Monopolies and the People

by D. C. Cloud

Discretion, to some extent, in prescribing the value of the coins minted, is beyond doubt vested in congress, but the plain intent of the constitution is that congress, in determining that matter, shall be governed chiefly by the weight and intrinsic value of the coins, as it is clear that if the stamped value of the same should much exceed the real value of gold and silver not coined, the minted coins would immediately cease to be either current coins or a standard of value as contemplated by the constitution. Commercial transactions imperiously require a standard of value, and the commercial world, at a very early period in civilization, adopted gold and silver as the true standard for that purpose, and the standard originally adopted has ever since continued to be so regarded by universal consent to the present time.

Paper emissions have, at one time or another, been authorized and employed as currency by most commercial nations, and by no government, past or present, more extensively than by the United States, and yet it is safe to affirm that all experience in its use as a circulating medium has demonstrated the proposition that it cannot by any legislation, however stringent, be made a standard of value or the just equivalent of gold and silver. Attempts of the kind have always failed, and no body of men, whether in public or private stations, ever had more instructive teachings of the truth of that remark than the patriotic men who framed the federal constitution, as they had seen the power to emit bills of credit freely exercised during the war of the Revolution, not only by the confederation, but also by the states, and knew from bitter experience its calamitous effects and the utter worthlessness of such a circulating medium as a standard of value. Such men so instructed could not have done otherwise than they did do, which was to provide an irrepealable standard of value, to be coined from gold and silver, leaving as little upon the subject to the discretion of congress as was consistent with a wise forecast and an invincible determination that the essential principles of the constitution should be perpetual as the means to secure the blessings of liberty to themselves and their posterity.

Associated as the grant to coin money and regulate the value thereof is with the grant to fix the standard of weights and measures, the conclusion, when that fact is properly weighed in connection with the words of the grant, is irresistible that the purpose of the framers of the constitution was to provide a permanent standard of value which should, at all times and under all circumstances, consist of coin, fabricated and stamped, from gold and silver, by authority of law, and that they intended at the same time to withhold from congress, as well as from the States, the power to substitute any other money as a standard of value in matters of finance, business, trade, or commerce.

Support to that view may also be drawn from the last words of the clause giving congress the unrestricted power to regulate the value of foreign coin, as it would be difficult if not impossible to give full effect to the standard of value prescribed by the constitution, in times of fluctuation, if the circulating medium could be supplied by foreign coins not subject to any congressional regulation as to their value.

Exclusive power to regulate the alloy and value of the coin struck by their own authority, or by the authority of the states, was vested in congress under the confederation, but the congress was prohibited from enacting any regulation as to the value of the coins unless nine states assented to the proposed regulation.

Subject to the power of congress to pass such regulations it is unquestionably true that the states, under the confederation as well as the United States, possessed the power to coin money, but the constitution, when it was adopted, denied to the states all authority upon the subject, and also ordained that they should not make anything but gold and silver coin a tender in payment of debts.

Beyond all doubt the framers of the constitution intended that the money unit of the United States, for measuring values, should be one dollar, as the word dollar in the plural form is employed in the body of the constitution, and also in the seventh amendment, recommended by congress at its first session after the constitution was adopted. Two years before that, to-wit, July 6, 1785, the congress of the confederation enacted that the money unit of the United States should "be one dollar," and one year later, to-wit, August 8, 1786, they established the standard for gold and silver, and also provided that the money of account of the United States should correspond with the coins established by law.

On the 4th of March, 1789, congress first assembled under the constitution, and proceeded without unnecessary delay to enact such laws as were necessary to put the government in operation which the constitution had ordained and established. Ordinances had been passed during the confederation to organize the executive departments, and for the establishment of a mint, but the new constitution did not perpetuate any of those laws, and yet congress continued to legislate for a period of three years before any new law was passed prescribing the money unit or the money of account, either for "the public offices" or for the courts. Throughout that period it must have been understood that those matters were impliedly regulated by the constitution, as tariffs were enacted, tonnage duties imposed, laws passed for the collection of duties, the several executive departments created, and the judiciary of the United States organized and empowered to exercise full jurisdiction under the constitution.

Duties of tonnage and import duties were required, by the act of the 31st of July, 1789, to be paid "in gold and silver coin," and congress, in the same act, adopted comprehensive regulations as to the value of foreign coin, but no provision was made for coining money or for a standard of value, except so far as that subject is involved in the regulation as to the value of foreign coin, or for a money unit, nor was any regulation prescribed as to the money of account. Revenue for the support of the government, under those regulations, was to be derived solely from duties of tonnage and import duties, and the express provision was that those duties should be collected in gold and silver coin.

Legislation under the constitution had proceeded thus far before the treasury department was created. Treasury regulations for the collection, safe-keeping, and disbursement of the public moneys became indispensable, and congress, on the 2d September, 1789, passed the act to establish the treasury department, which has ever since remained in force. By that act, the secretary of the treasury is declared to be the head of the department, and it is made his duty, among other things, to digest and prepare plans for the improvement and management of the public finances and for the support of the public credit; to prepare and report estimates of the public revenue and of the public expenditures; to superintend the collection of the revenue; to prescribe forms of keeping and stating accounts and for making returns; to grant all warrants for moneys to be issued from the treasury, in pursuance of appropriations by law, and to perform all such services relative to the finances as he shall be directed to perform.