What Is A "Dollar"?
An Historical Analysis Of The Fundamental Question In Monetary Policy
Edwin Vieira, Jr.
Today, all thinking, informed Americans know
their country is in trouble. Many haven't a clue as to what went wrong with
their government, while others can recite a litany of reasons for their
country's distress. Of course, no one reason is paramount; but surely a
debased, corrupt, and inflationary monetary system must be placed near the top
of the list of causes of America's woes.
What To Do About It?
This Monograph presents, in irrefutable
fashion, the legal and economic history of the "dollar,” and of the
"dollar's" role in America's monetary system, as originally devised
by the Founding Fathers. It also analyzes the Coinage Act of 1792, signed into
law by President Washington, which put into effect the monetary system the
Founders had previously outlined in the Constitution.
This system helped make the United States
"dollar" the safest, most sought-after currency in the world, leading
to the well-known saying "sound as a dollar.” However, in 1913, Congress -
in an unconstitutional act - relinquished its constitutional power and duty to
"coin Money and regulate the Value thereof" to a private banking
cartel, the Federal Reserve System.
The ensuing years witnessed a gradual
abandonment of the Founding Fathers' system (based on silver and gold coins)
and the insidious substitution of a paper-currency system based on
irredeemable, fiat Federal Reserve Notes, which continue to circulate
today only because of the public's misplaced confidence.
What to do about it? is the question.
Obviously, the Federal Reserve System's experiment with fiat currency
has failed. But we cannot have a sound economy without sound money. That means
we must return to a monetary system based on silver and gold coins - as the
Founding Fathers wisely specified. This will require action by Congress to
rectify its mistake of 1913, by abolishing the Federal Reserve System and reaffirming
the "dollar" as a coin containing 371.25 grains (troy) of fine
We know that Congress will take no such
action on its own initiative. Congress will move only when the general public
becomes aware of, and incensed by, the monetary mess Congress and the Federal
Reserve System have created. Therefore, everyone concerned with "the money
issue" must bring the facts to the attention of as many Americans as
This Monograph contains more than enough
documentation to convince anyone of good faith and an open mind of what a
"dollar" is. This documentation should be used in every possible way
to generate public debate on the money issue: letters to the editor, call-ins
to radio talk shows, local citizens' meetings, and so on. All these offer opportunities
to present powerful arguments for a restoration of the constitutional monetary
system, and to wrest the initiative in the public forum away from the Federal
Reserve System and its apologists.
As the Monograph concludes, "modern
money has become a means for the total confiscation of private property by the
government.” It is, therefore, incumbent on those of us who understand this
issue to make the truth known to others. Nothing could be more vital than to
restore the monetary system with a proven track record: the one devised by our
Richard L. Solyom, Chairman
Sound Dollar Committee
What Is A "Dollar"?
The question "What is a 'dollar'?"
may seem trivial. Everyone knows what a "dollar" is - or, at least
almost everyone thinks he does. In fact, however, very few people could
correctly define a "dollar.” And even fewer know why a correct definition
is vital to their continued economic and political well-being.
1. Why is a correct definition of the term
The United States has a highly advanced
free-market economy. In a free- market economy, the prices of almost all goods
and services are stated in units of money. Under present law - and, as will be
described below, from the very beginnings of this country - "United States
money is expressed in dollars * * * .”1 Moreover, all "United States coins and currency
(including Federal Reserve Notes * * *) are legal tender for all debts, public
charges, taxes and dues.”2 Thus, all "coins and currency (including Federal
Reserve notes * * * )" that are "expressed in dollars" are both
money and legal tender. For this reason, accurately defining the noun
"dollar" is mandatory, in order to know what is supposedly the
official "Money" of the United States and what constitutes
"legal tender for all debts, public charges. taxes and dues.”3
2. Do the present monetary statutes
intelligibly define the "dollar'"?
Unfortunately, the present monetary statutes
do not define the "dollar" in an intelligible fashion.
a. Federal Reserve Notes. Most people associate the noun "dollar" with
the Federal Reserve Note ("FRN") "dollar bill,” engraved with
the portrait of President George Washington. This association is mistaken.
No statute defines - or ever has defined -
the "one dollar" FRN as the "dollar,” or even as a
species of "dollar.” Moreover, the United States Code provides that
FRNs "shall be redeemed in lawful money on demand at the Treasury
Department of the United States * * * or at any Federal Reserve bank.”4 Thus, FRNs are not themselves "lawful
money" - otherwise, they would not be "redeemable in lawful money.”
And if FRNs are not even "lawful money,” it is inconceivable that they are
somehow "dollars,” the very units in which all "United States money
People are confused on this point because of
the insidious manner in which FRNs "evolved" - actually, degenerated
is a more appropriate verb - from the late 1920s until today. FRNs of
Series 1928 through Series 1950E carried the obligation "The United States
of America will pay to the bearer on demand [some number of] dollars.” Prior to
1934, the notes carried the inscription "Redeemable in gold on demand at
the United States Treasury, or in gold or lawful money at any Federal Reserve
Bank.” After 1934, the notes carried the inscription "this note * * * is
redeemable in lawful money at the United States Treasury, or at any Federal
Reserve Bank" (post-1934). Starting with Series 1963, the words
"will pay to the bearer on demand" no longer appear; and each FRN
simply states a particular denomination in "dollars.”
With and after Series 1963, the promise of
redemption also vanished from the face of each note.6 Thus, on their faces FRNs became, in the apt
description of banking expert John Exter, an "I.O.U. Nothing"
currency. This change in the mere language printed on FRNs could not transform
their legal character, however. If FRNs were not "dollars" when they
explicitly promised to pay in gold or "lawful money,” they did not
magically become "dollars" when they stopped explicitly promising to
pay in anything at all.7
b. United States coins. The situation with coinage is more complex, but
equally (if not more) confusing. The United States Code provides for
three different types of coinage denominated in "dollars": namely,
base- metallic coinage, gold coinage, and silver coinage.
(1) The base-metallic coinage consists of
"a dollar coin,” weighing "8.1 grams,” "a half dollar coin,”
weighing "11.34 grams"; "a quarter coin,” weighing "5.67
grams": and "a dime coin,” weighing "2.268 grams.”8 All of these coins are composed of copper and nickel.9 The weights of the dime, the quarter, and the half
dollar are in the correct arithmetical proportions, the one to each of the
others.10 But the "dollar" is disproportionately
light (or the other coins disproportionately heavy). In this series of base
metallic coins, then, the questions naturally arise: Is the "dollar"
a cupro-nickel coin weighing "8.1 grams"? Or is it two cupro- nickel
coins (or four or ten coins) collectively weighing 22.68 grams? Or is it both?
