“To coin Money”

Last Updated on January 15, 2023 by Constitutional Militia

The following analysis is an excerpt from
TO REGULATE THE VALUE OF MONEY:
AN ANALYSIS OF THE POWER OF GOVERNMENT TO CREATE AND SET A VALUE ON MONEY
National Alliance for Constitutional Money
Monograph No. 7 
by Edwin Vieira, Jr.

The power “To coin Money”

A correct interpretation of the power “To coin Money” in Article I, Section 8, Clause 5 is obviously essential to understand the monetary system the Constitution prescribes and which the United States should have today, because that is the only provision in the Constitution that refers to the creation of “Money”.

Nevertheless, contemporary constitutional interpretation is a veritable chaos of contending notions on this seemingly simple subject. Indeed, it is easy to find people of all political persuasions who invoke the power “To coin Money” to rationalize governmental creation of any kind of money—including coins of the precious metals (silver and gold), coins of base metals (such as the cupro-nickel “sandwich” coins familiar in America), paper currency redeemable in gold coin (such as FRNs prior to 1933), irredeemable paper currency (such as contemporary FRNs ), and even the apparently oxymoronic “cashless” money (such as electronic bank-credits). These people theorize that the verb “coin” may be construed to mean “create by any means”, and that the noun “Money” is merely a label for whatever the government whimsically decrees is “money” (a medium of commercial exchange, a medium of taxation, a “legal tender”, and so on). Nothing could be further from the truth.

The lineage of Congress’ authority in Article I Section 8 Clause 5 of the Constitution “To coin Money” traces directly to linguistically similar and operatively identical language in the Articles of Confederation—”[t]he united states in congress assembled shall * * * have the sole and exclusive right and power of regulating the alloy and value of coin struck by their own authority, or by that of the respective states”[1]—which was later modified in the Federal Convention of 1787 to the power “To coin Money”.[2] Self-evIdently, the power of the Continental Congress “of regulating the alloy and value of coin struck” could have applied only to coins, in the strict sense of metallic objects. And no historical basis exists for arguing otherwise.

Article I, Section 8, Clause 5 sets out the sole, express grant of power in the Constitution to bring “Money” into existence, and unmistakably limits that power to a single, specific means of achieving its end: the act of “coin[ing]”. Nowhere in the Constitution or in any of its antecedents does or did another power exist to “print”, “issue”, “emit”, “make”, “create”, or “declare what shall be” “Money”. Therefore, on its face, the phrase “To coin Money” in Article I, Section 8, Clause 5 grants to Congress a power that that body can constitutionally exercise only on “Money” that admits of being coined—and thereby constitutionally defines the “Money” of the United States, the “Money” the United States may itself bring into existence, as coin alone.[3] For, in constitutional interpretation, “[a]ffirmative words are often, in their operation, negative of other objects than those affirmed”.[4]

Besides this legal doctrine of expressio unius exclusio alterius, basic considerations of constitutional federalism compel the same conclusion. One of the fundamental principles of American jurisprudence is that the very existence of the Constitution necessarily implies the definite and limited nature of the power of the government of the United States.[5] Indeed, by legal hypothesis, the Constitution contains no “independent and unmentioned power[s]”; for the contrary assumption would fatally “conflict with the doctrine that this is a government of enumerated powers”.[6] Congress—or any branch of the national government—enjoys no undefined and general powers, that some “theoretical government” might possess.[7] Instead, every claim of power must find direct support in a constitutional grant, “either in terms or by necessary implication”.[8] And the “burden of establishing a delegation of power to the United States * * * is upon those making the claim”.[9]

This is especially true in the case of the power “To coin Money”, an authority that belonged to the individual States before the Articles of Confederation, and then the Constitution, limited their monetary jurisdiction.[10] Prior to adoption of the Constitution, the Framers recognized on! three powers of the States related to money: (i) the power to “coin Money”; (ii) the power to “emit Bills of Credit” which were paper currencies, redeemable in coin, that circulated in the economy as what contemporary economists would call “money substitutes” or “fiduciary media of exchange”;[11] and (iii) the power to declare things “legal tender” for debts denominated in “Money” (that is, to declare that debtors could discharge their debts with things other than the money they owed).[12] In the pre­-constitutional period, no one admitted an inchoate, general authority in the States to “print”, “issue”, “emit”, “make”, “create”, or “declare what is to be” “Money”, in addition to the specific authorities to “coin Money” and to “emit Bills”. This is obvious from the conjunction of two facts:

• Article I, Section 10, Clause 1 limits the States only with respect to the powers “to coin Money” and to “emit Bills of Credit“.

