[{"command":"add_css","data":[{"rel":"stylesheet","media":"all","href":"\/sites\/default\/files\/css\/css_veuEhhb1658wti0_ZAig66JOyixENU-N9zhjLQSLfOQ.css?delta=0\u0026language=en\u0026theme=heritage_theme\u0026include=eJwrTi1LzdNPzkksLq7Uy8tPSQUAPMsGtA"}]},{"command":"invoke","selector":null,"method":"openEssay","args":["10000069","\n\n\u003Carticle about=\u0022\/constitution\/articles\/1\/essays\/70\/state-coinage\u0022 class=\u0022node node--type-constitution-essay node--promoted node--view-mode-embedded clearfix\u0022\u003E\n  \u003Ch1 class=\u0022title\u0022\u003E\u003Cspan\u003EState Coinage\u003C\/span\u003E\n\u003C\/h1\u003E\n\n      \u003Cdiv class=\u0022con-location\u0022\u003E\n      Article I, Section 10, Clause 1\n    \u003C\/div\u003E\n    \u003Cdiv class=\u0022con-essay-context\u0022\u003E\n      \n            \u003Cdiv\u003E\u003Cp\u003ENo State shall...coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts....\u003C\/p\u003E\n\u003C\/div\u003E\n      \n    \u003C\/div\u003E\n      \n  \u003Cdiv class=\u0022con-essay-body\u0022\u003E\n    \n            \u003Cdiv\u003E\u003Cp\u003EThe prohibition on the states to create any form of money signaled the shift of the power to make economic policy from the states to the federal government. In the late eighteenth century, money and trade were the prime mechanisms for regulating the economy, and the Constitution gave both exclusively to the new central government.\u003C\/p\u003E\n\n\u003Cp\u003E\u201cBills of Credit\u201d was the generic name for various forms of paper money not backed by gold or silver (known as \u201cspecie\u201d). Up until near the end of the Revolution, the states had managed, as they had when they were colonies, the issuance of paper money as a means of stimulating and cooling the economy, not unlike the practice of the modern Federal Reserve. After issuing a currency to increase investment, the colony or state would later call in, or \u201csink,\u201d the currency by levying taxes payable in that particular issue. The colony would then issue a new currency (sometimes overlapping with the collection of the previous one) to begin (or maintain) the cycle again. Inevitably, currencies became depreciated, and the complexities of determining who owed how much in which currency to whom confounded transactions and the courts. \u003Cem\u003ESee Deering v. Parker\u003C\/em\u003E (1760).\u003C\/p\u003E\n\n\u003Cp\u003EDuring the latter half of the eighteenth century, Parliament laid increasing monetary regulations on the colonies until 1764, when, as part\u0026nbsp;of its program of centralizing control in London, it put a complete ban on making bills of credit legal tender. During the Revolution, the states began issuing paper currencies again, having a somewhat better record in financing the war than Congress had with its ultimately worthless paper \u201ccontinentals.\u201d After 1783, however, specie dried up in a popular rush to purchase imported goods, and the states\u2019 currency issues exacerbated the serious depression of 1784. In early 1787, Massachusetts, which had resisted currency issues, was faced with Shays\u2019 Rebellion, whose partisans demanded new currency. In Philadelphia, the Framers were determined to put an end to the practice that they believed had contributed to so much economic and political dislocation. Rhode Island, a major issuer of paper money, refused to send delegates to the Constitutional Convention precisely because it feared monetary reform.\u003C\/p\u003E\n\n\u003Cp\u003EAt the Convention, the delegates found a proposal to allow the states to issue bills of credit with the approval of Congress not stringent enough, and James Wilson and Roger Sherman successfully moved to insert the current language. In the ratifying conventions, the Anti-Federalists quickly saw what was afoot. The states could no longer debase the currency with new issues of paper tender. Luther Martin asserted that the states would no longer be able \u201cto prevent the wealthy creditor and the monied man from totally destroying the poor though even industrious debtor.