Gold and Silver Coin as Tender in Payment

Gold and silver coin as tender in payment of debts was contemplated and found sound by the founding fathers of the United States. Under Article 1, Section 8, Clause 5 of the Constitution, Congress was given power to:

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.

Additionally, Article 1, Section 10, Clause 1 of the Constitution states:

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

In 1896, George Q. Cannon spoke about any attempt to deprive gold or silver as tender in payment of debts as a “violation of the spirit of the constitution.” President Cannon stated:

A great principle is involved in this money question. The Constitution of the United States undoubtedly contemplated the use of both gold and silver as coin and as tender in the payment of debts. The framers of that instrument held the views which were then current as to the necessity of having both metals in circulation as money. . . .

We have been led to expect that there would be attempts made to infringe upon the Constitution. . . . It is well for us who reside in these mountains to divest ourselves of prejudice and look upon these questions as free from passion as possible, and cultivate a conservative feeling. It certainly would be, in my opinion, a violation of the Constitution for silver advocates to attempt to strike down gold and to deprive it of its function as money and as a tender in payment of debts. So also is it a violation of the Constitution to attempt to make gold the only metal that possesses the function as a tender in payment of debts. Gold and silver should both be upheld and used, and any attempt to deprive either of these metals of its value as a tender in payment of debts seems to me a clear violation of the spirit of the Constitution.¹

In 1971, President Richard M. Nixon canceled the Bretton Woods system and stopped the direct convertibility of the United States dollar to gold. Since that time, the government has operated on fiat money. (See Fiat Empire Videos for additional information on the Federal Reserve’s role in creating this type of currency.)

Sources:

1. Cannon, George Q. Juvenile Instructor 1896: 31:523-4.↩

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