Omar Bennett
The US Constitution grants Congress the power to coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures. This is outlined in Article I, Section 8, Clause 5, also known as the Coinage Clause, which gives Congress the exclusive power to coin money and regulate its value. This clause was interpreted by the Supreme Court as giving Congress the sole authority to regulate every aspect of US currency. The central government's inability to enforce a common currency was one of the reasons why America's first constitution failed, with states conducting their own foreign policies and possessing their own money systems, making trade between states and other countries challenging.
| Characteristics | Values |
|---|---|
| Article | I |
| Section | 8 |
| Clause | 5 |
| Powers regarding currency | To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures |
| Powers regarding counterfeiting | To provide for the punishment of counterfeiting the securities and current coin of the United States |
| Powers regarding commerce | To regulate commerce with foreign nations and between the several states |
| Powers regarding credit | To borrow money on credit for the United States |
| Powers regarding interpretation | The Supreme Court has interpreted Clause 5 as giving Congress the sole authority to regulate every aspect of United States currency |
| Powers regarding banks | Congress may charter banks and endow them with the right to issue circulating notes |
| States' powers | States can punish people or entities that use counterfeit money |
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What You'll Learn
States can't issue bills of credit or use non-gold/silver coins as legal tender
Article I, Section 10 of the US Constitution explicitly prohibits states from issuing "bills of credit" and coining their own money. This section also prevents states from using anything other than gold or silver coins as legal tender. The Constitution grants Congress the exclusive power to coin money and regulate its value, as outlined in Article I, Section 8, Clause 5, also known as the Coinage Clause.
The Supreme Court has interpreted this clause broadly, giving Congress the authority to regulate all aspects of US currency. This includes the power to charter banks and regulate the circulation of currency. The Court has also ruled that the counterfeiting clause does not limit the power of the states, allowing them to punish the use of counterfeit money.
Despite these constitutional provisions, several states have taken steps toward recognizing gold and silver as legal tender. For example, Utah passed the Utah Legal Tender Act in 2011, becoming the first state to declare US-minted gold and silver coins as legal tender. Other states, such as West Virginia, Oklahoma, and Louisiana, have also passed legislation exempting sales tax on gold and silver currency or recognizing these metals as legal tender.
These state-level actions indicate a growing trend toward accepting precious metals as a form of payment, diversifying away from paper currency. However, it is important to note that the Constitution still grants Congress the primary power over currency regulation, including the authority to punish counterfeiting and maintain the purity of the constitutional currency.
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Congress can set up a mint and coin money
The Articles of Confederation, which preceded the United States Constitution, created a very weak central government. Each state had its own money system, which made trade between states and other countries extremely difficult. This was one of the reasons why the Constitutional Convention of 1787 was held, leading to the creation of the United States Constitution.
Article I, Section 8, Clause 5 of the Constitution, also known as the Coinage Clause, gives Congress the exclusive power to coin money. It states that "The Congress shall have Power [...] To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures". This power has been interpreted broadly, allowing Congress to regulate every aspect of United States currency.
In addition to coining money, Congress can charter banks and authorize them to issue circulating notes. They can also impose taxes on the circulation of notes from state banks or municipal corporations, and require the exchange of gold coins and certificates for other currency. These powers give Congress significant control over the monetary system and allow them to regulate the value of money.
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Congress can specify the value of money
The United States' first constitution had several shortcomings, including the fact that states had their own money systems and there was no common currency, which made trade within the states and with other countries extremely difficult. The central government and the states each had separate money, and the government lacked the power to tax. This led to an economic crisis by 1787.
The current constitution grants Congress the power to coin money and regulate the value thereof. This power has been interpreted broadly, allowing Congress to regulate every phase of the subject of currency. Congress can specify the value of money by:
- Authorizing the regulation of every phase of the subject of currency. This includes the power to charter banks and endow them with the right to issue circulating notes.
- Restraining the circulation of notes not issued under its authority. Congress may impose a prohibitive tax on the circulation of notes of state banks or municipal corporations.
- Requiring the surrender of gold coin and gold certificates in exchange for other currency not redeemable in gold.
- Making Treasury notes legal tender in satisfaction of antecedent debts and abrogating clauses in private contracts calling for payment in gold coin.
- Passing federal laws that punish the importation and use of counterfeit money, including the circulation of counterfeit coins and the possession of equipment used to make them.
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Congress can charter banks and regulate currency
The United States' first constitution had several shortcomings, including the fact that states had their own money systems and there was no common currency, which made trade within the states and with other countries challenging. The central government and the states had separate money, and the government lacked the power to tax, leaving the United States in an economic crisis by 1787.
The current US Constitution grants Congress the power to regulate currency and charter banks. Article I, Section 8, Clause 5, also known as the Coinage Clause, gives Congress the exclusive power to "coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures." This clause has been interpreted by the Supreme Court as giving Congress the sole authority to regulate every aspect of US currency.
Congress can establish a mint and coin money, specifying the denomination and identifier of each coin. They can also post a list of coin prices in foreign exchange. Additionally, Congress has the power to charter banks and endow them with the right to issue circulating notes. They can impose taxes on the circulation of notes from state banks or municipal corporations, and require the surrender of gold coins and certificates in exchange for other currency.
The Constitution also empowers Congress to pass federal laws that punish the use and importation of counterfeit money. The counterfeiting clause, Article I, Section 8, Clause 6, authorises Congress to provide for the punishment of counterfeiting US securities and current coin. The Supreme Court has ruled that this clause does not limit the power of the states, and states can indeed punish those who use counterfeit money.
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States can punish counterfeiters
The Constitution grants Congress the power to "provide for the Punishment of counterfeiting the securities and current coin of the United States." This provision gives Congress the authority to punish those who produce or issue counterfeit copies of legal tender.
While Congress can pass federal laws to punish the use and importation of counterfeit money, the Supreme Court has ruled that the counterfeiting clause does not limit the power of individual states. States retain the right to punish people or entities that use counterfeit currency.
In the case of United States v. Marigold (1850), the Court affirmed Congress's ability to coin money and protect the purity of the nation's currency. This power includes the authority to regulate commerce and exclude subjects within the sphere of commercial regulation.
Federal laws outline various penalties for counterfeiting offenses, including fines, imprisonment, or both. These penalties aim to deter and punish individuals who engage in counterfeiting activities, such as falsely making, forging, or counterfeiting obligations or securities of the United States with the intent to defraud.
The power to punish counterfeiters is essential to maintaining the integrity of the nation's currency and preventing fraud.
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Frequently asked questions
Before the US Constitution, states had their own money systems, which made trade between states and other countries extremely difficult.
The US Constitution gave Congress the exclusive power to coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures.
Article I, Section 8, Clause 5 of the US Constitution is known as the "coining clause" or coinage clause. It gives Congress the power to coin money and regulate the value of foreign coin.
The "counterfeiting clause" is related to Congress's power to coin money. It gives states the power to punish people or entities that use counterfeit money.
