Veritas News Service and CAJI/IS Exclusive
by guest columnist Johnathan Masullo
WHAT IS ‘CONSTITUTIONAL’ MONEY?
“Paper is poverty . . . it is only the ghost of money, and not money itself.”1
Thomas Jefferson (1743 – 1826)
There is a lot of discussion regarding money in the world today. Some powers-that-be are calling for a one world currency or global money.2 Economic stresses are caused by an assortment of influences, but money has the greatest weight in fiscal traumas. By means of bartering,3 two individuals will substitute one item for another. For example, A has tomatoes and B has wool. A would like some wool and B would like some tomatoes; therefore, A and B will negotiate a deal. Both parties will determine the value of their product, which is to say, X amount of tomatoes for X amount of wool and vice versa. Bartering is an admirable method; however, it has limitations. For instance, what if B did not need tomatoes? What would A give B in return?
To solve this problem, man devised a medium of exchange that would be common to all people, i.e., money. What is money? Money is defined as “the circulating medium.”4 Historically speaking, man used various forms of money. Some civilizations circulated sticks, coins, gems, paper, and the like. Money is the genus whereas sticks, coins, etc. are the species. Mr. J.J.S. Wharton enlightens, “Strictly speaking, coin differs from money, as the species differs from the genus. Money is any matter, whether metal, paper, beads, shells, etc., which has currency as a medium in commerce. Coin is a particular species, always made of metal, and struck according to a certain process called coining.”5
The Constitution of the United States of America6 unambiguously states that the Congress shall be the money power. Congress has the delegated power “[t]o coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures.”7 What does this mean? Mr. James Madison (1751 – 1836) tells us the following:
All that need be remarked on the power to coin money, regulate the value thereof, and of foreign coin, is, that by providing for this last case, the Constitution has supplied a material omission in the articles of Confederation. The authority of the existing Congress 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 punishment of counterfeiting the public securities, as well as the current coin, is submitted of course to that authority which is to secure the value of both. The regulation of weights and measures is transferred from the articles of Confederation, and is founded on like considerations with the preceding power of regulating coin.8
The founding fathers understood the significance of coin as money. Coin is tangible, valuable, and brings prosperity to the people. In other words, coin is sound money. Mr. Jefferson accurately stated, “Experience has proved to us that a dollar of silver disappears for every dollar of paper emitted.”9 Again, only the Congress possesses the delegated money power, neither the President, nor the Supreme Court, nor the several States. However, the several States may make gold and silver a legal tender in payment of debts.10
What is coin? Coin, as a noun, is defined as “[p]ieces of gold, silver, or other metal, fashioned into a prescribed shape, weight, and degree of fineness, and stamped by authority of government with certain marks and devices, and put into circulation as money at a fixed value.”11 This coin would pay tribute to the prosperity of the people of these United States. No civilization achieved the economic wealth and success as the people of these United States. This was possible owing to sound money issued interest-free and debt-free by the Congress to the people to use in their business. As we know through uncovered history, there were some individuals, one in particular, Mr. Alexander Hamilton (1755 – 1804), who wanted to destroy the ‘constitutional’ money of these United States since the inauguration. Why would said individuals commit such an act? For the reason that sound, interest-free, debt-free money is a threat and a rivalry to private money interests.
Banking institutions, paper money, and paper speculation destabilize the firmness of any nation. This is why the founding fathers delegated the money power to the General Government, exclusively, the Congress. The previously mentioned could be a danger in time of war too. The Constitution does not delegate to the Congress to establish a national or ‘centralized’ bank. The money supply is to be controlled by the Congress, which is closer to the people of these United States, and only Congress than by trusting it to private hands. Alas, private money interests won their authority, with the help of Mr. Hamilton, to establish the first (and many to come) centralized bank, i.e., the First Bank of the United States.12
Some people quarrel, “While Congress is delegated with the power to coin money, it is implied that the Congress may establish a national bank.” The reader can see the irrationality in said disagreement. There are no implied powers in the Constitution. Such people believe the Constitution to be a “living document.”13 The Constitution is precise and one does not need a Doctor of Juris to understand it.14 Mr. Jefferson confirms that the Congress, or any governmental power for that matter, is not delegated to establish a central bank, saying, “The incorporation of a bank and the powers assumed [by legislation doing so] have not, in my opinion, been delegated to the United States by the Constitution. They are not among the powers specially enumerated.”15
