So, you believe they “stole the gold”? Well, that just proves you do not understand what money is. At one time they used sea shells as money. Who agreed that sea shells had value? The parties to the contract decided that. This is why you can use anything of “value” as money. That includes a contract in the form of the promissory note. Which this in mind now read the following;
Introduction
The United States Constitution provides Congress with the authority to coin money and regulate its value. This constitutional power forms the foundation of the nation’s monetary policies and holds significant implications for the economy and financial system. This article delves into the historical context, legal foundation, and the broad scope of Congress’s powers in regulating money, establishing a uniform national currency, and maintaining monetary stability. Additionally, it explores the concept of money as a contractual agreement in economic transactions and considers the impact of the Gold Clause (31 U.S.C. § 5118) and the Congressional Record of March 9th, 1933.
I. The Constitutional Basis
The authority of Congress to regulate money is firmly established in the United States Constitution. Article I, Section 8, Clause 5 of the Constitution explicitly grants Congress the power to “coin Money and regulate the Value thereof” (U.S. Const. Art. I, § 8 cl 5). This constitutional provision serves as the bedrock for the government’s involvement in managing the nation’s currency.
The central purpose of this constitutional provision is to ensure that a uniform currency with a consistent legal value is in circulation throughout all states (Perry v. U.S., 294 U.S. 330, 55 S. Ct. 432, 79 L. Ed. 912, 95 A.L.R. 1335 (1935)). The framers of the Constitution recognized the importance of a single, reliable currency that would facilitate commerce and trade within the United States.
II. Broad Interpretation of Congressional Powers
From the early days of the republic, the powers granted to Congress to coin money and regulate its value have been interpreted broadly, allowing for the comprehensive regulation of every aspect of the nation’s currency (U.S. v. Ware, 608 F.2d 400 (10th Cir. 1979)). The following key elements of Congress’s authority in this domain are worth noting:
A. Establishment of a Uniform National Currency
Congress has the power to establish a uniform national currency. This can take the form of either coin or paper money (Baird v. County Assessors of Salt Lake and Utah Counties, 779 P.2d 676 (Utah 1989)).
B. Determination of Currency Composition
Congress holds the authority to declare what constitutes the national currency. Whether it’s physical coins or paper bills, the government has the discretion to define the composition of the currency (Allen v. Craig, 1 Kan. App. 2d 301, 564 P.2d 552 (1977)).
C. Legal Tender Status
Congress can grant legal tender status to the national currency. This means that currency created and endorsed by the government must be accepted at its face value as legal tender in the settlement of all debts, both public and private (People v. O’Campo, 330 Ill. App. 401, 71 N.E.2d 375 (1st Dist. 1947)).
D. Regulation of Currency Value
Congress is also empowered to regulate the value of the national currency. This includes measures to maintain the stability and reliability of the currency, such as preventing its devaluation. Official devaluation of the currency can only be carried out by Congress, underlining the central role it plays in currency management (Nixon v. Phillipoff, 615 F. Supp. 890 (N.D. Ind. 1985)).
III. Historical Precedents
Throughout the nation’s history, various types of money have been used, reflecting the evolving needs of society. These historical examples illustrate how the concept of money has evolved over time:
A. Barter System: In ancient times, people relied on bartering goods and services as a medium of exchange. This system had inherent limitations, such as the double coincidence of wants, making it inefficient.
B. Commodity Money: Many societies used commodities like gold, silver, or grains as money. The value of commodity money was tied to the inherent worth of the materials.
C. Banknotes: The advent of banking institutions introduced the use of paper banknotes as a form of money. These notes were initially backed by a promise to exchange them for a specific quantity of a valuable commodity, like gold.
D. Digital Currency: In the modern era, digital currencies, such as cryptocurrencies like Bitcoin, have emerged as new forms of money. These are decentralized and rely on blockchain technology.
IV. The Principles of Contracts and Money
The principles of contracts play a fundamental role in understanding the nature of money. Money, in essence, is any item of value that two parties agree upon in a contractual exchange. This foundational principle is essential in facilitating transactions between individuals, businesses, and governments. When two parties agree to exchange goods, services, or settle debts, the item they choose as money serves as a representation of value within that specific agreement.
In everyday transactions, money often takes the form of standardized currency, such as coins and banknotes issued by governments, or digital representations of value in electronic payment systems. These forms of money are universally recognized and have legal tender status, making them widely accepted for a wide range of transactions. However, it’s important to note that money’s definition as a contractual agreement highlights the flexibility and diversity of exchange methods in various economic contexts.
V. The Gold Clause (31 U.S.C. § 5118) and the Congressional Record of March 9th, 1933
The Gold Clause (31 U.S.C. § 5118) is a pivotal piece of legislation that significantly impacted the nature of monetary contracts in the United States. It prohibited the inclusion of gold clauses in contracts, which had allowed parties to specify that payments would be made in gold or its equivalent. This clause was implemented during a period of economic turmoil and the Great Depression to address financial instability and prevent hoarding of gold.
On March 9th, 1933, President Franklin D. Roosevelt signed into law the Emergency Banking Act, detailed in the Congressional Record. This act played a crucial role in the history of money in the United States by suspending the gold clause and effectively ending the ability to demand payment in gold for obligations under existing contracts. The act sought to restore confidence in the banking system and provide financial stability during challenging times.
In the Congressional Record it states the following; “Under the Federal Reserve Act obligations that are deposited as the security and gold for reserve notes are placed in the hands of the Federal Reserve agent.” Now, if the obligations are now the Security and GOLD, then they didn’t steak the gold. The redefined what Gold was. This is under 12 USC 411.
Then the Congressional Record states as follows; “Under the new law the money is issued to the banks in return for Government obligations, bills of exchange, drafts, notes, trade acceptances, and banker’s acceptances. The money will be worth 100 cents on the dollar, because it is backed by the credit of the Nation. It will represent a mortgage on all the homes and other property of all the people in the Nation.” This is 12 USC 412. They laid out just a few examples of money. This is also termed a “collateral security” which a contract in the form of money.
Conclusion
How are you going to be successful in your processes if you do not understand some of the principles? The powers of Congress to regulate money, as granted by the United States Constitution, play a pivotal role in shaping the nation’s monetary policies and ensuring the stability of the financial system. These powers have evolved to address the dynamic needs of the U.S. economy while upholding the fundamental principles of a uniform currency. Understanding the historical context and legal foundation of these powers is essential for appreciating their significance in the contemporary financial landscape. Congress’s authority in this domain is not only a constitutional mandate but also a vital instrument for maintaining the economic well-being of the United States. Additionally, money operates as a contract, embodying the principles of exchange and agreement that underpin economic transactions in society, allowing for a flexible interpretation of value in different contractual contexts. Money, as both a constitutional and contractual concept, stands as a cornerstone of the nation’s economic system, facilitating trade, commerce, and prosperity.