\u201d After ratification, the full force of the constitutional changes soon came to fruition; Alexander Hamilton pushed through a program by which the federal government absorbed all previous federal and state debt, established a national bank, and levied new tariffs and internal taxes.\u003C\/p\u003E\n\n\u003Cp\u003EThe need for circulating currency, however, did not abate, for the prohibition on state currency did not apply to private entities. Soon, private and state chartered banks were issuing bank notes redeemable in specie. States still could not enter the monetary field directly. In \u003Cem\u003ECraig v. Missouri\u003C\/em\u003E (1830), the Supreme Court struck down state loan offices that had issued loan-office certificates, but in \u003Cem\u003EBriscoe v. Bank of Kentucky\u003C\/em\u003E (1837), the Court upheld the constitutionality of bank notes issued from a state-chartered bank because they were not formally issued by the state. By the time of the Civil War, there were more than 1,600 state-chartered banks in the country. With never enough specie to back the notes, their value fluctuated widely. In order to control these problems and support the adoption of a federal currency, Congress levied a ten percent tax on state bank notes. After the Supreme Court upheld the tax in \u003Cem\u003EVeazie Bank v. Fenno\u003C\/em\u003E (1869), state bank notes began their journey to extinction. State banks then turned to more modern financial devices, such as deposit accounts and checks, to stay in business.\u003C\/p\u003E\n\n\u003Cp\u003EWhile states are prohibited from coining money and emitting bills of credit, they are not barred from making \u201cgold and silver Coin a Tender in Payment of debts.\u201d In recent years, legislators from no fewer than thirteen states have proposed that their state governments issue a gold and silver currency. How this might complicate the present legal and monetary structure is yet to be determined.\u003Cbr\u003E\n\u0026nbsp;\u003C\/p\u003E\n\u003C\/div\u003E\n      \n  \u003C\/div\u003E\n\n      \u003Cdiv class=\u0022con-essay-author\u0022\u003E\n      \u003Cdiv class=\u0022con-essay-author--media\u0022\u003E\n              \u003Cdiv class=\u0022con-essay-author--photo\u0022 style=\u0022background-image: url(\/sites\/default\/files\/David_Forte.jpg)\u0022\u003E\u003C\/div\u003E\n            \u003C\/div\u003E\n      \u003Cdiv class=\u0022con-essay-author--info\u0022\u003E\n              \u003Ch4 class=\u0022con-essay-author--name\u0022\u003E\n                      \u003Ca href=\u0022http:\/\/facultyprofile.csuohio.edu\/csufacultyprofile\/detail.cfm?FacultyID=D_FORTE\u0022\u003EDavid F. Forte\u003C\/a\u003E\n                  \u003C\/h4\u003E\n                  \u003Cdiv class=\u0022con-essay-author--job\u0022\u003E\n         Professor, Cleveland-Marshall College of Law\n      \u003C\/div\u003E\n            \u003C\/div\u003E\n    \u003C\/div\u003E\n\n    \u003Cdiv class=\u0022con-essay-tabs\u0022\u003E\n      \u003Cul data-tabs class=\u0022tabs\u0022\u003E\n        \u003Cli class=\u0022button-more thirds\u0022\u003E\u003Ca data-tab href=\u0022#node-10000069-taba\u0022\u003EFurther Reading\u003C\/a\u003E\u003C\/li\u003E\n        \u003Cli class=\u0022button-more thirds\u0022\u003E\u003Ca data-tab href=\u0022#node-10000069-tabb\u0022\u003ECase Law\u003C\/a\u003E\u003C\/li\u003E\n        \u003Cli class=\u0022button-more thirds\u0022\u003E\u003Ca data-tab href=\u0022#node-10000069-tabc\u0022\u003ERelated Essays\u003C\/a\u003E\u003C\/li\u003E\n      \u003C\/ul\u003E\n\n      \u003Cdiv data-tabs-content\u003E\n        \u003Cdiv data-tabs-pane class=\u0022tabs-pane\u0022 id=\u0022node-10000069-taba\u0022\u003E\n          \n      \u003Cdiv\u003E\n              \u003Cdiv\u003E\u003Cp\u003EGerald T. Dunne, Monetary Decisions of the Supreme Court (1960)\u003C\/p\u003E\n\u003C\/div\u003E\n              \u003Cdiv\u003E\u003Cp\u003EWilliam W. Folwell, \u003Ci\u003EThe Evolution of Paper Money in the United States\u003C\/i\u003E, 8 