State Issued

“Power of the Purse”

The Constitution specifies and thereby imposes a disability on the form of “Money” the States must use as a Tender when performing their constitutional duties—“gold and silver” in the form of “Coin”.

Last Updated on July 11, 2022 by Constitutional Militia

CONGRESS EMPOWERED AND DISABLED FROM USING SILVER AND GOLD ONLY AS “MONEY” IN ALL GOVERNMENTAL FISCAL TRANSACTIONS

“Power of the Purse”: Entrusted to Congress

The Constitution delegates the “Power of the Purse” to Congress. That is the governmental power “To lay and collect Taxes,..”, and to spend those monies “for the common Defense and general Welfare of the United States…”.[1] Congress also has the power “To…borrow Money…”.[2] The Constitution then specifies and thereby imposes a disability on the form of “Money” the States must use as a Tender when performing their constitutional duties—“gold and silver” in the form of “Coin”. [3]

One particularly clear provision in the Constitution is the duty “No State shall make any Thing but gold and silver Coin a Tender in Payment of Debts…”.[4] That duty was reinforced with the disability “No State shall…emit Bills of Credit”.[5] A “bill of credit” was a term of art for “paper money”. This provision makes pellucid that all “paper money” is unconstitutional whether redeemable in some other commodity or not. Under the Articles of Confederation, each State had the power to “emit bills”.[6] And the States did emit bills with disastrous results—hyperinflation and economic devastation. When the Articles of Confederation were replaced with a Constitution, the power to “emit bills” was carried over into the original draft of the Constitution. This power was debated and voted down 9-2, and that power was removed.[7] This was a rare, and possibly the only, instance in history when such a huge political blunder was made and the men who made that blunder acknowledged it as such and actually corrected it.

Unfortunately, this was not the end of the paper money schemes that would plague Americans. Immediately upon ratification of the Constitution the banks set out to infiltrate Congress[8] in order to emit bills of credit (paper money). Then in the late 1800s with a Civil War looming, Abraham Lincoln would violate the Constitution by emitting bills of credit (paper money) that came to be known as the “Lincoln Greenback”. This paved the way for serial blunders and plunders by Congress and the special interests who work their strings, consecrated by inept, incompetent, and bungling Supreme Court decisions. Until we arrive at the Federal Reserve System we have today which was established in 1913 for the purpose of “emit[ting] Bills of Credit”. Federal Reserve Notes, which are bills of credit—continue to circulate to this day—debt masquerading as currency—syphoning the wealth from average American’s pocket because the average American does not know the legal definition of a constitutional “dollar” or why it is vital to his economic security.

The economic and social destruction caused by paper money was recognized by the Continental Congress in 1777:

“paper currency *** is multiplied beyond the rules of good policy. No truth being more evident, than that where the quantity of money *** exceeds what is useful as a medium of commerce, its comparative value must be comparatively reduced. To this cause *** are we to ascribe the depreciation of currency: the consequences to be apprehended are equally obvious and alarming. They tend to the depravity of morals ,—decay of public virtue—a precarious supply for the war, debasement of the public faith—injustice to individuals, and the destruction of honor, safety and independence of the United States. Loudly, therefore, are we called upon to provide a seasonable and effective remedy.”[1]

Footnotes:

1.) 12 Journals of the Continental Congress, at 954. Also see Pieces of Eight: The Monetary Powers and Disabilities of the United States Constitution, by Dr. Edwin Vieira, Jr., Gold Money Foundation Special Edition, Volume I, at 84.

Under the Articles of Confederation (pre-Constitution), the States did have the power “emit bills” (i.e., paper currency and so they created paper notes and tried to circulate them among the citizenry during the War of Independence. When the States discovered their bills of Credit did not circulate well among the citizenry, they passed “Legal Tender” laws that said, “You (the citizens) are required to take this Bill of Credit (paper money) when you engage in a commercial transaction with us (the State).” Paper money causes inflationary episodes, and as a result there was hyperinflation among the 13 original States, which resulted in a deep depression. And so, during the Constitutional Convention debates, it was voted 9-2 to remove the power of States to “emit Bills of Credit” and NOT give that same power to Congress.[1] This is likely the only time in history when politicians made such an enormous blunder, and then turned around and corrected their own mistake.

