Saturday, May 29, 2021

Why is paper money constitutional?

  The official money of the United States today is paper currency. But that’s clearly not what the U.S. Constitution says. It says that gold and silver coins shall be the nation’s currency. 

  How is that possible? I thought the Constitution was supposed to be the highest law of the land. I also thought that it was the responsibility of the U.S. Supreme Court to enforce the Constitution. Why then are Americans living under a paper-money monetary system rather than the system stipulated in the Constitution?

  Article 1, Section 8 of the Constitution gives Congress the power to “coin money.” It is not given the power to print money. Coining money is not printing money. At the risk of belaboring the obvious, coining money entails making coins out of metals.

  The Framers preferred coins made from gold and silver. How do we know this? Because of Article 1, Section 10, which states in part: “No State shall make any Thing but gold and silver Coin a tender in Payment of Debts.”

  It would be difficult to get any clearer than that. So the question naturally arises: Why have the states made paper money a tender in payment of debts, given that the Constitution expressly limits them to making only gold and silver coin legal tender? And why hasn’t the Supreme Court forced the states to comply with the Constitution?

  Equally important, why has the Supreme Court failed to force the federal government to comply with the Constitution? It’s clear that by the language of the Constitution, the Framers, as well as our American ancestors, not only favored gold and silver coins as the official money of the United States but also included the idea in the Constitution itself. Isn’t it the responsibility of the Supreme Court to enforce the Constitution?

  It was President Franklin Roosevelt who, along with his Congress, abrogated America’s founding monetary system. Citing the economic emergency of the Great Depression, Roosevelt and his Congress decreed that America would no longer use gold and silver coins as its official money. Instead,  it would resort to paper money as its official money. 

  Roosevelt then went a step further. He ordered everyone to turn in his gold coins to the federal government. In return, they would receive paper money. Anyone who was caught owning gold coins — which had been the official, legal money of the American people for more than a century — would be criminally prosecuted for a felony.

  There was at least one big problem, however, with Roosevelt’s actions: He didn’t secure a constitutional amendment prior to nationalizing gold and making paper money legal tender. Remember: the Constitution is the highest law of the land. It controls the actions of the president and Congress. The executive and legislative branches cannot amend the Constitution. They are required to comply with the Constitution.

  Moreover, the Constitution does not provide an emergency exception. That means that its provisions remain fully operative and enforceable despite any emergency. 

  Unfortunately, the Supreme Court abrogated its responsibility to enforce the Constitution, which enabled Roosevelt to get away with his monetary power grab. 

  That’s how Americans have come to live under a paper-money system notwithstanding the clear language to the contrary in the Constitution. That’s also how federal officials have been able to confiscate the income and wealth of the American people through decades of monetary debasement.

  About the author: Jacob G. Hornberger is the founder and president of The Future of Freedom Foundation.

  This article was published by The Future of Freedom Foundation.

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