Considering Article 1 Section 10 of the US Constitution. So can the State pay State employees in Federal Reserve Notes or must they use a legal tender as gold or silver coin as the Constitution specifically states them to use AND prohibits use of any thing other than it, which would mean that States would have to use American Eagle and Buffalo coins which ARE legal tender with face values of $1 and $50 respectively and are gold and silver coins.
Actually, legally a state can print its own money. Some used to. It can pay in any currency it chooses (Euros or it's own tender, for example), as long as it is not issued under faux federal authority. ~String
Can you provide any legal basis for that? And how can any 'tender', which is not specifically gold or silver coin be reconciled with the US Constitution? Whether states are doing it (or have done it before) is not really the intent of the thread. The question is from a purely legal and Constitutional point of view. Does the State have any Constitutional authority to use anything other than Gold and Silver coins as tender for payment? Article I Section X As far as I can tell the Constitution explicitly states what the States could use as tender for payment AND prohibits everything else explicitly by stating 'any thing but'. So I would like to hear a legal argument which would satisfactorily argue otherwise.
Article I, Section 10 forbids the States from making anything legal tender other than gold and silver, but it has never been read as forbidding the federal government from doing so or allowing the states to use the tender made by the federal government. In this context "make a tender in payment of debts" does not mean "pay debts" it means to establish a tender (i.e., a "legal medium of payment"). It does mean that if a State wanted to make trade in gold and silver, rather than currency, legal tender within its borders, it could (or at least the Constitution doesn't forbid that...but I think federal statutes during the Great Depression may have prohibited it). It was very common in those days for States to denominate contracts in gold, and the lack of such a clause would have invalidated many existing financial arrangements the states had already entered into. It was common at the federal level too, until the Great Depression, to have "gold clauses" in contracts. You have to remember that when the Constitution was written, there was no assurance U.S. money would be in the form of gold or silver coins or would be a stable currency or accepted in most transactions, even domestically. The goal of the clause was to prevent state-chartered banks from issuing paper money and repeating fiasco of the continental dollar. The prohibition then was a part of the plan to give the federal government a plenary power over the money supply, not to prohibit States from using federal currency. If you think about it the other way...what would have been the object of disallowing the States from using federal paper currency once it existed? If it was to defend the need for a precious metals based standard (the only thing I can think of)...then why not add that the federal government was also limited to making gold and silver, and nothing else, legal tender?
Correct. How so? One could argue this really hasn't been challenged in the Supreme Court yet. But according to the explicit reading of the words, the States can not use any 'tender' other than Gold and Silver coins. In the case where the legal tender is Gold and silver coins, which would also be created by the Federal Gov, then they would have to use those. You have to differentiate State from People. The clause does not prohibit people from using any legal tender created by the Federal Government, but it does prohibit the States from ANY tender ('any thing but') other than gold and silver coins. I think your wording here is very soft. "if a State wanted' 'it could', it seems to me the Constitution prohibits anything other than it, 'any thing but' is very explicitly clear, not 'if' or 'could'. :shrug: Not quite, the Federal Government would simply issue 'legal tender' which indeed was gold backed and those would suffice. The Federal Government obviously can create more than one form of legal tender so it could accomodate the State governments without specifically creating such a clause to prohibit use of 'any thing but gold and silver coins'. Whether the federal government can provide assurance or not is independent of what the Constitution requires of the State. Since the Federal Government could regulate the value of the coins, even if they had only 5 oz of gold, they could create a legal tender, even if it was only worth .0000001 oz of gold (example), or possibly 1oz could be valued at 1 gazillion dollars. In any case the power to regulate value of the coin enables the Federal Government to fulfill any 'debt value' even at the lack of massive gold or silver reserves because of coin value regulation. Which would all be taken care by the prohibition to coin money and emit bills of credit. The specifics about Gold and silver coins then would be unnecessary but clearly they are present. The wording of the Constitution does require only Gold and Silver legal tender, which WOULD be 'federal currency' as well since State do not have authority to coin money. You have to understand Federal Reserve Notes are not the only legal tender 'federal currency', both American Eagle and American Buffalo coins are Federally legal tender. Between the many 'forms of currency', the specific language of the Constitution would require the States to choose between the 'many legal tenders', if there were many, the one which would satisfy the clause's requirement of gold and silver coins. 'Any Thing But' makes it explicitly prohibitive of other legal tenders for State's use. Because Federal currency can be used by the people. Again my topic is very specific to State 'dealings'. The clause does NOT force the people to use gold and silver coins as part of 'private' or 'public' (when in relationship to Federal Government) debts. Thus allowing the federal government 'paper money' is still consistent as it is something that can still be used. Federal employees for example could be paid in Federal Reserve Notes, which would not be in breach of the Constitution. Private transaction could be with Federal Reserve Notes. Thus the utility of 'paper money' is there and useable while that clause (and your reasoning) would not infringe upon this. My discussion is regarding State dealings specifically, not private or Federal-Public transactions. That is the Federal government can create 'paper money' or anything else as money and legal tender that can be used Federally/Internationally or within a State, but the State Government itself is prohibited from using any legal tender other than gold and silver legal tender coins (i.e American Eagles, Buffalos nowadays).