Or is it neither, but something else altogether, to which the weights of these
coins are irrelevant?
(2) Similarly, the gold coinage consists of
"[a] fifty dollar gold coin" that "weighs 33.931 grams, and
contains one troy ounce of fine gold"; "[a] twenty-five dollar gold
coin" that "contains one-half ounce of fine gold"; "[a] ten
dollar gold coin" that "contains one fourth ounce of fine gold";
and "[a] five dollar gold coin" that "contains one tenth ounce
of fine gold.”11 The "fifty dollar,” "twenty-five dollar,”
and "five dollar" coins are in the correct arithmetical proportions
each to the others. But the "ten dollar" coin is not. Therefore, is a
"dollar" one-fiftieth or one-fortieth of an ounce of gold? Or both?
And what is the logical, economic, or other
relationship between a "dollar" that contains "8.1 grams"
of copper and nickel, and a "dollar" that consists of 0.679 grams of
(3) Finally, the silver coinage consists of a
coin that is inscribed "One Dollar,” weighs "31.103 grams,” and is
supposed to contain one ounce of .”999 fine silver.”13
What is the rational relationship between
this "dollar" of "31.103 grams" of ".999 fine silver,”
a "dollar" containing 0.679 grams of gold alloy, and a
"dollar" containing "8.1 grams" of base metals? Obviously,
these are not the amounts of the metals that exchange against each other in the
free market - that is, the different weights of different metals do not reflect
equivalent purchasing powers. So, on what theory are each of these disparate
weights, and purchasing powers, equally "dollars"?
c. Currency of "equal purchasing
power" The United States Code
provides no answer to this perplexing question. Indeed, it mandates that
the question should not even be capable of being asked. For the Code commands
that "the Secretary [of the Treasury] shall redeem gold certificates owned
by the Federal reserve banks at times and in amounts the Secretary decides are
necessary to maintain the equal purchasing power of each kind
of United States currency.14
One need be no expert in currency
transactions to know that a "fifty-dollar" gold coin has
significantly more purchasing power than a "fifty-dollar" FRN or than
fifty cupro-nickel "dollars,” and that a "one-dollar" silver
coin has significantly more purchasing power than a "one-dollar" FRN
or one cupro-nickel "dollar.” Thus, one need be no expert in
administrative law to realize that the Secretary of the Treasury has defaulted
on his obligation to keep allforms of "United States currency" at
parity with each other - that is, to maintain a "dollar" of the same
purchasing-power, whether it be composed of gold, silver, or base metals.
The Secretary's default cannot be traced to a
lack of power to perform his duty. For example,
"With the approval
of the President, the Secretary of the Treasury may - (A) buy and sell gold in
the way, in amounts, at rates, and on conditions the Secretary considers most
advantageous to the public interest; and (B) buy the gold with any direct
obligations of the United States Government or United States coins and currency
authorized by law * * *."15
"The Secretary may buy silver mined from natural deposits in the United
States that is brought to a United States mint or assay office within one year
after the month in which the ore from which it is derived was mined."16
"The Secretary may
sell or use Government silver to mint coins * * * . The Secretary shall sell
silver under conditions the Secretary considers appropriate for at least
$1.292929292 a fine troy ounce."17
"Except to the
extent authorized in regulations the Secretary of the Treasury prescribes with
the approval of the President, the Secretary may not redeem United States
currency (including Federal reserve notes * * *) in gold. * * * When redemption
in gold is authorized, the redemption may be made only in gold bullion bearing
the stamp of a United States mint or assay office in an amount equal at the
time of redemption to the currency presented for redemption."18
Thus, the United States Code simply
presents another unanswered question: "Why has the Secretary of the
Treasury failed 'to maintain the equal purchasing power of each kind of United
In sum, the present monetary statutes of the
United States do not define the noun "dollar" in an unique way.
Instead of monetary law - which, by hypothesis, requires clearly defined
terms and rational relationships among those terms - the country's present
monetary code smacks of political psychosis - in which completely
different things have the same name, things unequal to each other are treated
as equivalent, and things that should have the same characteristics (e.g.,
"equal purchasing power[s]") are quite different.
3. What do American history and the
Constitution identify as the "dollar"?
Reference to history clears away the
confusion of present-day politics, by showing beyond cavil that the
"dollar" is a specific coin, containing 371.25 grains (troy) of fine
silver, and nothing else.
a. The "dollar" in the
Constitution. Both Article 1, Section
9, Clause 1 of and the Seventh Amendment to the Constitution refer
explicitly to the "dollar" - in the one case, permitting "a Tax
or duty * * * not exceeding ten dollars for each Person" the States saw
fit "to admit" prior to 1808; and, in the other, guaranteeing trial
by jury "[i]n suits at common law, where the value in controversy shall
exceed twenty dollars.” The Constitution does not define this
"dollar.” But, in the late 1700s, no explicit definition was necessary:
Everyone conversant with political and economic affairs knew that the word
imported the silver Spanish milled dollar.
Indeed, had not such an understanding been
catholic, powerful contending forces might never have agreed to support the Constitution
at all. For example, the traditional interpretation of Article 1, Section 9,
Clause 1 is that it elliptically refers to the slave-trade, and represents a
compromise between pro- and anti-slavery forces that was vital to
ratification of the Constitution.19
Self-evidently, those in the pro-slavery faction would never have accepted the
"Tax or duty" phrase unless they already knew that the
"dollar" identified as the measure of the "Tax" had a fixed
value, and what its value was. Otherwise, by monetary manipulation aimed at
increasing the purchasing-power of the "dollar,” anti-slavery
forces in Congress might have eliminated the slave-trade altogether.
Similarly, the proponents of the fundamental
right to jury-trial in the Seventh Amendment would never have accepted the
"dollar"-limitation on jury- trials unless they already knew that the
"dollar" had a fixed value, and what its value was. Otherwise,
monetary manipulation might have eliminated common-law juries altogether. Yet
both these groups also were aware of the doctrine that, if Congress had
discretion to change the value of the unit of money, there could be no legal
limits to the changes it might make.20 Therefore,
their support of these provisions inferentially establishes what a literal
reading of them straightforwardly suggests: to wit, that the noun
"dollar" refers, not to a mere name applicable to whatever Congress
whimsically might decide thereafter to call a "dollar,” but instead to a
particular coin so familiar in American experience as to be beyond political
An interpretation of the term
"dollar" as signifying merely the label the Constitution gives
to whatever Congress decides to make the unit of money, if consistently applied
to other undefined terms in the document, would render the Constitution
nonsensical. For example, the noun "Year" appears repetitively in
Article I - particularly in Section 2, Clause 1 ("The House of
Representatives shall be composed of Members chosen every second Year"),
and Section 3, Clause I ("The Senate of the United States shall be
composed of two Senators from each State, chosen by the Legislature thereof,
for six Years").
