the constitutionality of paper money

[Zippyjuan]

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.

The line about only using gold and silver was in the section discussing states- they were the ones restricted to those metals. That was not enumerated as related to the Federal government beyond granting the power to issue and regulate money.

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

http://www.usconstitution.net/xconst_A1Sec10.html

Legislative powers:
http://www.usconstitution.net/xconst_A1Sec10.html

To borrow money on the credit of the United States

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

 

[dennis dujac]

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.

gold is a volatile commodity with an inelastic supply, when demand increases, the price increases at a greater rate than goods with an elastic supply

that may be good for the holder when the value of his gold is increasing, but it can be destabilize an economy when prices plummet, as they have so many times in the past

 

[Acala]

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.

You can issue all the bills of credit you want (or can get people to accept) as long as you are not defrauding people.

 

[Acala]

gold is a volatile commodity with an inelastic supply, when demand increases, the price increases at a greater rate than goods with an elastic supply

that may be good for the holder when the value of his gold is increasing, but it can be destabilize an economy when prices plummet, as they have so many times in the past

Gold as money is stable. There have been very few times when gold value had "plummeted". Other than the influx of New World gold into the Old world, I can't think of any. The California gold rush produced some drop in exchange value but hardly a plummet. Certainly gold has never done anything like paper money has done numerous times.

Care to provide a citation?

In any event, Dr. Paul's position is that the people should be free to choose what they want to use as money. Historically that has been gold. But it might be something different this time around.

 

[Zippyjuan]

You can issue all the bills of credit you want (or can get people to accept) as long as you are not defrauding people.

SO paper or electronic money is legal then. In addition to coins.

 

[dennis dujac]

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.

show me where the constitution says congress is not authorized to issue bills of credit

 

[Acala]

SO paper or electronic money is legal then. In addition to coins.

The Constitution has nothing to say about what you might want to use as, or give to others as, money.

 

[Acala]

show me where the constitution says congress is not authorized to issue bills of credit

Sorry, but when it comes to Federal power the burden is upon you to show where it is specifically authorized. That is the nature of a government of enumerated powers.

 

[Acala]

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

The Supreme court does not have the final say on the meaning of the Constitution, even though it has taken that mantle upon itself.

 

[WilliamC]

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

So?

The Supreme Court has been ruling in favor of bigger and more intrusive Federal Government since it's inception, but that doesn't mean they are right.

Obviously though their opinion carries more weight than mine, I don't deny that.

They are part of the problem as I see it, and will take a long time to correct if it can ever be undone.

 

[WilliamC]

The line about only using gold and silver was in the section discussing states- they were the ones restricted to those metals. That was not enumerated as related to the Federal government beyond granting the power to issue and regulate money.

http://www.usconstitution.net/xconst_A1Sec10.html

Legislative powers:
http://www.usconstitution.net/xconst_A1Sec10.html

I still don't see an ennumerated power stating that the Federal Government can print paper money, but maybe I don't have my special glasses that let me read into the Constitution anything I please.

 

[Zippyjuan]

The Constitution has nothing to say about what you might want to use as, or give to others as, money.

True.

 

[Zippyjuan]

I still don't see an ennumerated power stating that the Federal Government can print paper money, but maybe I don't have my special glasses that let me read into the Constitution anything I please.

The "power to coin money and regulate the value thereof" does not specify what the money must be. It gives that power to Congress to decide.

 

[dennis dujac]

Sorry, but when it comes to Federal power the burden is upon you to show where it is specifically authorized. That is the nature of a government of enumerated powers.

strict constructionism was tried early in the evolution of this country, it didn't work well and was abandoned, for the most part

 

[-C-]

We are a CREDIT system not a MONETARIST system!!!!!!!! Its what the constitution demands. It IS and WAS the only way to stay sovereign from Imperial money in London. Empires run off Monetary Systems, Nation States run off Credit Systems with fixed exchange rates. Otherwise, where is your claim to sovereignty?

People think money holds intrinsic value, so foolish they are.

 

[Acala]

strict constructionism was tried early in the evolution of this country, it didn't work well and was abandoned, for the most part

It is true that adhering to the Constitution didn't work well for those who wanted to use government as a tool to steal the wealth and liberty of the people and so, over time, it was indeed abandoned. And that is exactly how we have arrived at our current deplorable state where what was once a strictly limited Federal power is now nearly omnipotent, the country is bankrupt, the people are sinking into economic despair, corruption and deceit are the norm for government, the currency is teetering on the edge of collapse, and our role in the world is as hired thug rather than beacon of liberty.

And that's what you get when the rule of men replaces the rule of law.

 

[WilliamC]

The "power to coin money and regulate the value thereof" does not specify what the money must be. It gives that power to Congress to decide.

The word 'coin' as used in the 'power to coin money' is a verb that does not go with paper but rather metal. 'Regulate the value thereof' doesn't negate the requirement that money be 'coined'.

Not 'printed'.

Hence the old adage don't accept any wooden nickels.

Which is essentially what the US has been using as money since it went off the gold standard.

edit: remember, Ron Paul does not advocate a return to the gold standard, but rather that gold simply be legalized to use as money.

If the FED didn't have a government enforced monopoly on what constitutes money then maybe all the specie it prints wouldn't be such a problem because people would have a choice as to what currency to use.

As it is we are forced to use Federal Reserve Notes, and that obviously is an anti-free market approach.

 

[dennis dujac]

It is true that adhering to the Constitution didn't work well for those who wanted to use government as a tool to steal the wealth and liberty of the people and so, over time, it was indeed abandoned. And that is exactly how we have arrived at our current deplorable state where what was once a strictly limited Federal power is now nearly omnipotent, the country is bankrupt, the people are sinking into economic despair, corruption and deceit are the norm for government, the currency is teetering on the edge of collapse, and our role in the world is as hired thug rather than beacon of liberty.

And that's what you get when the rule of men replaces the rule of law.

you're mistaking politically biased rhetoric for reality

 

[DamianTV]

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

This clause restricts what the States can pay thieir bills in, however it does not restrict the people from using competing currency, even if that competing currency is fiat legal tender.

 

[Danke]

http://www.fame.org/HTM/Vieira_Edwin_To_Regulate_the_Value_of_Money_EV-006.HTM