This is a very silly thread! The whole thing reminds me of how every year or so some idiot tries to avoid paying his federal income tax because the wording is that the tax "must be paid in gold." The exact wording STILL specifies "gold" even today. Although I don't recall precisely how it was handled, the issue was resolved long ago and there's no loophole left to use. The exact same principle applies to this particular nonsensical issue as well. :shrug: I suggest you drop this and try a different topic. :bugeye:
"because Federal Reserve Notes are not gold or silver and may not be exchanged for gold or silver. This argument misinterprets Article I, Section 10 of the United States Constitution. The Law: Congress is empowered "[t]o coin Money, regulate the value thereof, and of foreign coin, and fix the Standard of weights and measures." U.S. Const. Art. I, § 8, cl. 5. Article I, Section 10 of the Constitution prohibits the states from declaring as legal tender anything other than gold or silver, but does not limit Congress' power to declare the form of legal tender. See 31 U.S.C. § 5103; 12 U.S.C. § 411. In United States v. Rifen, 577 F.2d 1111 (8 th Cir. 1978), the court affirmed a conviction for willfully failing to file a return, rejecting the argument that Federal Reserve Notes are not subject to taxation. "Congress has declared Federal Reserve notes legal tender . . . and federal reserve notes are taxable dollars." Id. at 1112. The courts have rejected this argument on numerous occasions." http://www.irs.gov/businesses/small/article/0,,id=106503,00.html That is completely different than what I am saying, this thread isn't about Federal Reserve Notes being legal or not. Neither am I saying the Federal gov must use gold or silver coin. So the comparison isn't possible. This thread about State gov.
Blah...blah...blah... If you have ANY reading comprehension whatsoever you should have been able to note that I never said this was the same topic - I specifically said it "reminded" me of the income tax thing. But back to your topic: We're all wise to your transparent efforts to make yourself look intelligent by attempting to practice Constitutional law. But your attempts are moot and amount to nothing. Actually, all you've managed to do is make yourself look foolish. Once again, I suggest you switch to something of value to discuss - there are DOZENS of real issues out there you could be working on instead of wasting time and server disk space on this nonsense. :shrug:
Okay, but WHY would the Constitution do that (no one in any position of authority thinks it does, but hypothetically...)? I agree that it is possible to write a document that forbids the States (from using federal paper currency, but I can't think of a reason why one would want to wrote that into the law. Do you think it was a little prank the founding fathers were pulling? On the other hand, the interpretation that I stated, that it merely forbids the states from establishing their own legal tender (other than gold or silver) does make sense in light of the objectives of the clause and the historical concerns the founders were dealing with. I can even hypothetically imagine the clause saying that the States can't be forced to use federal paper money (which is also not what this clause says), but if a state chooses to use a federal paper currency, I can't see why the federal Constitution would bar them from doing so. Given a choice between reading the clause as a seemingly irrational prohibition placed on the States that is neither in their interest nor that of the federal government (nor that of the people), or a rational one, why would anyone adopt your view? It is a rule of legal interpretation that when you have two competing ways to read a clause, one of which is reasonable and one of which is not, that you take the reasonable one. You are certainly free to believe whatever you like, but I'll warrant that no one in government will ever seriously consider that position valid.
And neither would anyone else. Anyone, that is, except for a troll who's trying to impress others with the fact that he can and has read the Constitution. Actually, it's much more likely that he HASN'T read it at all and just picked up this bit of trivial nonsense from some other forum OR - most likely of all - some crank website.
Any more ad hominems :shrug: No in fact I see this as a possible way to force the federal government into something, I just posted it here for a discussion. Its not meant for 'tax evasion' but something else.
