March 24, 2011 – Article I, Section 08, Clause 05-06 of the United States Constitution – Guest Essayist: Troy Kickler, Founding Director of North Carolina History Project and Editor of northcarolinahistory.org

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Article 1, Section 8, Clauses 5-6

5:  To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

6:  To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;

When the U.S. Constitution was drafted at the Constitutional Convention of 1787 and then submitted to the states to ratify, convention delegates attempted to correct what they considered to be weaknesses in the Articles of Confederation.  They worked to strengthen the national government’s role in monetary policy and eliminate factors that might prevent a unified American economy, with the states working in concert.  Three steps to achieve those goals included the clauses pertaining to the coinage of money, a standard of weights and measurements, and the punishment of counterfeiting

Under the Articles of Confederation, the national government and the states had the authority to coin money.  But in Article 1, Section 8, the enumerative article that gives certain powers to the United States government, the Constitution specifies that Congress have the exclusive right to coin money.

During the Revolutionary War (1776-1783), states had accumulated much debt and some had difficulty paying for their war costs.  As a result, state governments issued bills of credit to provide a form of debt repayment.  Meanwhile during the 1780s, inflation started soaring.  The issuance of paper money, North Carolina Founder Hugh Williamson writes in his 1788 essay, “Remarks on the New Plan of Government,” contributed to a ruinous economy and a loss of honor on the global stage.  Convention delegates, therefore, included the coinage clause as a means to stop inflationary measures and bills of credit that abounded across the states.  (Another clause–Article 1, Section 10–prevents states from issuing bills of credit and paper money.)

Although paper money is commonplace in today’s world, it is absent from Article 1, Section 8.  The Founders were familiar with the practice of printing money and more than a few had definite opinions regarding the practice.  Some scholars have suggested and even argued that its omission indicates that Congress does not have the authority to print paper money or issue bills of credit.  A series of Supreme Court cases in the late 1800s, including Knox v. Lee (1871) and Julliard v. Greenman (1884), however, expanded the government’s role in monetary policy; the Court ruled that the power was inherent in a sovereign government.

In 1787, convention delegates also included the weights and measurements clause to promote uniformity in trade.  Allowing states to separately value foreign currency and create individual exchange rates, writes Joseph Story in Commentaries on the Constitution (1833), invited “infinite embarrassment and vexations in the course of trade.”  A uniform system ensured national honor and also lessened the chances that the innocent would be subjected to “the grossest frauds.”  Indeed, a fixed standard removes confusion in the market place and limits the efforts of the deceitful.

The Framers also believed that a Congressional authority to value foreign coin helped ensure uniformity in trade.   In Federalist 42, James Madison feared that the “proposed uniformity in the value of the current coin might be destroyed by subjecting that of foreign coin to the different regulations of the different States.”  To Madison, the clause was a needed corrective.  It reduced, if not eliminated, monetary confusion and bolstered the American economy.

In the essay, Madison also links the constitutional provision for giving the national government the authority to punish counterfeiting with the weights and measurements clause.  Both were necessary to secure the value of American coin and eliminate confusion in trade.

Some scholars have contended that the counterfeiting clause is superfluous; the authority to punish counterfeiting is inherent in the power to regulate coinage, the argument goes.   Legal scholar David F. Forte, however, points out that the Framers included it for three reasons: to distinguish counterfeiting from treason, as it had been considered in England; to ensure that Congress had authority over international incidents on American soil that involved counterfeiting of foreign currency; and to ensure national supremacy in monetary policy.

The coinage, weights and measurement, and counterfeiting clauses solved various commercial and monetary problems, and they eliminated confusion in market places by enumerating certain powers to the national government.   They also were symbolic, buttressing federal supremacy in monetary policy.

Troy Kickler, Ph.D., is the Founding Director of North Carolina History Project and Editor of northcarolinahistory.org

6 replies
  1. Cutler
    Cutler says:

    A question, By giving Congress the exclusive right to coin money, did the Founders not assume that Congress would always desire to keep inflation low? Nowadays Congress purposely creates inflation to encourage spending, but by doing this they actually damage the economy. Inflation is a sinking ship that just gets heavier the more money is printed.

    Reply
  2. yguy
    yguy says:

    A series of Supreme Court cases in the late 1800s, including Knox v. Lee (1871) and Julliard v. Greenman (1884), however, expanded the government’s role in monetary policy; the Court ruled that the power was inherent in a sovereign government.