Self-evidently, the Framers used this term
with the presumption that everyone would implicitly understand it to mean the
time the earth actually requires for one complete revolution around the sun -
rather than a mere empty shorthand for a unit of time within the discretion of
Congress to adopt or change. Yet, if the word "dollar" need have no
fixed, historically ascertainable meaning, neither need the word "Year.”
The principle of constitutional interpretation is precisely the same in both
cases. And if the noun "Year" need have no meaning more fixed than
the noun "dollar" does in present-day monetary statutes (as discussed
above), then Congress could enact laws "redefining" the
"Year" so as to extend, for instance, the terms of the House and
Senate to ten, twenty, one hundred, or any other number of earthly revolutions.
Of course, Congress may, with constitutional
propriety, appoint astronomers, physicists, and other qualified experts to
determine with scientific precision what the "Year" actually is.
Congress lacks authority, however, to decide for itself what the "Year"
ought to be, or to declare the "Year" to be whatever Congress may
arbitrarily desire from time to time. Analogously, Congress may, with
constitutional propriety, appoint economists, monetary historians, and other
experts to determine with clinometric accuracy what the "dollar"
actually was in the late 1700s. In fact, this is what Congress did do, under
both the Articles of Confederation and the Constitution (as described
below). Congress has no authority, however, to decide for itself what the
"dollar" ought to be.
Besides constitutional history and logic,
economic analysis and history support an interpretation of the noun
"dollar" as referring to a specific thing the character of which was
an ascertainable historical fact that Congress was obliged to determine, rather
than as constituting merely a political label that Congress could assign to
whatever it deemed expedient. The nominalistic view that would treat the term
"dollar" as simply a convenient, historically vacuous term for
whatever Congress chooses to declare to be "money,” and set up as the
"unit of value,” is incapable of answering the question: "What is an
abstract 'unit of value'?,” and passes over in silence the question:
"Before ratification of the Constitution, was the 'dollar'
something that it ceased to be thereafter?"
Economically, of course, "abstract"
(or "objective") value does not exist, in monetary matters or
elsewhere. In general, the notion that value is objective is "[a]n
inveterate fallacy"; and the allied concept that value is measurable in
terms of some definedly fixed unit is a "spurious idea.” Simply put,
"[t]here is no method available to construct a unit of value.” More
specifically, "money is not a standard for the measurement of prices; it
is a medium whose exchange ratio varies in the same way * * * in which the
mutual exchange ratios of the vendible commodities and services vary.”
Furthermore, money can never arise ex nihilo. "The acceptance of
anew kind of money presupposes that the thing in question already has, previous
exchange value on account of the services it can render directly to consumption
or production."21 In short, no governmental edict can make something
with no previously existing purchasing power either a "unit of value,” or
"money" in the economic sense.
Prior to ratification of the Constitution,
no one conversant with economics and commercial practices conceived of monetary
values as abstractions. Rather, "money" was generally synonymous with
known weights of the precious metals, gold and silver, and (to a lesser degree)
the base metals, such as copper. In particular, Anglo-American monetary history
records that merchants traditionally tendered and accepted coins, the standard
monetary instruments of the times, not by tale without consideration of those
coins' qualities. but only as pieces of precious metal of specific weights and
Where commercial practice accepted payment of
coins by tale, it was always with the definite belief that those coins' stamps
assured them to be of the correct weights and usual fineness for their types.
Absent grounds supporting this assumption, merchants regularly resorted to
weighing and chemical analyses. Thus, commercial practice always insisted that
the "value" of coins was not their face-values as abstract
governmental tokens, but only their market-values as pieces of actual metal.
And whenever circumstances indicated that a stamp no longer reflected a coin's
physical content, merchants ceased relying on the official monetary
"value,” and substituted their own system for measuring the coin's
market-worth in precious metal.
From an early day, the law applicable to
America conformed to this age- old commercial understanding. Queen Anne's
Proclamation of 1704, for example, spoke not of abstract values, but of "the
value of * * * coins which usually pass in payment in our said plantations [in
America], according to their weight, and the assays made of them in
our mint,” and specifically referred to the "Sevil, Pillar, or
Mexico pieces of eight" (various forms of Spanish silver dollars) as
having "the full weight of seventeen penny-weight and an half"
- thereby recognizing that the value" of a coin lay in its
"weight" and "assay" according to a fixed standard, or
Thus, at the time of ratification of the Constitution,
no person with any understanding of law and monetary affairs would have
attributed to the noun "dollar" a meaning other than (for example):
"a silver coin with a value of such-and-so grains of precious metal when
at full weight.”23
b. Adoption of the "dollar" as
the unit of money prior to ratification
of the Constitution. The actions of the Continental Congress itself prove
that the foregoing analysis is correct.
The Founding Fathers did not need explicitly
to adopt the "dollar" as the national unit of money or to define that
noun in the Constitution - because the Continental Congress had already
performed that task.
I. Use of the dollar as a standard coin and
monetary unit did not begin with the Continental Congress, however. Monetary
historians generally first associate the dollar with one Count Schlick, who
began striking such silver coins in 1519 in Joachim's Thai, Bavaria. Then
called "Schlickten thalers" or "Joachimsthalers,” the coins
became known simply as "thalers,” which transliterated into
"dollars.” Interestingly, the American Colonies did not adopt the dollar
from England, but from Spain. Under that country's monetary reforms of 1497,
the silver real became the Spanish money-unit, or unit of account. A new coin
consisting of eight reales also appeared.