Again if that was the reason then adding 'any thing but gold and silver' was not necessary at all. Given that the clause takes away their power to 'coin money' or 'emit Bills of Credit'. I think 'choice' as you infer is not there when it says 'Any Thing but'- I don't see a choice left after those words. Consider the possibility that paper money indeed was prohibited as intended by the Founders per Constitution? In such a case your rationale breaksdown because then the Federal government would need to produce 'non-paper currency' which would in all likelihood be gold and silver. Here: http://www.angelfire.com/ut2/lrtopham/convention.html Given the debate, it seems awefully clear that paper currency emitted by the State and the Federal Government was prohibited as intended per the Constitution. But in the Constitution the specific language is mentions only the States, in conjunction with the debate we could see that your rationale can be used, that is: if States can't use any thing but Gold and Silver then by 'rationale' extension (which you are using) the Federal Gov couldn't create paper money either. This is certainly what seems to be the conclusion one can draw from the discussion. The Supreme Court on the other hand discussed the case from a very narrow view, that being that the Federal Government is no explicitly stopped from making paper money as the clause is for States, but as I shared it was perhaps using your same logic that the States were banned from using anything except gold and silver 'logically' then banning the Federal Government as well, something clearly visible in the debate. So the Supreme Court used 'Necessary and Proper Clause' to allow Paper money. But if the Supreme Court had discussed the topic from the States authority, which I am trying to do here, then it becomes abundantly clear that paper money was indeed prohibited, we can use the debates as a guide, which would then make 'sense' of this all, and everything would be 'rational' again. :shrug: And in this case the Necessary and Proper Clause 'implicit' powers would not be able to go against an explicit prohibition issued to the States which can be defended. The IRRATIONALITY that you suggest only exists because Supreme Court allowed paper money, and thus perhaps the Supreme Court should revisit that to make it 'rational' again. So the Constitution, using my interpretation, doesn't become irrational, but rather the decision of SC brings an irrationality. But it is very clear from the debates indeed States were forced to use only gold and silver as legal tender, IMO. I would like to specifically quote: So as far as I can tell the the prohibition was absolute AND it was not 'allowable' (choice?), and the prohibition so absolute as even the 'consent of Legislature of US (Congress) was not allowed, as they thought if Congress was allowed that 'friends of papermoney' would indeed try to create it. So I think its pretty clear from the discussion 'paper money' wasn't to be allowed even if the Congress consented, the prohibition was 'absolute'. So the 'irrationality' is derived not from my understanding of the Constitution but that of the Supreme Court decision allowing Federal government to make paper money. So given the explicit prohibition, it can be safely argued that the Constitution indeed prohibits the States from using ANY thing as tender except Gold and silver coins, even if that means they have to 'reject' (as in not use) legal tender created by Federal Government. This thus can not be denied. So even though the Supreme Court has ruled to allow Paper Money, States CANNOT use it. To resolve the 'irrationality' Supreme Court would need to reverse their decision on paper money, or the Constitution would need to be amended. :shrug:
Dense. I don't know why I bother. What did the article say. Can you read? (I like how you acted dishonestly and kept the last words "small", by the way, because the last few words of the article are the lynch-pin). Did it say something about "debts" and "states"? Did it talk about allowing the states to print money and circulate it within its borders for its citizens to use? See, states incur debts with each other and with the federal government, in those cases, the states have to use gold and silver coins. Now, if the states want to circulate their own currency for their individual citizens to use, that's a different matter. ~String
Please Register or Log in to view the hidden image! You know 'debts' just means liability? I really don't know wha you're trying to say here, the only reason I 'left' it out is because it is understood what 'Debts' means.
As I said, retaining the right to pay debts in gold and silver was okay because, (A) The concern was the States printing money that would have a deflationary effect. Paying debts in gold and silver would not have that, because the values wouldn't be subject to political whim. It would not have been hard for the state to invent some new form of currency that was not a coin or paper money, but that could nonetheless be produced in mass quantities. As for your point of States getting the permission of the U,.S. Legislature, you misunderstand it. They meant that Congress might (under pressure) pass a law that permitted the States to print paper money (or issue some other sort of deflationary currency), not that Congress might print paper money which the States might use. Again, there is no utility in making State transactions more cumbersome than those of the federal government...and if the States could not pay debts using federal paper money, then the States themselves could NEVER BE PAID in federal paper money either (because they would take in that paper money and then they they could never use in any transaction, so that money would be worthless to the States and would simply pile up). The federal Constitution has no interest in setting up a system where federally issued paper money would be worthless when transacting with the States. In fact, that would be counterproductive to the federal government and provide no value to the States or the people. and (B) With the failure of the continental dollar, many states had contracts payable in gold and silver (particularly in French and English gold and silver coins), because no one in their right mind would accept paper currency issued by the U.S. (federal) government given the experience of the continental dollar. "Gold clauses" remained common, even in contracts with the federal government, until the Great Depression (when they were invalidated by law (in all public and private contracts), which led to the "Gold Clause" cases in the Supreme court). The reason to carve out gold and silver was that it would have played havoc with the states' ability to contract if the States were now allowed to pay in gold and/or silver, both in existing contracts and in future contracts. As it turned out, U.S. federal money was very stable, but no one contracting with the states in the late 18th century could have known that would be true and would remain true. There is no "choice" for the states. The states do not really choose to make federal currency legal tender. It is legal tender for all debts public and private. You again seem to be thinking that the words "make a Tender" as "pay". The clause does not say that the States shall not pay debts in any thing but gold and silver coins. It says that the States shall not declare anything except gold or silver to be "a legal tender". When Congress declares U.S. paper dollars to be a legal tender, that is not that States doing it, so it does not violate the clause. When the States then use those dollars, the States never had to declare them to be legal tender (Congress did) so it again does not violate the clause. If you disagree, that's fine. But I think we can recognize that no one in power is ever likely to agree with your reading (you might be able to swing Ron Paul, I suppose Please Register or Log in to view the hidden image!). If you feel strongly about it, then I guess you can sue your state the next time they try to pay you in U.S. dollars (perhaps this year, if you regularly deal with a State or are getting a State tax refund). I predict you'll lose the case, but at least you can present your arguments to a judge.
