The first step towards elucidating the true meaning of the Constitution’s monetary provisions is not to consult decisions of the Supreme Court, but to study American history preceding the Court’s formation: “to review the background and environment of the period in which that institutional language was fashioned and adopted”. (footnote 1) “to place ourselves as nearly as possible in the condition of the [Framers]”, (footnote 2) and “to recall the contemporary or then recent history of the controversies on the subject” that “still were fresh in the memories of those who achieved independence and established our form of government”. (footnote 3)
WE THE PEOPLE’S Legal Definition of Money in the Pre-Constitutional Period
As a Rule of Constitutional Construction:
WE THE PEOPLE’S Legal Definition of Money in the Pre-Constitutional Period
Pre-constitutional common law is one of the most important legal historical sources of the meaning of many constitutional provisions. (footnote 4) During the late 1700s Blackstone’s Commentaries was the standard legal treatise among Americans. (footnote 5) Blackstone’s discussion of the English monetary powers was detailed:
[A]s money is the medium of commerce, it is the king’s prerogative, as the arbiter of domestic commerce, to give it authority or make it current. Money is an universal medium, or common standard, by comparison with which the value of all merchandize may be ascertained: or it is a sign, which represents the respective values of all commodities. Metals are well calculated for this sign, because they are durable and are capable of many subdivisions: and a precious metal is still better calculated for this purpose, because it is the most portable. A metal is also the most proper for a common measure, because it can easily be reduced to the same standard in all nations: and every particular nation fixes on it it’s own impression, that the weight and standard (wherein consists the intrinsic value) may both be known by inspection only.
* * * * *
The coining of money is in all states the act of the sovereign power; for the reason just mentioned, that it’s value may be known on inspection. And with respect to coinage in general, there are three things to be considered therein; the materials, the impression, and the denomination.
With regard to the materials, sir Edward Coke lays it down, that the money of England must either be of gold or silver; and none other was ever issued by the royal authority till 1672, when copper farthings and half-pence were coined * * *. But this copper coin is not upon the same footing with the other in many respects * * *.
As to the impression, the stamping thereof is the unquestionable prerogative of the crown * * *.
The denomination, or the value for which the coin is to pass current, is likewise in the breast of the king * * *. In order to fix the value, the weight, and the fineness of the metal are to be taken into consideration together. When a given weight of gold or silver is of a given fineness, it is then of the true standard, and called sterling metal * * *. And of this sterling metal all the coin of the kingdom must be made by the statute 25 Edw. III. c. 13. So that the king’s prerogative seemeth not to extend to the debasing or inhancing the value of the coin, below or above the sterling value * * *. The king may also, by his proclamation, 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; otherwise the consent of parliament will be necessary. (footnote 6)
- Blackstone also recounted royal abuses of the borrowing power that had lead to a constitutional crisis in England.
Besides implying historical misuses of the King’s prerogative as to “debasing or enhancing the value of coin” (and the existence of constitutional disabilities on that particular), Blackstone also recounted royal abuses of the borrowing power that hd lead to a constitutional crisis in England:
For no subject * * * can be constrained to pay any aids or taxes, even for the defence of the realm or the support of government, but such as are imposed by his own consent, or that of his representatives in parliament. By the statute 25 Edw. I. c. 5 and 6 it is provided that the king shall not take any aids or tasks, but by the common assent of the realm.
* * * * *
And as this fundamental law had been shamefully evaded under many succeeding princes, by compulsive loans, and benevolences extorted without a real and voluntary consent, it was made an article in the petition of right 3 Car. I, that no man shall be compelled to yield any gift, loan, or benevolence, tax, or such like charge, without common consent by act of parliament. (footnote1)
1.) William Blackstone, Commentaries on the Laws of England (Amer. ed., 4 vols. & App., 140). “Indeed when Charles the first succeeded to the crown of his father, and attempted to revive some enormities, which had been dormant in the reign of king James, the loans and benevolences extorted from the subject, * * * and other domestic grievances clouded the morning of that misguided princes reign; which * * * at last went down in blood , and left the whole kingdom in darkness. It must be acknowledged that, by the petition of right, enacted to abolish these encroachments, the English Constitution received great alterations and improvement.” 4 Id. at 429-30. Also 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  of the Second Revised Edition, 2002) by Dr. Edwin Vieira, Jr., Volume I, page 68-69.
