Paper Money and the Original Understanding of the Coinage Clause
Natelson, Robert G., Harvard Journal of Law & Public Policy
"The Congress shall have Power... To coin Money, regulate the Value thereof, and of foreign Coin...."
--Constitution of the United States (1)
"Poor? Look upon his face. What call you rich? Let them coin his nose, let them coin his cheeks."
--William Shakespeare (2)
Over a century ago, the Supreme Court decided the Legal Tender Cases, holding that Congress could authorize legal tender paper money in addition to metallic coin. In recent years, some commentators have argued that this holding was incorrect as a matter of original understanding or original meaning, but that any other holding would be absolutely inconsistent with modern needs. They further argue that the impracticality of functioning without paper money demonstrates that originalism is not a workable method of constitutional interpretation.
Those who rely on the Legal Tender Cases to discredit originalism are, however, in error. This Article shows that the holding, although not all the reasoning, of those cases was fully consistent with the original understanding of the Coinage Clause. This Article tells the intriguing story of Colonial America's extraordinary monetary innovations, examines contemporaneous law and language, and shows how the paper money question was addressed during the framing and ratification of the Constitution.
INTRODUCTION I. EARLIER ARGUMENTS OVER THE QUESTION A. Summarizing Earlier Arguments B. Assessing Earlier Arguments II. THE HISTORICAL CONTEXT OF THE COINAGE CLAUSE A. English Law and Practice B. Law and Practice in the Colonies 1. Before the Currency Act of 1764 2. The Currency Act of 1764 and Aftermath 3. Kinds of American Paper Money C. Revolutionary War Emissions D. The Confederation Era E. The Constitutional Convention 1. Why a Coinage Clause Was Necessary 2. What the Convention Records Have to Say About Paper Money III. THE ORIGINAL PUBLIC MEANING OF THE COINAGE CLAUSE A. Initial Considerations B. The Clear Original Meaning and Understanding of "Regulate the Value" C. The Ambiguous Original Public Meaning of "Coin" IV. THE RATIFIERS CHOOSE A MEANING FOR "COIN" CONCLUSION
In the latter half of the nineteenth century, the Supreme Court decided a series of cases that upheld the power of Congress to issue paper money and to make it legal tender for all debts. (3) Although the last of these cases was decided in 1884, (4) several constituencies have kept the issues decided in those cases alive. One of these constituencies is a small, but vocal, group that has never been reconciled to the idea of American paper currency. They maintain that the Constitution did not authorize paper money and that the United States, as a matter of constitutional fidelity and sound policy, should return to a monetary regime centered on the coinage of precious metal. (5) More influential, perhaps, have been legal commentators who agree that the Legal Tender Cases were wrongly decided from an originalist point of view, but who do not advocate a return to metal coinage. (6) Some, such as the late Professor James Willard Hurst, employ the Legal Tender Cases to argue that pure originalism is not a workable method of constitutional interpretation. (7) They contend that courts sometimes must decide constitutional cases according to current exigencies (8) or current values, (9) rather than according to original meaning or original understanding. Finally, a third group of commentators, such as Judge Robert H. Bork (10) and more recently Professors Michael J. Gerhardt (11) and Daniel A. Farber, (12) advance the related argument that the Legal Tender Cases are among those Supreme Court decisions that should be treated as "Super Precedents"--decisions that are now so central to the social order that the Supreme Court must follow them even if they were wrongly decided from an originalist standpoint. …