Footnotes:

1.) Documents Illustrative of the Formation of the Union of the American States, H.R. Doc. No. 398, 69th Cong., 1st Sess. (1927), at 556-57. See Debates on the Adoption of the Federal Constitution in the Convention Held at Philadelphia in 1787with a diary of the Debates of the Congress of the Confederation; as Reported by James Madison, a Member, and Deputy from Virginia (J. Elliot ed.), in 5 J. Elliott, The Debates on the several Conventions on the Adoption of the Federal Constitution as recommended by the General Convention at Philadelphia in 1787 (2d ed. 1836), at 434-35; 2 The Records of the Federal Convention, at 308-310. These editions of Madison’s notes offer in minor ways (primarily as to punctuation and capitalization), but without any substantive discrepancies. For Analysis on the debate over this deletion see Pieces of Eight: The Monetary Powers and Disabilities of the United States Constitution, (Chicago, Illinois R R Donnelly & Sons, Inc., GoldMoney Foundation Special Edition [2011] of the Second Revised Edition, 2002) by Dr. Edwin Vieira, Jr., Volume I, page 144-153.

It was Thomas Jefferson who recognized certain practical steps to adopt the Spanish dollar as the “Money Unit”: “If we determine that a dollar shall be our unit, we must say with precision what a dollar is.This coin as struck at different times, of different weights and fineness, is of different values”[1]. This, though Jefferson saw as a problem for economic science to solve through objective measurement, not as a matter for politics to dictate according to arbitrary “policy”. “If the dollars circulating among us be of every date equal, we should examine the quantity of pure metal in each, and from them form an average for our unit. This is a work proper to be committed to as well as merchants, and which should be decided on actual and accurate experiments”[2]The proportion between the value of gold and silver, he added, is a mercantile problem altogether.[3]Given [t]he quantity of fine silver which shall constitute the unit”, and “the proportion of the value of gold to that of silver”, Jefferson went on, a table should be formed *** classing the several foreign coins according to their fineness, declaring the worth *** in each class, and they should be lawful tenders at those rates, if not clipped or otherwise diminished.” Subsequently, the “value” of the United States “Money Unit”—the “dollar”— became law The Mint Act of 1792.[4]

Footnotes:

1.) Notes on the Establishment of a MONEY MINT, and of a COINAGE for the UNITED STATES, appended to Propositions, ante note 603, at 11.

2.) Id.

3.) Id.. at 12 “Here the legislatures [of the States] should cooperate with Congress in providing that no money should be paid or received at their treasuries, or by any of their officers, or any bank, but on actual weight; in making it criminal in high degree to diminish their own coins, and in some smaller degree to offer them in payment when diminished” Id.

4.) See: Pieces of Eight: The Monetary Powers and Disabilities of the United States Constitution, by Dr. Edwin Vieira, Jr., Gold Money Foundation Special Edition, Volume I, page 139.

John Maynard Keynes, the famous economist who fathered our present economic system, confesses (or boasts) in his book “The Economic Consequences of the Peace”, 1920:

“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

1.) U.S. Const., art. I, § 8, cl. 1.

2.) U.S. Const., art. I, § 8, cl. 2.

3.) U.S. Const., art. I, § 10, cl. 1.

4.) Id.

5.) Id.

6.) Arts. of Confed’n., ¶ IX.)

7.) Documents Illustrative of the Formation of the Union of the American States, H.R. Doc. No. 398, 69th Cong., 1st Sess. (1927), at 556-57. See Debates on the Adoption of the Federal Constitution in the Convention Held at Philadelphia in 1787with a diary of the Debates of the Congress of the Confederation; as Reported by James Madison, a Member, and Deputy from Virginia (J. Elliot ed.), in 5 J. Elliott, The Debates on the several Conventions on the Adoption of the Federal Constitution as recommended by the General Convention at Philadelphia in 1787 (2d ed. 1836), at 434-35; 2 The Records of the Federal Convention, at 308-310. These editions of Madison’s notes offer in minor ways (primarily as to punctuation and capitalization), but without any substantive discrepancies. For Analysis on the debate over this deletion see Pieces of Eight: The Monetary Powers and Disabilities of the United States Constitution, (Chicago, Illinois R R Donnelly & Sons, Inc., GoldMoney Foundation Special Edition [2011] of the Second Revised Edition, 2002) by Dr. Edwin Vieira, Jr., Volume I, page 144-153.

8.) See generally G. Edward Griffin, The Creature From Jekyll Island: A Second Look at the Federal Reserve (2010), Fifth Edition, American Media Publishers.

9.) Craig v. Missouri, 29 U.S. (4 Pet) 410, 442, (1830)  (Johnson, J., dissenting). Note that this observation was made in 1830. Also see Pieces of Eight: The Monetary Powers and Disabilities of the United States Constitution, by Dr. Edwin Vieira, Jr., Gold Money Foundation Special Edition, Volume I, page 32.

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