    Without having read any of these rulings, I nevertheless submit that a federal jurist referring to the federal government as being in any sense sovereign is an impeachable offense.

    As for the issuance of paper money, I have lately formed the opinion that Congress has no such authority. I have seen, and in fact proffered myself, the argument that the letter of A1S8C5 allows money to be coined out of base metals, which is essentially equivalent to printing money; but the argument is fatally devoid of historical and constitutional context, since states were allowed to make gold and silver legal tender, which already existed in the US as foreign currency, so that the issuance of US dollars made of lead would have been laughable. So just as Congress could not, by making a pound equal to an ounce, lighten a mule’s load by a feather’s weight, neither could it confer upon base metals a value greater than was recognized by the free market.

    Reply
    • Ralph T. Howarth, Jr.
      Ralph T. Howarth, Jr. says:

      Sure adds a whole new meaning to “…fix the Standard of Weights and Measures” when coming down to money…talk about “fixed money”. Inflating the dollar by fiat sure favors the debtor more than the investor; however.

      Reply
  3. Janine Turner
    Janine Turner says:

    I thank you, Dr. Kickler, for joining us and for your insightful essay! What intrigues me is the fact that the Constitution references coin money only. With our founding fathers’ aversion to paper money, it is interesting to ponder upon the fact that Congress may not really have the Constitional authority to print paper money ….
    God bless,
    Janine Turner

    Reply
  4. Jim Reid
    Jim Reid says:

    Excuse me, but… I read Clause 5. Show me where it says that Congress has the EXCLUSIVE right to “coin money,” over other entities operating within the jurisdiction?

    The power of the States to coin money knocks out that notion that Congress takes EXCLUSIVE POWER, even though they were limited to coining ONLY SILVER OR GOLD as money.

    Because of this…if the founding fathers observed that BANKS were coining money and circulating it within the jurisdiction, AND that the system of circulation did NOT impede or prohibit commerce from flowing between one part to another, AND that the
    circulating was NOT commiting utterance…then wouldn’t you suppose the founders would believe that THAT would not interfere with THIS CLAUSE?

    So, Taken with the first four words from Clause 1, can anyone show me WHERE the phrase “shall have power [to…]” mean “shall have EXCLUSIVE power?”

    Since WHEN does “SHALL HAVE POWER” mean “MUST PERFORM” or “MUST ALWAYS PERFORM?”

    Jeanine, or anyone…here’s another question:

    Where is the QUALIFIER WORD that’s supposed to be between COIN and MONEY, in clause 5?

    If it’s supposed to be there….then wouldn’t that regulate WHAT KIND of money from the START, Congress has power to *coin*?

    If you strictly limit “coin” to mean “stamp bits of round metal”…then does that EXCLUSIVELY mean GOLD or SILVER ONLY?

    But…if you expand that meaning to mean “create” or “to *coin* a phrase…”

    Then without that QUALIFIER WORD, then wouldn’t that give Congress the power to coin ANYTHING…even NON-PHYSICAL things as MONEY?

    Such as Entries on a ledger…or a computer database, or even PAPER?

    Or…how about BOTH “domestic” money, as well as “FOREIGN” money?

    Here’s another question Jeanine:

    Where does this clause, or anything in the BASKET CLAUSE, or ANYWHERE ELSE in the Constitution give Congress the EXCLUSIVE RIGHT (over other entities) to SPEND IMMEDIATELY anything it thusly COINS, without causing UTTERANCE themselves?

    That question is probably the reason WHY the Coinage Act was put in place later as a component to this clause.

    For if any NEW MONEY were to be created to circulate here, CONGRESS has to interact with an OTHER to create it…and THAT OTHER had to be the one to be FIRST DISTRIBUTOR of that newly created money.

    So that any NON INVOLVED THIRD PARTY recieving that coin as tender, could know that NEITHER the GOV, nor the OTHER, debauched it…AND, that that COIN was a piece of LAW, that had TANGIBLE ASSET VALUE, per the LAW.

    Aww, heck, Jeanine….even the WANDERING MOOSE has enough brains to figure this out…too bad no one was brave enough to walk up and ask him! What happened to that MOOSE, from your old show? Is he still around…or did he become DINNER?

    Reply

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