Coin, as a verb and seeing that used in the Constitution, means “[t]o fashion piece of metal into a prescribed shape, weight, and degree of fineness, and stamp them with prescribed devices by authority of government, in order that they may circulate as money.”16 The metal may be gold, silver, copper, nickel, lead, platinum, and so forth. The founding fathers knew metals, especially precious metals, have value and they will never drop to the value of zero; therefore, the founding fathers elected to have coin as our money. The founding fathers saw the dangers of paper money. Mr. Jefferson noted, “The trifling economy of paper, as a cheaper medium, or its convenience for transmission, weigh nothing in opposition to the advantages of the precious metals . . . it is liable to be abused, has been, is, and forever will be abused, in every country in which it is permitted.”17
The author will acknowledge that paper money has some advantages. Paper money is lighter, is less bulky, and is easier to convey. Can the reader imagine carrying around a sack of gold and silver coins? Which would be lighter and easier to transmit? Coin or paper? Though there are some advantages to paper money, its abuses also are inevitable and, by breaking up the measure of value, make a lottery of private property cannot be denied. The private money powers know very well how to manipulate markets by the use of paper money. This is why sound, interest-free, debt-free money, like coin and issued by authority of the government, is a menace to their power. Coin money frees the people and it warrants affluence. Mr. Jefferson, along with other founding fathers, warned us about the heavy pressures of banks, of paper money, and of paper speculation, saying, “I sincerely believe . . . that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.”18
What is the solution? The author recommends the reader to do the following: 1) study the history of central banking in these United States; 2) study the history of money and its assorted species; 3) understand why the founding fathers designated coin as money; 4) read the Federalist and anti-Federalist papers regarding money, economic, and banking issues (after all, what they faced then we are facing now); 5) educate your fellow Americans regarding aforesaid issues (start locally–everything starts at the local level, not top-down–by doing so will have a trickle effect); 6) read Economics in One Lesson by Henry Hazlitt; and 7), which is obvious, read, understand, and apply the Constitution. There is another recommendation, which is optional considering it is dirty business, but also helpful in restoring our republic, pursue public office (preferably local level and step up the ladder). Having like-minded individuals in public office will increase chances. The author believes if the reader industriously follows the recommendation, then we the people of these United States will end the Federal Reserve and will refurbish constitutional money and our republic.
1 Thomas Jefferson to Edward Carrington, 1788. ME 7:36
2 “Currency Experts World First Say Single Global Currency ‘Far from Reality’.” Market Watch. Market Watch, 2 Feb 2012. Web. 16 Feb 2012. <http://www.cbsnews.com/8301-504383_162-5298305-504383.html>.
3 “The act or practice of trafficking by exchange of commodities; sometimes, perhaps, the thing given in exchange.” Webster, Noah. “Barter.” An American Dictionary of the English Language. 1st ed. Vol. I. New York, NY: S. Converse, 1828. Print.
4 Black, Henry Campbell. “Money.” A Law Dictionary. 1st ed. St. Paul, MN: West Publishing Company, 1891. Print.
5 Wharton, J.J.S., and J.M. Lely. “Coin.” Wharton’s Law-Lexicon. 7th ed. Boston, MA: Soule and Bugbee, 1883. Print.
6 While there is no official title of the Constitution, scholars often use the last phrase of the preamble.
7 Article 1, Section 8, Clause 5, Constitution of the United States of America
8 Federalist No. 42
9 Thomas Jefferson to James Monroe, 1791. ME 8:208
10 “No State shall . . . make any Thing but gold and silver Coin a Tender in Payment of Debts.” Article 1, Section 10, Clause 1, Constitution of the United States of America
11 Black, Henry Campbell. “Coin.” A Law Dictionary. 1st ed. St. Paul, MN: West Publishing Company, 1891. Print.
12 The first centralized bank was issued a twenty year charter.
13 While the phrase “living document” is of modern origin, history teaches us that many unconstitutional acts and legislation occurred owing to presumptions or disregard of the Constitution completely.
14 To make this point valid, the author encourages the reader to study the story of the farmer and David “Davy” Crockett (1786 – 1836). Mr. Crockett campaigned to gain support from his constituents regarding an unconstitutional legislation. A farmer educated Mr. Crockett in his district. The farmer articulated to Mr. Crockett that his proposed legislation is not enumerated in the Constitution, but properly left to the several States to decide. Mr. Crockett left in shame. The Constitution was written for the common man, not for politicians, not for attorneys, and not for judges. Sadly, most people today do not understand the Constitution, let alone, read it.
15 Thomas Jefferson: Opinion on Bank, 1791. ME 3:146
16 Black, Henry Campbell. “Coin.” A Law Dictionary. 1st ed. St. Paul, MN: West Publishing Company, 1891. Print. The author also encourages the reader to study the Legal Tender Cases.
17 Thomas Jefferson to John W. Eppes, 1813. ME 13:430
18 Thomas Jefferson to John Taylor, 1816. ME 15:23