• Since ratification of the Constitution, the States have never attempted to “print”, “issue”, “emit”, ”make”, “create”, or “declare what is to be” some form of “Money” other than coins or “Bills of Credit” (for example, a State fiat, irredeemable currency)—a power which the silence of Article I, Section 10, Clause 1 on that score arguably would allow them to exercise if such power had pre-existed the Constitution.[13] Indeed, the only example of a State’s purporting to exercise monetary powers after ratification of the Constitution involved the emission of Bills of Credit which the Supreme Court declared unconstitutional.[14]

Also telling in this regard is that the Constitution—written by men who well understood the prevailing law—denied the States the authority and granted Congress the power only to “coin Money” in Article I, Section 10, Clause 1 and Article I, Section 8, Clause 5, respectively. This exact, literal coincidence of prohibition and empowerment, in conjunction with the Tenth Amendment,[15] proves conclusively that Congress received only what the States lost.

If the extent of the power of Congress to bring “Money” into existence self-evidently confines itself to coin, the substance of that power defines itself with equal obviousness. Then,[16] just as now,[17] the verb “coin” in common parlance denoted “fashion[ing] pieces of metal into a prescribed shape, weight, and degree of fineness, and stamp[ing] them with prescribed devices, * * * in order that they may circulate as money”.[18] And that the Framers intended the verb to be taken in its strict denotation, rather than in some other, loose connotation, the further reference to “foreign Coin” in Article I, Section 8, Clause 5 renders inescapable, as does the distinction Article I, Section 8, Clause 6 makes between the “Securities” (presumably notes, certificates, and other paper evidence of indebtedness) and “current Coin of the United States”.

Equally apparent from a comparison of the power of Congress “To coin Money” in Article I, Section 8, Clause 5 to the disabilities of the States to “coin Money” and to “emit Bills of Credit” in Article I, Section 10, Clause 1 is the inescapable constitutional distinction between coin[ing] Money”, on the one hand, and “emit[ting] Bills of Credit”, on the other. The power “To coin Money”, then, on its face does not include a power to generate “Bills of Credit” in addition to or in lieu of coin, even if those bills are ostensibly redeemable on demand unit for unit, in lawful coin. This reflects the Framers’ understanding that unlike “Money” itself, a “Bill of Credit” amounts only to a promise to pav “Money”, bottomed upon the government’s credit.[19] Finally, taken in conjunction with the complementary disability of the States, the power “To coin Money” compellingly imports an authority to furnish and preserve, not to withhold or destroy, a sound system of coinage based on “a uniform and pure metallic standard of value”.[20] Article I, Section 8, Clause 5 does not say of what this “metallic standard” should consist—although Article I, Section 10, Clause 1 emphasizes the preëminent place the Constitution provides for silver and gold in its monetary schema; and both Article I, Section 9, Clause 1 and the Seventh Amendment refer explicitly to the (silver) “dollar”. The heritage of the coinage-power in English common law, moreover, indicates that the “Money” of the United States should be of the same “materials” as the “money of [pre-constitutional] England”: “either * * * of gold or silver”, with the use of “copper coin” permitted in limited instances “not upon the same footing with the other [precious metals ]”.[21]

Pre-constitutional English common law also indicates that the power “To coin Money” in Article I, Section 8, Clause 5 includes a power to provide for free coinage of silver and gold, financed either through traditional minting-charges or by other special taxes or dues.[22] If, therefore, the major purpose of the power “To coin Money is to supply the nation with sound coinage of silver and goId; and if the constitutional power “To coin Money” derives from English common law, with all the qualifications and limitations of that law except as expressly modified in the Constitution—then the power “To coin Money” includes no authority to interdict free trade in coin or bullion of the precious metals.

Finally, under the pre-constitutional English common law the King’s coinage-power included no power to seize the citizens’ bullion or coin already “in the said Mint”, and impliedly must also have disabled the King from confiscating specie in private possession outside the mint.[23] On this basis, the power “To coin Money” in Article I, Section 8, Clause 5 must also impliedly disable Congress—“upon any * * * Account or Pretence whatsoever”—from confiscating, forfeiting, seizing, attaching, stopping, or restraining the people’s silver and gold, whether in their own possession or temporarily in the custody of the government.

In sum, under the unwritten English constitution, power over coinage was part of the King’s prerogative. Parliament, however, had authority to add to, or delimit, this power by statute—such enactments becoming part of the English constitution as legislative definitions of the coinage-power under common law. The Founders transferred all this power to Congress by enumerating it in Article I, Section 8, Clause 5.[24] Under the English constitution, of course, Parliament retained the overriding authority to change the coinage-power by statute. But once the Founders enumerated that power in the Constitution, they placed it beyond the ability of Congress to transform by simple legislative enactment.[25]