Variously known as pesos, duros, piezas de
a ocho ("pieces of eight"), or Spanish dollars (because of their
similarity in weight and fineness to the thaler), the coins quickly achieved
predominance in financial markets of the New World because of Spain's
then-important commercial and political position.24 Indeed, by 1704, the "pieces of eight" had
in fact become a unit of account of the Colonies, as Queen Anne's Proclamation
of 1704 recognized, when it decreed that all other current foreign silver coins
"stand regulated, according to their weight and fineness, according and in
proportion to the rate before limited and set for the pieces of eight of Sevil,
Pillar, and Mexico.”25
By the War of Independence, the Spanish
dollar was, for all practical purposes, rapidly becoming the monetary unit of
the American people as a matter of economics. Not surprisingly, the Continental
Congress first used, and then took formal steps to adopt, that dollar as the
nation's standard of value. On 22 May 1776, a Congressional committee reported
on "the value of the several species of gold and silver coins current in
these colonies, and the proportions they ought to bear to Spanish milled
dollars.” And on 2 September of that year, a further committee-report undertook
to "declar[e] the precise weight and fineness of the * * * Spanish milled
dollar * * * now becoming the Money-Unit or common measure of other coins in
these states and to "explai[n] the principles and establish the rules by
which * * * the said common measure shall be applied to other coins * * * in
order to estimate their comparative values.”26
Meanwhile, Congress and its agents were
carefully exploring the basis of, and possible structures for, a national
monetary-system. In his letter to Congress of 15 January 1782, Robert Morris,
Superintendent of the Office of Finance, commented that, "[a]lthough most
nations have coined copper, yet that metal is so impure, that it has never been
considered as constituting the money standard. This is affixed to the two
precious metals [i.e., silver and gold], because they alone will admit of having
their intrinsic value precisely ascertained.” "Arguments are unnecessary
to shew that the scale by which every thing is to be measured ought to be as
fixed as the nature of things will permit,” wrote Morris, concluding
that"[t]here can be no doubt therefore that our money standard ought to be
affixed to silver.” Although Morris personally favored creating an entirely new
standard coin, he recognized that "[t]he various coins which have
circulated in America, have undergone different changes in their value, so that
there is hardly any which can be considered as a general standard, unless it be
In a plan first published on 24 July 1784,
Thomas Jefferson strongly concurred that "[t]he Spanish dollar seems to
fulfill all * * * conditions" applicable to "fixing the unit of
money.” "Taking into our view all money transactions, great and
small," he ventured, "I question if a common measure, of more
convenient size than the dollar, could be proposed." "The unit, or
dollar," he wrote equating the one with the other, "is a known coin,
and the most familiar of all to the minds of people. It is already adopted from
south to north: has identified our currency, and therefore happily offers
itself as an unit already introduced. Our public debt, our requisitions and
their apportionments, have given it actual and long possession of the place of
Yet Jefferson recognized the necessity of
certain practical steps to adopt the dollar as the "Money-Unit":
"If we determine that a dollar shall be our unit, we must then say with
precision what a dollar is. This coin as struck at different times, of
different weight and fineness, is of different values." This, though,
Jefferson saw as a problem for economic science to solve through objective
measurement, not as a matter for politics to dictate according to arbitrary
policy. "If the dollars circulating among us be of every date equal, we
should examine the quantity of pure metal in each, and from them form an
average for our unit. This is a work proper to be committed to the
mathematicians as well as merchants, and which should be decided on actual and
accurate experiments." "The proportion between the value of gold and
silver,” he added, "is a mercantile problem altogether.” Given "[t]he
quantity of fine silver which shall constitute the unit,” and "the
proportion of the value of gold to that of silver,” Jefferson went on, "a
table should be formed * * * classing the several foreign coins according to
their fineness, declaring the worth * * * in each class, and that they should
be lawful tenders at those rates, if not clipped or otherwise diminished.”29
Concluding, he encouraged Congress:
To appoint proper persons
to assay and examine, with the utmost accuracy practicable, the Spanish milled
dollars of different dates in circulation with us.
To assay and examine in
like manner the fineness of all the other coins which may be found in
circulation within these states.
To appoint also proper
persons to enquire what are the proportions between the values in fine gold and
fine silver, at the markets of the several countries with which we are or
probably may be connected in commerce; and what would be a proper proportion
here, having regard to the average of their values at those markets * * * .
To prepare an ordinance
for establishing the unit of money within these states * * * on the * * *
That the money-unit of
these states shall be equal in value to Spanish milled dollar, containing so
much fine silver as the assay * * * shall shew to be contained on an average in
dollars of the several dates in circulation with us.30
Jefferson's cogent and straightforward
analysis of the problem of selecting and defining a unit of money should be
compared - contrasted, really - with the present mishmash of monetary statutes
that leave the definition of the "dollar" in a state of hopeless
First, for Jefferson, the
"unit" was to be "a known coin" that was
"familiar" to the people because it was "already adopted"
in the marketplace. None of the coins that Congress now authorizes - be it of
silver, gold, or base metals - was (before its authorization) a "known coin"
"familiar" to anyone in the United States, even in terms of its
content of metal.
Second, having settled on
the "dollar" as the "unit,” for Jefferson the problem of fixing
the standard "unit" reduced to determining "what a dollar
is" in terms of "the quantity of pure metal" [i.e., silver]
contained in "an average" coin that actually circulated in the
marketplace. Thus, for Jefferson it was not the prerogative of Congress to
create the "dollar" ex nihilo, but the responsibility of
Congress to determine what the "dollar" in common use among the
people actually was. Today's Congress assumes that it may declare anything a
"dollar,” and then impose that ersatz, political pseudo- "dollar"
on the people whether they want it or not.
Third, for Jefferson, to
settle the relative values of silver and gold coins was also a matter of
studying actual economic relationships in the marketplace: to wit, "the
proportion of the value of gold to that of silver" in the various coins in
circulation. For today's Congress, economic relationships between silver and
gold are irrelevant. And, of course, there is no rational economic relationship
between the coins of base metals and the coins of precious metals, either.
Moreover, even within the sets of gold and base-metallic coins themselves,
rational economic relationships are irrelevant to Congress!
Obviously, Jefferson's free-market,
scientific approach is a world apart from the arbitrary way in which Congress
has set up the mutually incompatible and internally irrational sets of silver,
gold, and base- metallic coins that exist today.
On 13 May 1785, a committee presented
Congress with "Propositions Respecting the Coinage of Gold, Silver, and
Copper,” which referred to the "Plan which proposes that the Money Unit be
One Dollar.” "In favor of this Plan,” the committee reported, is
"that a Dollar, the proposed Unit, has long been in general Use. Its Value
is familiar. This accords with the national mode of keeping Accounts.” Later,
the report referred to the "dollar" as the "Money of Account,”
thereby equating that term with the term "Money-Unit.”31
On 6 July 1785, Congress unanimously "Resolved,
That the money unit of the United States be one dollar.”32 Almost another year elapsed until, on 8 April 1786,
the Board of Treasury reported to Congress on the establishment of a mint:
Congress by their Act of
the 6th July last resolved, that the Money Unit of the United States should be
a Dollar, but did not determine what number of grains of Fine Silver should
constitute the Dollar.
We have concluded that
Congress by their Act aforesaid, intended the common Dollars that are Current
in the United States, and we have made our calculations accordingly.
