not anticipate all governmental needs and (2) allowed the Congress to do what was necessary and proper to carry out its powers. In this case, that includes printing paper money.

So, said the Court, even though paper money is not expressly permitted by the Constitution, it is also not expressly forbidden, and in spite of the extra-constitutional opinions of some of the Framers, the ability to print paper money is a necessary and proper power of the federal government.

http://www.usconstitution.net/constfaq_q154.html

This is good information. Thanks. As long as the power to manipulate currency is granted to anyone or any institution, then economic freedom is impossible. Manipulation of currency is an immoral transfer of wealth. Complete separation of state and money seems to be the only way to achieve liberty.

 

[dennis dujac]

This is good information. Thanks. As long as the power to manipulate currency is granted to anyone or any institution, then economic freedom is impossible. Manipulation of currency is an immoral transfer of wealth. Complete separation of state and money seems to be the only way to achieve liberty.

if congress hadn't been able to borrow money / issue bonds, how could louisiana have been purchased?

 

[demolama]

if congress hadn't been able to borrow money / issue bonds, how could louisiana have been purchased?

illegally of course, Jefferson himself wanted a constitutional amendment to buy it. Rather than lose the opportunity he just did it.

 

[WilliamC]

doesn't this give congress the power to issue paper money?


The Constitution of the United States
Article I - The Legislative Branch
Section 8 - Powers of Congress

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

I fail to understand how you get 'paper money' from the words 'coin money'.

Coin is being used as a verb describing the actual making of metal coins.

Not printing paper.

Don't accept any wooden nickles either.

 

[Zippyjuan]

If only metal coins should be legal should we get rid of all credit cards and electronic payments? That would for one eliminate all internet commerce. Unless you had to ship the coins to a person you wished to buy something from. Over 90% of all money is currently only in electronic form. Would you like to have your paycheck issued in coins each month? Make a large purchase such as a car or house via coins only?

 

[Acala]

there are at least several instances where the original constitution has become obsolete

ex: the 3/5 compromise - article 1, section 2, paragraph 3

the practice of carrying purses of gold and silver specie is archaic

even paper money is becoming outmoded by electronic transactions

The Constitution has a provision for amending it. Amend it if it becomes obsolete. However, I don't share your opinion that carrying a purse of coin is archaic so I will oppose your attempt to amend. And we are finding out that the alternatives to specie - including electronic transactions - maybe aren't all they are cracked up to be.

yes, prohibited of states, but not prohibited of congress

The point was that the Founders knew the difference between a coin and a Bill of Credit. They authorized Congress to mint coins and did not authorize Congress to issue Bills of Credit. Therefore Bills of Credit were prohibited.

more germane, issuing paper money was not absolutely forbidden by the constitution, as it is not enumerated in article 1, section 9 - limits on congress

You misunderstand the document. The Federal government is one of enumerated, not plenary, powers. If the power was not specifically granted, it was denied. The power to issue Bills of Credit was not specifically granted, and therefore was denied.

strict constructionist philosophies have lead to absurd interpretations of the constitution, see the 'doctrine of absurdity'

1. Nothing absurd about sound money so the doctrine does not apply.

2. The Constitution has a provision for amendment. Amend it if you don't like it.

3. The Rule of Law requires that properly promulgated rules be obeyed OR changed through the process provided. Simply ignoring the rules because they are inconvenient or unpopular or outdated is inconsistent with the Rule of Law. To the extent we have simply allowed the Constitution to be ignored rather than obeyed or properly amended, we have abandoned the rule of law and adopted the rule of men. The rule of men is tyranny. I oppose tyranny. If you don't, stand aside.

 

[Acala]

If only metal coins should be legal should we get rid of all credit cards and electronic payments? That would for one eliminate all internet commerce. Unless you had to ship the coins to a person you wished to buy something from. Over 90% of all money is currently only in electronic form. Would you like to have your paycheck issued in coins each month? Make a large purchase such as a car or house via coins only?

No reason you can't have electronic transactions in gold.

And actually you could rather easily buy a car with a pocket or small purse of gold coins. Even less if gold were restored to its rightful position as the world's money.

 

[Zippyjuan]

No reason you can't have electronic transactions in gold.

Then you are using something other than coin for money if you are conducting an electronic transaction if coin is a physical metal. The gold does not go from person to person- instead it is a promise of gold which would basically be a bill of credit.

 

[dennis dujac]

I fail to understand how you get 'paper money' from the words 'coin money'.

Coin is being used as a verb describing the actual making of metal coins.

Not printing paper.

Don't accept any wooden nickles either.

read this:

In Knox v Lee, 79 U.S. 457 (1871), the Court ruled that paper money was not unconstitutional: "The Constitution nowhere declares that nothing shall be money unless made of metal." The Court argued that the Congress can manipulate the value of precious metals to the point where it can be rendered as inherently worthless as paper (the Congress could enact a law that says that 10-dollar silver coins weigh 400 grains in one year and 500 grains the next, effectively devaluing the silver). The Court even noted the arguments of the Framers against "emitting bills," but wrote that the Framers (1) could not anticipate all governmental needs and (2) allowed the Congress to do what was necessary and proper to carry out its powers. In this case, that includes printing paper money.

So, said the Court, even though paper money is not expressly permitted by the Constitution, it is also not expressly forbidden, and in spite of the extra-constitutional opinions of some of the Framers, the ability to print paper money is a necessary and proper power of the federal government.

http://www.usconstitution.net/constfaq_q154.html

 

[WilliamC]

If only metal coins should be legal should we get rid of all credit cards and electronic payments? That would for one eliminate all internet commerce. Unless you had to ship the coins to a person you wished to buy something from. Over 90% of all money is currently only in electronic form. Would you like to have your paycheck issued in coins each month? Make a large purchase such as a car or house via coins only?

The restrictions in the Constitution apply to governments, not private transactions.

You can use anything you want that the free market will accept as money, but under the Constitution the governments (State and Federal) can only use gold and silver.

Of course we could always amend the Constitution, but that hasn't happened yet.