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Posts Tagged ‘Tenth Amendment to the United States Constitution’

Painting, 1856, by Junius Brutus Stearns, Wash...

There are a lot of different things said about what the U.S. Constitution mandates regarding the monetary system, and to clarify, here is my analysis:

  • Congress has the sole public power to strike coins from any metal. The proof that it isn’t limited to gold and silver is the plain language, “coin money,” and the first Coinage Act of 1792, which provided for the coining of bronze coins as well as gold and silver.
  • Exercise of that power is optional, just as is their power to declare war.
  • Congress does not have the power to create any non coin-based money, based on an originalist interpretation of the Constitution and a strict interpretation of its enumerated power to coin money and the 10th Amendment.
  • Individuals and non-corporate associations of individuals retain the right to mint coins or issue paper currency, as per the 9th Amendment, so long as there is no counterfeiting.
  • States have the option of enacting legal tender laws, and if they do, gold and silver must be made legal tender in payment of debts.
  • People and even businesses are allowed to accept payment for goods and services in something other than gold and silver, regardless of legal tender laws, because of the distinction between payment for goods and services and payment of debts.
  • States are prohibited from issuing “bills of credit,” which specifically refers to paper currency. Due to the Tenth Amendment, the States retain powers not delegated to Congress, and, therefore, they have the power to issue credit that isn’t backed by anything, so long as there is no paper currency associated with it.

For my other writings about a constitutional monetary system, see The U.S. Constitution doesn’t say money should be gold or silver coin, and The Constitution doesn’t insist on a gold or silver-backed currency.

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