* * *
The Money Unit or Dollar
will contain three hundred and seventy five grains and sixty four hundredths of
a Grain of fine Silver. A Dollar containing this number of Grains of fine
Silver, will be worth as much as the New Spanish Dollars.33
Shortly thereafter, on 8 August 1787,
Congress adopted this standard as "the money Unit of the United States.34
Again, stark and striking is the contrast
between how the committee of the Continental Congress - composed of the
Founding Fathers - approached the problem of fixing the unit of money, and how
the modern Congress deals with the same matter. The committee determined that
an American"dollar" should contain a known, unchangeable weight of
silver, and would be "worth as much as the New Spanish Dollars"
because it actually contained this weight of precious metal, not simply because
Congress said it was a "dollar.” Today's Congress, however, assumes that
the "dollar" need have no rational relationship to a weight of
silver, of gold, or even of base metals. Thus, today's Congress assumes that
the value of money has nothing to do with the substance that composes a coin,
but is merely the product of a political decree. In today's Washington, D.C.,
might not only makes right, but also creates economic value!
Many of the same people who served in the
Continental Congress participated in the Federal Convention that drafted the Constitution.
And even those members of the Convention who had not served in the Continental
Congress knew what that Congress had done. Therefore, when the Convention used
the noun "dollar" in Article 1, Section 9. Clause I of the Constitution,
it was with the tacit understanding of all the history surrounding that noun.
Thus, the lesson here is clear: The constitutional "dollar,” the
constitutional "Money-Unit" or "Money of Account" of the
United States, is an historically determinate, fixed weight of fine silver in
the form of a coin - in essence, a unit of measure - adopted, not created,
first by the American market and then by the Continental Congress well before
ratification of the Constitution.
c. Adoption of the "dollar" as
the unit of money immediately after the ratification of the Constitution. Upon ratification of the Constitution.
Congress and the Executive began work on a national monetary system.
(1) Alexander Hamilton's Report on the
Mint. On 28 January 1791, Secretary
of the Treasury Alexander Hamilton presented to Congress his Report on the
Subject of a Mint. "A plan for an establishment of this nature,” he
wrote, "involves a great variety of considerations intricate, nice, and
important." Indeed, the erection of a mint was essential to the continued
integrity of the nation's coinage:
The dollar originally
contemplated in the money transactions of this country [i.e., the silver
Spanish milled dollar], by successive diminutions of its weight and fineness
[in the Spanish mints], has sustained a depreciation of five per cent, and yet
the new dollar has a currency in all payments in place of the old, with
scarcely any attention to the difference between them. The operation of this in
depreciating the value of property depending upon past contracts, and * * * of
all other property, is apparent. Nor can it require argument to prove that a
nation ought not to suffer the value of the property of its citizens to
fluctuate with the fluctuations of a foreign mint, or to change with the
changes in the regulations of a foreign sovereign. This, nevertheless, is the
condition of one which, having no coins of its own, adopts with implicit
confidence those of other countries.
* * *
It was with great reason,
therefore, that the attention of Congress, under the late Confederation, was
repeatedly drawn to the establishment of a mint; and it is with equal reason
that the subject has been resumed * * * .35
To form "a right judgment of what ought
to be done,” Hamilton posed two questions, "lst. What ought to be the
nature of the money unit of the United States?,” and "2d. What the
proportion between gold and silver, if coins of both metals are to be
Recognizing that "[a] pre-requisite to
determining with propriety what ought to be the money-unit of the United
States" is "to form as accurate an idea as the nature of the case
will admit, of what it actually is,” Hamilton referred to the resolutions of
the Continental Congress on the subject, noted that they had resulted in
"no formal regulation on the point,” and concluded that "usage and
practice * * * indicate the dollar as best entitled to that character.” As to
"what kind of dollar ought to be understood; or, * * * what precise
quantity of fine silver,” he surveyed the various pieces in circulation over
the years, and recommended that "[t]he actual dollar in common circulation
has * * * a much better claim to be regarded as the actual money unit.”37
Hamilton recognized that "[t]he
suggestions and proceedings hitherto have had for object the annexing of [the
title of 'money unit'] emphatically to the silver dollar.” Yet, his personal
view was that "a preference ought to be given to neither of the metals for
the money unit" - at least "[i]f each of them be as valid as the
other in payments to any amount.” He realized, of course, that adopting
equivalent, interchangeable "money units" of both silver and gold
would pose practical problems "from the fluctuations in the relative
[market-]value of the metals"; but he suggested that this could be
overcome "if care be taken to regulate the proportion between them with an
eye to their average commercial value.”38
Turning to "the proportion which ought
to subsist between [gold and silver] in the coins,” Hamilton proposed two
"option[s]": namely, "[t]o approach as nearly as can be
ascertained, the * * * average proportion * * * in * * the commercial
world"; or "[t]o retain that which now exists in the United States.”
The first alternative "requir[ing] better materials than are possessed, or
than could be obtained without an inconvenient delay,” he recommended instead
the domestic market-ratio of "about as 1 to 15.” "There can hardly be
a better rule in any country for the legal than the market proportion,” he
explained, "if this can be supposed to have been produced by the free and
steady course of commercial principles. The presumption in such a case is that
each metal finds its true level, according to its intrinsic utility, in the
general system of money operation.”39
In the course of determining the method by
which the government would defray the expenses of coining silver and gold
brought to the mint byprivate parties (the system of "free coinage"40), Hamilton restated the traditional policy against
monetary debasement in emphatic terms:
denomination of the coin [is] a measure which has been disapproved by the
wisest men in the nations in which it has been practiced, and condemned by the
rest of the world. To declare that a less weight of gold or silver shall pass
for the same sum, which before represented a greater weight, or to ordain that
the same weight shall pass for a greater sum, are things substantially of one
nature. The consequence of either of them is to degrade the money unit;
obliging creditors to receive less than their just dues, and depreciating
property of every kind.
* * *
The quantity of gold and
silver in the national coins, corresponding with a given sum, cannot be made
less than heretofore without disturbing the balance of intrinsic value, and
making every acre of land, as well as every bushel of wheat, of less actual
worth than in time past. * * *
[A debasement would
cause] a rise of prices proportioned to the diminution of the intrinsic value
of the coins. This might be looked for in every enlightened commercial country;
but, perhaps, in none with greater certainty than in this; because in none are
men less liable to be the dupes of sounds; in none has authority so little
resource for substituting names for things.
A general revolution in
prices * * * could not fail to distract the ideas of the community, and would
be apt to breed discontents as well among those who live on the income of their
money as among the poorer classes of the people, to whom the necessaries of
life would * * * become dearer.