- Thus, Blackstone elaborated five monetary principles of common law.
Thus, Blackstone elaborated five monetary principles of the common law—
First, the precious metals are “most proper” for “money”. the “universal medium, or common standard”.
Second, the “coin of the kingdom” must cons is tot gold or silver “of the true standard”, in terms of weight and fineness. Or, under English common law prior to 1776, the only true “money” was undebased “gold silver coin”.
Third, the common law power to coin money by “impression” or “stamping”, and to “fix the value (or “denomination”) thereof, was an Executive (Crown) not Parliamentary, power.
Fourth, “to fix the value” of domestic or foreign money meant to establish its “intrinsic value” by comparing “the weight and fineness of the [precious] metal” in a coin with the true standard, * * * sterling metal”. (footnote 1) This procedure precluded “debasing or inhancing the value of the coin, below or above the sterling value. (footnote 2) Specifically, from 1603 through 1816, England followed a bimetallic monetary policy, whereby the law made no change in the silver coinage, but altered the weight and denomination of the gold to secure concurrent circulation. (footnote 3)
Fifth, common law denied the Executive any power to levy “compulsive loans * * * extorted without a real and voluntary consent ” by the people.
1.) Blackstone could easily have substituted for his language “fix the value” the equivalent phrase “regulate the value” as later appeared in Article I, Section 8, Clause 5 of the Constitution. For, on this context, the two verbs are synonymous. See e.g., Black’s Law Dictionary (4th rev. ed. 1968), at 4561.
2.) The common law did not assert the economic error that silver ands gold necessarily have “intrinsic value” in the sense of an inherent exchange. value, or purchasing power, recognized at all times in all places. Rather, legal“intrinsic” value meant simply the amount ofpue silver or gold in a coin, measured agains the physical amount of precious metal in the standard. Legal intrinsic value is thus an objective physical characteristic or quality of a coin; whereas a coin’s purchasing power is a matter of subjective valuation by buyers and sellers in the marketplace. See L. Von Mises, The Theory of Money and Credit (1971 reprint, H. Batson transl., new ed., 1952), at 97-123.
3.) S. Breckinridge, Legal Tender: A Study in English and American Monetary History (1903), at 43-46. This was the policy the Founding Fathers adopted.
1.) Everson v. Board of Education, 330 U.S. 1, 8 (1947). Accord, e.g., Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429, 558 (1895); Maxwell v. Dow, 176 U.S. 581, 602 (1900); Grosejan v. American Press Co. 297 U.S. 233, 245-49 (1936).
2.) Ex parte Bain, 121 U.S. 1, 12 (1887). Accord, e.g., South Carolina v. United States, 199 U.S. 437, 450 (1905).
3.) Boyd v. United States, 116 U.S. 616, 624-25 (1886).
4.) E.g., Moore v. United States, 91 U.S. 270, 274 (1876); Ex parte Bain, 121 U.S. 1, 10-12 (1887); Smith v. Alabama, 124 U.S. 465, 478-79 (1888); Pollock v. Farmers’ Loan & Trust Co., 157 U.S.429, 572 (1895); United States v. Wong Kim Ark, 169 U.S. 649, 654-56 (1898); Schick v. United States, 195 U.S. 65, 68-70 (1904); South Carolina v. United States, 199 U.S. 437, 449-50 (1905); Kansas v. Colorado, 206 U.S. 46, 94-95 (1907); Patton v. United States, 281 U.S. 276, 287-90 (1930); Dimick v. Schiedt, 293 U.S. 474, 476-82, 487 (1935); United States v. Wood, 299 U.S. 123, 133-39 (1936). See e.g. 2.J. Story, Commentaries on the Constitution of the United States (5th ed. 1891), 109, §§ 1338-41, at 212-14.
5.) William Blackstone, Commentaries on the Laws of England (Amer. ed., 4 vols. & App., 1771-1773).
6.) W. Blackstone, Commentaries on the Laws of England (Amer. ed., 4 vols. & App., 277-278) (footnotes omitted) (emphasis supplied).