reply to post by Whereweheaded
Sources: Federalist Papers
Now wait, you stated that Gold and Silver are prohibited which is exactly opposite of what is stated in the Constitution.
Article I is what Congress can and cannot do. It is the powers enumerated to them or lack thereof. In Section 10, it lays out what the State's
cannot do. It was put in to ensure that the States and the Federal Government did not conflict upon certain powers.
Federalist Paper 42 explains the reasoning behind the powers enumerated within Article I, Section 8 as follows:
The authority of the existing Congress [given by the Articles of Confederation] is restrained to the regulation of coin STRUCK by their own
authority, or that of the respective States. It must be seen at once 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.
The sole reason was for uniformity and protection of an American currency. So that States could not arbitrarily devalue their currency or inflate it
and cause a disruption in Interstate Commerce or Foreign Commerce.
It does not state the Gold and Silver are the only legal tender nor does it state they are prohibited from use.
Further they explicitly state in Article I, Section 10 that the States are prohibited from using anything other than Gold or Silver in their debts.
We find the explanation behind this provision in Federalist Paper 44. Stating as follows:
Had every State a right to regulate the value of its coin, there might be as many different currencies as States, and thus the intercourse among
them would be impeded; retrospective alterations in its value might be made, and thus the citizens of other States be injured, and animosities be
kindled among the States themselves. The subjects of foreign powers might suffer from the same cause, and hence the Union be discredited and embroiled
by the indiscretion of a single member. No one of these mischiefs is less incident to a power in the States to emit paper money, than to coin gold or
silver. The power to make any thing but gold and silver a tender in payment of debts, is withdrawn from the States, on the same principle with that of
issuing a paper currency.
Again, this was to create solidarity not only among the equal States, but also to give credibility of a new American currency to the rest of the
world. The States were limited in paying their debts via gold or silver.
This of course was all blown out of the water when we went off the gold standard and backed our currency upon the GDP of the economy.
Lastly, there is no reference to what or how the People must use because that was not the job nor intent of the Congress. The People are able to
determine what they feel to be legal tender for their goods and services when dealing in private contracts.
States = gold and silver must be used to back their debts.
Federal Government = is given no standard on which they can even use to back their monies. They have the open power to determine what that money is
standing on. The key word though is very well "Coin".
To usages of the word:
: to make (coinage) by stamping metal
: to convert (metal) into coinage
They feared going to a paper money. It has no value except the paper it is printed on. We accept it as tender because most have faith in that
backing. Yet here we all are, in one of the places those that created this country feared the most. Fiat currency with a perception of backing and
edit on 6-12-2010 by ownbestenemy because: Added link to Federalist Papers