Among the evils attendant
on such an operation are these: creditors, both of the public and of
individuals would lose a part of their property, public and private credits
would receive a wound; the effective revenues of the Government would be
diminished. There is scarcely any point, in the economy of national affairs, of
greater moment than the uniform preservation of the intrinsic value of the
money unit. On this the security and steady value of property essentially
In sum, Hamilton recommended two equivalent
statutory money-units based on weight, a gold coin of 24.75 grains of fine
gold, and a silver coin of 371.25 grains of fine silver. "[N]othing better,”
he wrote, "can be done * * * than to pursue the track marked out by the
resolution [of the Continental Congress] of the 8th of August, 1786."42
Hamilton's Report thus restated the traditional monetary principles of American
law, as the Continental Congress applied them, and as the Federal Convention
embodied them in the Constitution. Congress, Hamilton urged, should
adopt silver and gold as the nation's monetary substances, at an exchange-ratio
representing the average proportionate value between the metals in the domestic
free market. Congress should continue on "the track marked out" under
the Articles of Confederation and the Constitution by employing the
"dollar" as the "money-unit,” or "money of account" -
a silver "dollar" derived directly from the Spanish milled dollar,
and a new gold coin containing a silver-"dollar's" worth of gold. The
government should provide "free coinage" of both silver and gold for
the public. And it should guarantee the preservation of the intrinsic value of
Of enduring importance is Hamilton's admonition that "[t]here is
scarcely any point, in the economy of national affairs, of greater
moment than the uniform preservation of the intrinsic value of the money
unit. On this the security and steady value of property essentially
depend" Apparently, however, although Hamilton's statue stands before
the Department of the Treasury, his words have been forgotten in contemporary
(2) The Coinage Act of 1792. Little more than a year after Hamilton's Report,
Congress enacted its principles into law. The Coinage Act of 179243 initiated a new statutory system embodying the
constitutional principles that Hamilton had reaffirmed. First, Congress
followed consistent American common-law tradition by continuing the use of
silver, gold, and copper as "Money.”44 Second, it
reiterated the judgment of the Continental Congress and the Constitution
that "the money of account of the United States shall be expressed in
dollars or units,”45 and defined the "DOLLARS OR UNITS" in terms
of weight, as "of the value of a Spanish milled dollar as the same is now
current, and to contain three hundred and seventy-one grains and four sixteenth
parts of a grain of pure * * * silver.”46
Recognizing that to adopt Hamilton's
suggestion of a "gold dollar" would cause confusion and require
constant governmental supervision to "regulate * * * Value[s],"47 Congress created no such coin, instead mandating the
coinage of "EAGLES,” "each to be of the value of ten dollars or
units,”48 that is, of the weight of fine gold equivalent in the
marketplace to 3,712.50 grains of fine silver. Following Hamilton's
recommendation, though, it fixed "the proportional value of gold to silver
in all coins which shall by law be current as money within the United
States" at "fifteen to one, according to quantity in weight, of pure
gold or pure silver.”49 And it made "all the gold and silver coins * * *
issued from the * * * mint * * * a lawful tender in all payments whatsoever,
those of full weight according to the respective values [established in the
Act], and those of less than full weight at values proportional to their
Thus, Congress did not establish a "gold
dollar,” or enact a "gold standard,” as the popular misconception holds.
For example, the Encyclopaedia Britannica erroneously reports that the
"dollar * * * was defined in the Coinage Act of 1792 as either 24.75 gr.
(troy) of fine gold or 371.25 gr. (troy) of fine silver.”51 The Act did no such thing. It explicitly defined the
"dollar" as a fixed weight of silver, and "regulate[d] the
Value" of gold coins according to this standard unit (or money of account)
and the market exchange-ratio between the two metals. Nowhere did the Act refer
to a "gold dollar,” only to various gold coins of other names that it
valued in "dollars.”52
Congress also provided free coinage "for
any person or persons,”53 and affixed the penalty of death for the crime of
debasing the coinage.54
Thus did the first Congress - which knew what
the Constitution meant if any Congress ever did - rigorously apply the
Constitution's mandate: It determined as a fact "the value of a Spanish
milled dollar as the same is now current,” and thereby permanently fixed the
constitutional standard of value, or "money of account,” as a unit of
weight consisting of 371.25 grains of fine silver in the form of coin. It
coined American "dollars" as "Money,” containing this intrinsic
value of silver. It coined American "eagles" as "Money,”
containing a fixed weight of pure gold - and regulate[d]" their
"Value" at so-many "dollars" by comparing their intrinsic
value in (weight of) fine gold to the market-equivalent of silver. It gave both
the silver and gold coins legal-tender character for their intrinsic values in
all payments. It opened the mint to free coinage of the precious metals. And it
outlawed debasement of the nation's new "Money.”
The handiwork of the statesmen who drafted
and approved these measures is more than a merely coincidental embodiment of
the traditional principles of Anglo-American common law, the experiences of the
Continental Congress, and the explicit provisions of the Constitution.
Rather, taking into account the vicissitudes of the time, the Coinage Act of
1792 perfectly reflects what the common law and the law under the Articles of
Confederation had been before ratification of the Constitution, and what
the constitutional law was then and remains today.55 It is a definitive interpretation, elaboration, and
application of the Constitution - with, in some of its sections at
least, a clearly constitutional character of its own: in particular, Sections 9
(definition of the "dollar"), 14-15 (free coinage of silver and
gold), 16 (legal-tender character for silver and gold coins),56 and 20 ("dollar" identified as the
"money of account").57
Most importantly, Congress' determination of the proper weight of the
"dollar" is, for all practical purposes today, a statement of
constitutional law unalterable except by amendment of the Constitution
itself. For, at the remove of almost two centuries, to check the accuracy of
the conclusion that 371.25 grains (troy) of fine silver best represents an
average weight of the various Spanish milled "dollars" in circulation
in the United States in 1792 is most probably impossible.
In the light of this history, the present monetary provisions of the United
States Code demonstrate that official Washington, D.C., has no conception
of what a "dollar" really is. The reason for this self-imposed
ignorance is obvious. By reducing the "dollar" to a political
abstraction, the national government has empowered itself to engage in
limitless debasement (depreciation in purchasing power) of the currency. A
"dollar" that contains - and must perforce of the Constitution
contain - 371.25 grains of fine silver cannot be reduced in value below the
market exchange value of silver for other commodities. A pseudo-"dollar"
that contains no fixed amount of any particular substance per "dollar"
can be reduced in value infinitely. As debasement of currency amounts to a
hidden tax, Congress' silent refusal to recognize the constitutional
"dollar" amounts to the usurpation of an unlimited power to tax
through manipulation of the monetary system. Thus, modern "money"
has become a means for the total confiscation of private property by
More ominously, this scheme of surreptitious confiscation remains hidden from
the vast majority of Americans, who seem blissfully unconcerned about the issue
most important to the soundness of the country's monetary system: namely, the
character of the monetary unit. One need not be overly pessimistic to predict
that misuse by politicians of the fictional, constantly depreciating pseudo-"dollar"
to expropriate unsuspecting citizens will continue until an economic crisis
finally shocks an increasingly impoverished American people out of its slumber,
and forces the people to ask the simple question: "What is a
'dollar'?" At that time, the answer will be no different from what it is
today, and has been since 1704 - but the opportunity to use that knowledge
to prevent a catastrophe may be long gone.