Minn. L. Rev. 561 (1924)\u003C\/p\u003E\n\u003C\/div\u003E\n              \u003Cdiv\u003E\u003Cp\u003ERobert S. Getman, \u003Ci\u003EThe Right to Use Gold Clauses\u003C\/i\u003E, 42 Brook. L. Rev. 487 (1976)\u003C\/p\u003E\n\u003C\/div\u003E\n              \u003Cdiv\u003E\u003Cp style=\u0022margin-left:16px; text-align:justify; text-indent:-11.95pt\u0022\u003E\u003Ci\u003EJohn R. Hanson II\u003C\/i\u003E, Small Notes in the American Colonies\u003Ci\u003E,\u003C\/i\u003E 17 EXPLORATIONS IN ECONOMIC HIST. 411 (1980)\u003C\/p\u003E\n\u003C\/div\u003E\n              \u003Cdiv\u003E\u003Cp\u003EAli Khan, \u003Ci\u003EThe Evolution of Money: A Story of Constitutional Nullification\u003C\/i\u003E, 67 U. Cin. L. Rev. 393 (1999)\u003C\/p\u003E\n\u003C\/div\u003E\n              \u003Cdiv\u003E\u003Cp\u003ERobert G. Natelson, Paper Money and the Original Understanding of the Coinage Clause, 31 HARV. J.L.\u0026amp; PUB. POL\u2019Y 1017 (2008)\u003Cbr\u003E\n\u0026nbsp;\u003C\/p\u003E\n\u003C\/div\u003E\n              \u003Cdiv\u003E\u003Cp style=\u0022margin-left:16px; text-indent:-11.95pt\u0022\u003ELewis D. Solomon, \u003Ci\u003ELegal Currency: A Legal and Policy\u003C\/i\u003E \u003Ci\u003EAnalysis\u003C\/i\u003E, 5\u003Ci\u003E \u003C\/i\u003EKAN. J.L. \u0026amp; PUB. POL\u2019Y\u003Ci\u003E \u003C\/i\u003E59 (1996)\u003C\/p\u003E\n\u003C\/div\u003E\n          \u003C\/div\u003E\n  \n        \u003C\/div\u003E\n        \u003Cdiv data-tabs-pane class=\u0022tabs-pane\u0022 id=\u0022node-10000069-tabb\u0022\u003E\n          \n      \u003Cdiv\u003E\n              \u003Cdiv\u003E\u003Cp\u003EDeering v. Parker, 4 Dall. App. xxiii (P.C. 1760)\u003C\/p\u003E\n\u003C\/div\u003E\n              \u003Cdiv\u003E\u003Cp\u003ECraig v. Missouri, 29 U.S. (4 Pet.) 410 (1830)\u003C\/p\u003E\n\u003C\/div\u003E\n              \u003Cdiv\u003E\u003Cp\u003EByrne v. Missouri, 33 U.S. (8 Pet.) 40 (1834)\u003C\/p\u003E\n\u003C\/div\u003E\n              \u003Cdiv\u003E\u003Cp\u003EBriscoe v. Bank of Kentucky, 36 U.S. (11 Pet.) 257 (1837)\u003C\/p\u003E\n\u003C\/div\u003E\n              \u003Cdiv\u003E\u003Cp\u003EGriffin v. Thompson, 43 U.S. (2 How.) 244 (1844)\u003C\/p\u003E\n\u003C\/div\u003E\n              \u003Cdiv\u003E\u003Cp\u003EGwin v. Breedlove, 43 U.S. (2 How.) 29 (1844)\u003C\/p\u003E\n\u003C\/div\u003E\n              \u003Cdiv\u003E\u003Cp\u003EDarrington v. Bank of Alabama, 54 U.S. (13 How.) 12 (1851)\u003C\/p\u003E\n\u003C\/div\u003E\n              \u003Cdiv\u003E\u003Cp\u003EVeazie Bank v. Fenno, 75 U.S. (8 Wall.) 533 (1869)\u003C\/p\u003E\n\u003C\/div\u003E\n              \u003Cdiv\u003E\u003Cp\u003EThe Legal-Tender Cases, 110 U.S. 421 (1884)\u003C\/p\u003E\n\u003C\/div\u003E\n              \u003Cdiv\u003E\u003Cp\u003EPoindexter v. Greenhow, 114 U.S. 269 (1885)\u003C\/p\u003E\n\u003C\/div\u003E\n              \u003Cdiv\u003E\u003Cp\u003EChaffin v. Taylor, 116 U.S. 567 (1886)\u003C\/p\u003E\n\u003C\/div\u003E\n              \u003Cdiv\u003E\u003Cp\u003EHouston \u0026amp; Texas Central Railroad v. Texas, 177 U.S. 66 (1900)\u003C\/p\u003E\n\u003C\/div\u003E\n          \u003C\/div\u003E\n  \n        \u003C\/div\u003E\n        \u003Cdiv data-tabs-pane class=\u0022tabs-pane\u0022 id=\u0022node-10000069-tabc\u0022\u003E\n                      \u003Ca href=\u0022\/essay_controller\/10000033\u0022 class=\u0022use-ajax\u0022\u003ESpending Clause\u003C\/a\u003E\n                      \u003Ca href=\u0022\/essay_controller\/10000035\u0022 class=\u0022use-ajax\u0022\u003EBorrowing Clause\u003C\/a\u003E\n                      \u003Ca href=\u0022\/essay_controller\/10000037\u0022 class=\u0022use-ajax\u0022\u003ECommerce Among the States\u003C\/a\u003E\n                      \u003Ca href=\u0022\/essay_controller\/10000041\u0022 class=\u0022use-ajax\u0022\u003ECoinage Clause\u003C\/a\u003E\n                      \u003Ca href=\u0022\/essay_controller\/10000043\u0022 class=\u0022use-ajax\u0022\u003ECounterfeiting\u003C\/a\u003E\n                  \u003C\/div\u003E\n      \u003C\/div\u003E\n    \u003C\/div\u003E\n  \n\u003C\/article\u003E\n"]}]