As with the power “To coin Money”, the allied power in Article I, Section 8, Clause 5 “To * * * regulate the value, and of foreign Coin” traces its ancestry to linguistically similar—and operatively identical language in the Articles of Confederation, later successfully modified in the Federal Convention of 1787. (footnote 2) Of no little significance is the Framers’ consistent association throughout its evolution, of the power “To * * * regulate * * * Value ” with the cognate power “To * * * fix the standard of Weights and Measures” which also appears in Clause 5. (footnote 3) Again, as with the power “To coin, nowhere in the Constitution or anywhere antecedents does or did another explicit power exist to “regulate the Value” of “currency”, “bills of credit”, “securities”, “notes”, “paper money”, or anything other than United States and foreign coin. The verb “regulate” refers to a particular, specific activity relating only to coinage rather than “granting general powers of legislation” to declare what shall have “Value”, and to what degree, as “Money”. (footnote 4)
This is not because the Founding Fathers were economic illiterates, unconversant with what some people may flatter themselves are modern ideas about managed paper currencies. To the contrary: From their own experiences and their knowledge of Colonial history, they were well aware that legislatures and courts had often attempted to manage paper money, by setting rates of exchange for “bills of credit”, and revaluing (“scaling”) contracts expressed in paper money, using tabular standards and like devices. (footnote 5) Because they also knew that the choice of which standards to use in these essays in monetary (mis)management easily degenerated into a political contest, they must have been concerned that, were any such power included in the Constitution, it should be specified clearly. (footnote 6) So, if they included no congressional power “To * * * regulate the Value” applicable to “bills of credit”, it must be because they deemed it unnecessary —which, of course it would be if Congress, both under Article I, Section 8, Clause 2, (footnote 7) and the States under Article I, Section 10, Clause 1, (footnote 8) lacked all power to emit “bills of credit” , and therefore needed no power “To * * * regulate the Value thereof”. That is, in the historical context of the Founders’ experiences with managed paper currencies, the absence of an explicit power “To * * * regulate the Value of Bills of Credit” is compelling evidence that the Constitution contains no implicit power for government at any level to emit “bills of credit” .
The specificity for coin of the power “To * * * regulate the Value thereof and of foreign Coin” unequivocally define’s that powers substance. “[R]egulate” meant then, (footnote 9) as it does today (footnote 10) to adjust according to some rule or standard. “‘The word ordinarily implies not so much the creating or establishment of a new thing, as the arranging in proper order and controlling that which already exists.’” (footnote 11) Such an “arranging in proper order” succinctly describes what “regulat[ing]” coinage meant, in governmental practice and public understanding, prior to the ratification of the Constitution.
For instance, in his Commentaries, Blackstone outlined the common law concerning “[t]he denomination, or the value for which the coin is to pass current”;
In order to fix the value, the weight and fineness of the metal are to be taken into consideration together. When a given weight of gold or silver is of given fineness, it is then the true standard, and called sterling metal * * *. And of this sterling metal all of the coin of the kingdom must be made * * * . The king may also * * * legitimate foreign coin, and make it current here; declaring at what value it shall be taken in payments. But this * * * ought to be by comparison with the standard of our own coin * * * (footnote 12)
Interestingly, Blackstone equated “the value for which the coin is to pass current” with its “denomination”, or mere name—indicating that the process of “fix[ing] the value” of both domestic and foreign coins at common law was essentially an objective comparison of the weight and fineness of precious metal in a particular “denomination” to “the true standard” of that metal, rather than an attempt to manipulate the coins’ purchasing power according to some arbitrary policy.
Blackstone wrote of “fix[ing] the value” of coins; but he could have easily have said “regulating the Value”, the verbs “fix” and “regulate” being effectively synonymous in this context. (footnote 13) An early example of such usage appears in Queen Anne’s Proclamation of 1704, and the Parliamentary Act of 1707, which referred to “a Table of the Value of the several foreign Coins which usually pass in payments in or said Plantations, according to their Weight, and the Assays made of them in our Mint, thereby shewing the just Proportion which each Coin ought to have to the other”, and then commanded that certain foreign coins “stand regulated, according to their Weight and Fineness, * * * in Proportion to the Rate before limited and set for the Pieces of eight of Sevil, Pillar, and Mexico”. (footnote 14)
The Continental Congress proceeded in the same manner. In 1776, a committee “appointed to * * * ascertain the value of the several species of gold and diver coins current in these colony, and the proportions they * * * ought respectively to bear to Spanish milled dollars”, prepared a table of “rates”, showing the name and weight of the various coins, and their “Value in Dollars”. (footnote 15) The similarity of this procedure to that in 1707 Act nearly three quarters of a century earlier—even to the use of the nouns “proportion”. “rate”, and “value”, and of the verb “ascertain”—is both striking and hardly accidental.
Later that year, another committee submitted a more detailed report on the same subject. The committee defined its task as, first, “declaring the precise weight and fineness of the * * * Spanish milled dollar * * * now becoming the Money-Unit or common measure of other coins in these states”; and, second, “explaining the principles and establishing rules by which * * * the said common measure shall be applied to other coins * * * in order to estimate their comparative value” (footnote 16) Having stated the weight of the Spanish Milled dollar, “as it comes from the Mint new and unworn, the committee then set out the rules for regulating the value of silver and gold coins: “[A]ll * * * silver coins * * * ought to be estimated * * * according to the quantity of fine silver they contain.” And “all gold coins * * * ought to be estimated * * * according to the quantity of fine gold they contain and the proportion * * * which the value of fine gold bears to that of fine silver in those foreign markets at which these states will probably carry on commerce”, “the several proportions at the said markets * * * [being] averaged”, (footnote 17) Although it found this average to be “nearly as one to fourteen and * * * one half”, the committee nevertheless recognized that, “as in long tracts of time the proportional values of gold and silver at market are liable to vary, whenever such variation shall have become sensible , this house [i.e., Congress] ought to make a corresponding charge in the rates at their treasury”, (footnote 18) It then presented a table of values, showing the various silver and gold coins, their “Proportion of fine metal”, “Weight”, amount of “Fine metal”, and “Value in Dollars” (to six decimal places). (footnote 19)