Therefore, those few who do know what a "dollar" is, and why that
definition is important, need to inform as many of their fellow-citizens as
possible. If time has not already run out for re-education of the American
people in this area, it is racing towards the historic exit. Under these
circumstances, silence by the friends of sound money and honest government is
not "golden,” but potentially fatal.
Excerpts from the Coinage Act of 1792
Act of 2 April 1792, 1 Statutes at Large 246
 CHAPTER XVI. - An Act establishing a Mint, and regulating the
Coins of the United States.
SECTION 1. Be it enacted by the Senate and House of Representatives
of the United States of America in Congress assembled, and it is hereby
enacted and declared, That a mint for the purpose of a national coinage be,
and the same is established * * * .
* * *
 SEC. 9. And be it further enacted, That
there shall be from time to time struck and coined at the said mint, coins of
gold, silver, and copper, of the following denominations, values and
descriptions, viz., EAGLES - each to be of the value of ten dollars or units,
and to contain two hundred and forty-seven grains and four eights of a grain of
pure, or two hundred and seventy grains of standard gold. HALF EAGLES - each to
be of the value of five dollars, and to contain one hundred and twenty-three
grains and six eights of a grain of pure, or one hundred and thirty five grains
of standard gold.
QUARTER EAGLES - each of be of the value of
two dollars and a half dollar, and to contain sixty-one grains and seven eights
of a grain of pure, or sixtyseven grains and four eights of a grain of standard
gold. DOLLARS or UNITS - each to be of the value of a Spanish milled dollar as
the same is now current, and to contain three hundred and seventy one grains
and four sixteenth parts of a grain of pure, or four hundred and sixteen grains
of standard silver. HALF DOLLARS - each to be of half the value of the dollar
or unit, and to contain one hundred and eighty-five grains and ten sixteenth
parts of a grain of pure, or two hundred and eight grains of standard silver.
QUARTER DOLLAR - each to be of one fourth the
value of the dollar or unit, and to contain ninety-two grains and thirteen
sixteenth parts of a grain of pure, or one hundred and four grains of standard
silver. DISMES - each to be of the value of one tenth of a dollar or unit, and
to contain thirty-seven grains and two sixteenth parts of a grain of pure, or
forty-one grains and two sixteenth parts of a grain of standard silver. HALF
DISMES - each to be of the value of one twentieth of a dollar, and to contain
eighteen grains and nine sixteenth parts of a grain of pure, or twenty grains and
four fifth parts of a grain of standard silver. CENTS each to be of the value
of the one hundredth part of a dollar, and to contain eleven penny-weights of
copper. HALF CENTS - each to be of the value of half a cent, and to contain
five penny-weights and a half penny-weight of copper.
SEC. 12. And be it further enacted, That the proportional value of gold
to silver in all coins which shall by law be current as money within  the
United States, shall be as fifteen to one, according to quantity in weight, of
pure gold or pure silver; that is to say, every fifteen pounds weight of pure
silver shall be of equal value in all payments, with one pound weight of pure
gold, and so in proportion as to any greater or less quantities of the
SEC. 12. And be it further enacted, That the standard for all gold coins
of the United States shall be eleven parts fine to one part alloy; and
accordingly that eleven parts in twelve of the entire weight of each of the said
coins shall consist of pure gold, and the remaining one twelfth part of alloy;
and the said alloy shall be composed of silver and copper, in such proportions
not exceeding one half silver as shall be found convenient; to be regulated by
the director of the mint, for the time being, with the approbation of the
President of the United States, until further provision shall be made by law. *
SEC. 13. And be it further enacted, That the standard for all silver
coins of the United States, shall be one thousand four hundred and eighty-five
parts fine to one hundred and seventy-nine parts alloy; and accordingly that
one thousand four hundred and eighty-five parts in one thousand six hundred and
sixty-four parts of the entire weight of each of the said coins shall consist
of pure silver, and the remaining one hundred and seventy- nine parts of alloy;
which alloy shall be wholly of copper.
SEC. 14. And be it further enacted, That it shall be lawful for any
person or persons to bring to the said mint gold and silver bullion, in order
to their being coined; and that the bullion so brought shall be there assayed
and coined as speedily as may be after the receipt thereof, and that free of
expense to the person or persons by whom the same shall have been brought. And
as soon as the said bullion shall have been coined, the person or persons by
whom the same shall have been delivered, shall upon demand receive in lieu
thereof coins of the same species of bullion which shall have been delivered,
weight for weight, of the pure gold or pure silver therein contained: Provided
nevertheless, That it shall be at the mutual option of the party or
parties bringing such bullion, and of the director of the said mint, to make an
immediate exchange of coins for standard bullion, with a deduction of one half
per cent, from the weight of the pure gold, or pure silver contained in the
said bullion, as an indemnification to the mint for the time which will
necessarily be required for coining the said bullion, and for the advance which
shall have been so made in coins.
* * *
 SEC. 16. And
be it further enacted, That all the gold and silver coins which shall have
been struck at, and issued from the said mint, shall be a lawful tender in all
payments whatsoever, those of full weight according to the respective values
herein before described, and those of less than full weight at values
proportional to their respective weights.
SEC. 17. And be it further enacted, That it shall be the duty of the
respective officers of the said mint, carefully and faithfully to use their
best endeavours that all the gold and silver coins which shall be struck at the
said mint shall be, as nearly as may be, conformable to the several standards
and weights aforesaid
SEC. 19. And be it further enacted, That if any of the gold or silver
coins which shall be struck or coined at the said mint shall be debased or made
worse as to the proportion of fine gold or fine silver therein contained, or
shall be of less weight or value than the same ought to be pursuant to the
directions of this act, through the default or with the connivance of any of
the officers or persons who shall be employed at the said mint, for the purpose
of profit or gain, or otherwise with a fraudulent intent, * * * every such
officer or person who shall be guilty of any * * * of the said offenses, shall
be deemed guilty of felony, and shall suffer death.
