March 24, 2011 – Article I, Section 08, Clause 05-06 of the United States Constitution – Guest Essayist: Troy Kickler, Founding Director of North Carolina History Project and Editor of northcarolinahistory.org
Article 1, Section 8, Clauses 5-6
5: To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
6: To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;
When the U.S. Constitution was drafted at the Constitutional Convention of 1787 and then submitted to the states to ratify, convention delegates attempted to correct what they considered to be weaknesses in the Articles of Confederation. They worked to strengthen the national government’s role in monetary policy and eliminate factors that might prevent a unified American economy, with the states working in concert. Three steps to achieve those goals included the clauses pertaining to the coinage of money, a standard of weights and measurements, and the punishment of counterfeiting
Under the Articles of Confederation, the national government and the states had the authority to coin money. But in Article 1, Section 8, the enumerative article that gives certain powers to the United States government, the Constitution specifies that Congress have the exclusive right to coin money.
During the Revolutionary War (1776-1783), states had accumulated much debt and some had difficulty paying for their war costs. As a result, state governments issued bills of credit to provide a form of debt repayment. Meanwhile during the 1780s, inflation started soaring. The issuance of paper money, North Carolina Founder Hugh Williamson writes in his 1788 essay, “Remarks on the New Plan of Government,” contributed to a ruinous economy and a loss of honor on the global stage. Convention delegates, therefore, included the coinage clause as a means to stop inflationary measures and bills of credit that abounded across the states. (Another clause–Article 1, Section 10–prevents states from issuing bills of credit and paper money.)
Although paper money is commonplace in today’s world, it is absent from Article 1, Section 8. The Founders were familiar with the practice of printing money and more than a few had definite opinions regarding the practice. Some scholars have suggested and even argued that its omission indicates that Congress does not have the authority to print paper money or issue bills of credit. A series of Supreme Court cases in the late 1800s, including Knox v. Lee (1871) and Julliard v. Greenman (1884), however, expanded the government’s role in monetary policy; the Court ruled that the power was inherent in a sovereign government.
In 1787, convention delegates also included the weights and measurements clause to promote uniformity in trade. Allowing states to separately value foreign currency and create individual exchange rates, writes Joseph Story in Commentaries on the Constitution (1833), invited “infinite embarrassment and vexations in the course of trade.” A uniform system ensured national honor and also lessened the chances that the innocent would be subjected to “the grossest frauds.” Indeed, a fixed standard removes confusion in the market place and limits the efforts of the deceitful.
The Framers also believed that a Congressional authority to value foreign coin helped ensure uniformity in trade. In Federalist 42, James Madison feared that the “proposed uniformity in the value of the current coin might be destroyed by subjecting that of foreign coin to the different regulations of the different States.” To Madison, the clause was a needed corrective. It reduced, if not eliminated, monetary confusion and bolstered the American economy.
In the essay, Madison also links the constitutional provision for giving the national government the authority to punish counterfeiting with the weights and measurements clause. Both were necessary to secure the value of American coin and eliminate confusion in trade.
Some scholars have contended that the counterfeiting clause is superfluous; the authority to punish counterfeiting is inherent in the power to regulate coinage, the argument goes. Legal scholar David F. Forte, however, points out that the Framers included it for three reasons: to distinguish counterfeiting from treason, as it had been considered in England; to ensure that Congress had authority over international incidents on American soil that involved counterfeiting of foreign currency; and to ensure national supremacy in monetary policy.
The coinage, weights and measurement, and counterfeiting clauses solved various commercial and monetary problems, and they eliminated confusion in market places by enumerating certain powers to the national government. They also were symbolic, buttressing federal supremacy in monetary policy.
Troy Kickler, Ph.D., is the Founding Director of North Carolina History Project and Editor of northcarolinahistory.org