Here is what the Constitution says about the federal
authority to coin money in Article 1, Section
8, Clauses 5 and 18:
Congress shall have Power To lay and collect Taxes, Duties,
Imposts and Excises, to pay the Debts and provide for the common Defence
and general Welfare of the United States; but all Duties, Imposts and
Excises shall be uniform throughout the United States;
5 To coin
Money, regulate the Value thereof, and of foreign Coin, and fix the
Standard of Weights and Measures;
18 To make
all Laws which shall be necessary and proper for carrying into Execution
the foregoing Powers and all other Powers vested by this Constitution in
the Government of the United States, or in any Department or Officer
And in Article 1, Section 10 of the U.S. Constitution, we find:
State shall enter into any treaty, alliance, or confederation; grant
letters of marque and reprisal; coin money; emit letters of credit; make
any thing but gold and silver coin a tender in payment of debts;
pass any bill of attainder, ex post facto law, or law impairing the
obligation of contracts, or grant any title of nobility."
pretty basic to us. All money
MUST be gold or silver or it isn’t money.
In spite of this, the federal courts have still managed to sidestep
this requirement and authorize paper money.
The following cite from the case of Mathes
v. Commissioner of Internal Revenue, 576 F.2d 70 (1978) establishes that even though the
Constitution requires all money to be backed by gold, the government can
ignore that requirement completely anyway!
first assert that they have a legal right to choose a lawful method of
reporting income which in their case is to report their income of
"notes" in terms of lawful, statutory dollars. Taxpayers
correctly state that "the legal right of a taxpayer to decrease the
amount of what otherwise would be his taxes, or altogether avoid them, by
means which the law permits, cannot be doubted." Gregory v.
Helvering, 293 U.S. 465, 469, 55 S. Ct. 266, 267, 79 L. Ed. 596 (1935).
However, the method used by these taxpayers to reduce their taxes is not a
Close to a
century ago, the Supreme Court stated:
the power to borrow money on the credit of the United States, and to issue
circulating notes for the money borrowed, [Congress'] power to define the
quality and force of those notes as currency is as broad as the like power
over a metallic currency under the power to coin money and to regulate the
value thereof. Under the two powers, taken together, Congress is
authorized to establish a national currency, either in coin or in paper,
and to make that currency lawful money for all purposes, as regards the
national government or private individuals.” . . . (Emphasis added)
Greenman, 110 U.S. 421, 448, 4 S. Ct. 122, 130, 28 L. Ed. 204 (1884).