SEC. 20. And be it further enacted, That the money of account of the
United States shall be expressed in dollars or units, dismes or tenths, cents
or hundredths, and milles or thousandths, a disme being the tenth part of a
dollar, a cent the hundredth part of a dollar, a mille the thousandth part of a
dollar, and that all accounts in the public offices and all proceedings in the
courts of the United States shall be kept and had in conformity to this
APPROVED, April 2, 1792.
U.S.C. § 5101 (emphasis supplied). See Act of 2 April 1792, ch. XVI, § 9, 1
Stat. 246, 248.
2 31 U.S.C. § 5103.
3 Use of the modifier "supposedly"
is necessary, because not everything that Congress may declare by statute to be
"money" may qualify as the "Money" Congress may
"coin" or "borrow" under the Constitution. See U.S.
Const. art. I, § 8, cls. 2 and 5.
4 12 U.S.C. § 411.
5 31 U.S.C. § 5101.
6 See Hewitt-Donlon Catalog of United
States Small Size Paper Money (M. Hudgeons ed., 14th
ed., 1979), at 66-153.
7 The adverb "explicitly"
deserves careful attention, because no matter what FRNs do not state on their
faces, they are required by law to be "redeemed in lawful money.” 12
U.S.C. § 411.
8 31 U.S.C. § 5112(a)(1-4).
U.S.C. § 5112(b).
10 One half dollar equals five dimes. One
half dollar equals two quarters. And one quarter equals two and one-half dimes.
11 31 U.S.C. § 5112(a)(7-10).
12 Based on this set of coins, a
"dollar's"-worth of coined gold is one-fiftieth of the weight of the
"fifty dollar" gold coin ("33.931 grams"), or 0.679 grams.
13 31 U.S.C. § 5112(e).
14 31 U.S.C. § 5119(a) (emphasis
15 31 U.S.C. § 5116(a)(1).
16 31 U.S.C. § 5116(b)(1).
17 31 U.S.C. § 5116(b)(2).
18 31 U.S.C. § 5119(a).
19 E.g., 2
J. Story, Commentaries on the Constitution of the United States (5th
ed. 1891), § 1335, at 211 & n.2.
20 See, e.g, McCulloch
v. Maryland. 17 U.S. (4 Wheat.) 316, 425-33 (1819).
21 L. von Mises, Human Action: A
Treatise on Economics (3rd rev. ed.
at 203-04, 351-52, 411. See also 1 M. Rothbard, Man, Economy, and
A Treatise on Economic Principles (1970), at 237.
An Act for acertaining the rates of foreign coins in her Majesty's plantations
in America, 1707, 6 Anne, ch. 30, § I (emphasis supplied in part).
23 Cf NLRB
v. Amax Coal Co., A Division of Amax, Inc., 483 U.S. 322, 329 (1981):
"Where Congress uses terms that have accumulated settled meaning under * *
* the common law, a court must infer, unless the statute otherwise dictates,
that Congress means to incorporate the established meaning of these
24 See Sumner,
"The Spanish Dollar and the Colonial Shilling,” 3 Amer. Hist. Rev.
25 Note 22, ante.
26 4 Journals of the Continental
Congress, 1777-1789 (W. Ford ed. 1905), at 381-82; 5 id. at 725.
27 Propositions respecting the Coinage of
Gold, Silver, and Copper (printed folio pamphlet
presented to the Continental Congress 13 May 1785), at 4, 5.
28 "NOTES on the Establishment of a
MONEY MINT, and of a COINAGE for the United States,” The Providence
Gazette and Country Journal, Vol. XXI, No. 1073 (24 July 1784), in Propositions,
ante note 27, at 9, 10.
29 Id. at
30 Id. at
31 28 Journals of the Continental
Congress, ante note 26, at 355, 357.
32 29 id. at 499-500.
33 30 id. at 162-63. After
ratification of the Constitution, Congress made a more accurate
determination of the value of the dollar, setting it at 371.25 grains of fine
silver (as described post).
34 31 Journals of the Continental
Congress, ante note 26, at 503.
35 Hamilton's observation that it requires
no "argument to prove that a nation ought not to suffer the value of the
property of its citizens to fluctuate with the fluctuations of a foreign mint,
or to change with the changes in the regulations of a foreign sovereign"
should serve as a warning to those who rashly advocate a new
"one-world" currency-system in which the United States would
36 2 The Debates and Proceedings in the
Congress of the United States (J. Gales compil. 1834), Appendix, at 2059,
37 Id. at
at 2064-65. This is the source of the (unfulfilled) modern duty of the
Secretary of the Treasury "to maintain the equal purchasing power of each
kind of United States currency.” 31 U.S.C. § 5119(a). See ante, pp. 5-7.
39 Appendix, ante note 36, at 2066,
40 See Act of 2 April 1792, ch. XVI, §§
14-15, 1 Stat. 246, 249-50.
41 Appendix, ante note 36, at
42 Id. at
43 Act of 2 April 1792, ch. XVI, 1 Stat.
246. See the Appendix hereto.
44 § 9, 1 Stat. at 248.
45 § 20, 1 Stat. at 250.
46 § 9, 1 Stat. at 248.
47 See U.S.
Const. art. I, § 8, cl. 5.
48 Coinage Act of 1792, § 9, 1 Stat. at
11, 1 Stat. at 248-49.
50 § 16, 1 Stat. at 250.
51 Vol. 7, "Dollar" (1963 ed.)
52 For the correct interpretation of the
Act, see, e.g., A. Hepburn, History of Coinage and Currency in
the United States and the Perennial Contest for Sound Money (1903), at 22.
53 Coinage Act of 1792, §§ 14-15, 1 Stat.
54 § 19, 1 Stat. at 2.50.
55 Section 11 of the Coinage Act was
clearly constitutional in 1792, representing as it did a reasonable means of
"regulat[ing] the Value" of gold coins as against the (silver)
"dollar" in an era in which financial data were uncertain and
difficult to communicate with dispatch. Today, such a statutorily fixed
exchange-ratio for the precious metals would be unreasonable. Given the
technical sophistication of existing financial institutions, Section 11 of a
parallel modern act ought to read, perhaps, "That the proportional value
of gold to silver in all coins which shall by law be current as money within
the United States, on any particular day or days, shall be the proportion
between pure gold and pure silver, according to quantity in weight, existing at
the beginning of the business day or days in [here Congress would identify a
financial market], or, if the particular day or days is or are not a business
day or days, on the last preceding business day or days." Cf. H.R.
6054, 97th Cong., 2d Sess. (1982), § 4.
U.S. Const. art. 1, § 10, cl. 1.
57 1 Stat. at 248, 249, 250-51.
- National Alliance for Constitutional Money, Inc.
Parks, Executive Director
Box 625, FDR Station
York, New York 10150-0625