..."to borrow money on the credit of the United States"** is the power to raise money for the public use on a pledge of the public credit...It includes the power to issue, in return for the money borrowed, the obligations of the United States in any appropriate form, of stock, bonds, bills or notes...Congress has authority to issue these obligations in a form adapted to circulation from hand to hand in the ordinary transactions of commerce and business. In order to promote and facilitate such circulation...it may provide for their redemption in coin or bonds, and may make them receivable in payment of debts to the government (my emphasis). So much is settled beyond doubt, and was asserted or...by the judges who dissented from the decision in the Legal-tender cases, as well as by those who concurred in that decision. [110 U.S. 421 at 444-5].

"By the constitution of the United States, the several states are prohibited from coining money, emitting bills of credit, or making anything but gold and silver coin a tender in payment of debts. But no intention can be inferred from this to deny to congress either of these powers." [110 U.S. 421 at 446] (the fed likes to quote this line).

"The states are prohibited from emitting bills of credit; but congress, which is neither expressly authorized nor expressly forbidden to do so, has, as we have already seen, been held to have the power of emitting bills of credit, and of making every provision for their circulation as currency, short of giving them the quality of legal tender for private debts..." [emphasis added] [110 U.S. 421 at 447]

"It appears to us to follow, as a logical (?)* and necessary (?)* consequence, that congress has the power to issue the obligations of the United States in such form, and to impress upon them such qualities as currency for the purchase of merchandise and the payment of debts, as accord with the usage of sovereign(?) governments. The power, as incident to the power of borrowing money, and issuing bills or notes of the government for money borrowed, of impressing upon those bills or notes the quality of being a legal tender for the payment of private debts, was a power universally understood to belong to sovereignty, in Europe and America, at the time of the framing and adoption of the constitution of the United States." [110 U.S. 421 at 447]

"If there be anything in the history of the constitution which can be established with moral certainty, it is that the framers of that instrument intended to prohibit the issue of legal-tender notes both by the general government and by the states..." [110 U.S. 421 at 451]

"During the revolution and the period of the old confederation, the continental congress issued bills of credit, and upon its recommendation the states made them a legal tender, and the refusal to receive them an extinguishment of the debts [emphasis added] for which they were offered. They also enacted severe penalties...Yet this legislation proved ineffectual; the universal law of currency prevailed, which makes promises of money valuable only as they are convertible into coin. The notes depreciated until they became valueless in the hands of their possessors. So it always will be; legislative declaration cannot make the promise of a thing the equivalent of the thing itself." [110 U.S. 421 at 451-2]

"...authority to issue bills of credit that should be legal tender was refused to the general government ... It was Madison who decided the vote of Virginia, and he has left his testimony that ‘the pretext for paper currency, and particularly for making the bills a tender, either for public or private debts, was cut off.’ This is the interpretation of the clause made at the time of its adoption, alike by its authors and by its opponents, accepted by all the statesmen of that age, not open to dispute because too clear for argument**, and never disputed so long as any one man who took part in framing the constitution remained alive. History cannot name a man who has gained enduring honor by causing the issue of paper money. Wherever such paper has been employed it has, in every case, thrown upon its authors the burden of exculpation under the plea of pressing necessity." [110 U.S. 421 at 453-4]

"Currency..includes not only gold and silver and bank bills, but bills of exchange also. It may include all that adjusts exchanges and settles balances in the operations of trade and business; but if we understand by currency the legal money of the country, and that which constitutes a legal tender for debts, and is the standard measure of value, then undoubtedly nothing is included but gold and silver...This is a constitutional principle, perfectly plain and of the highest importance. The states are expressly prohibited from making anything but gold and silver a legal tender in payment of debts; and although no such express prohibition is applied to congress, yet, as congress has no power granted to it in this respect but to coin money and to regulate the value of foreign coins, it clearly has no power to substitute paper or anything else for coin as a tender...The legal tender, therefore, the constititutional standard of value, is established and cannot be overthrown." 4 Webster’s Works, 271, quoted in 110 U.S. 421 at 454-6.

"The government, in substance, says to parties with whom it deals: Lend us your money...and we will ultimately pay you, and as evidence of it we will give you our notes...and enable you to transfer them; we will also receive them for certain demands due to us. In all this matter there is only a dealing between the government and the individuals who trust it. The transaction concerns no others. The power which authorizes it is a very different one from a power to deal between parties to private contracts in which the government is not interested, and to compel the receipt of these promises to pay in place of the money for which the contracts stipulated. This latter power is not an incident to the former; it is a distinct and far greater power. There is no legal connection between the two — between the power to borrow from those willing to lend and the power to interfere with the independent contracts of others. The possession of this latter power would justify the interference of the government with any rights of property of other parties [emphasis added], under the pretense that its allowance** to the holders of the notes would lead to their more ready acceptance, and thus furnish the needed means**." [110 U.S. 421 at 461-1]

"Money is not only a medium of exchange, but it is a standard of value. Nothing can be such standard which has not intrinsic value, or which is subject to frequent changes in value. From the earliest period in the history of civilized nations we find pieces of gold and silver used as money...There can be no adequate substitute for these metals. Says Mr. Webster, in a speech made in the house of representatives in 1815: ‘The precious metals alone answer these purposes. They alone, therefore, are money, and whatever else is to perform the functions of money must be their representative, and capable of being turned in them at will. So long as bank paper retains this quality it is a substitute for money; divested of this, nothing can give it that character’. 3 Webster’s Works, 41." [110 U.S. 421 at 462-3]

"We all know that the value of the notes of the government in the market, and in the commercial world generally, depends upon their convertibility on demand into coin; and as confidence in such convertibility increases of diminishes, so does the exchangeable value of the notes vary. So far from becoming themselves standards of value by reason of the legislative declaration to that effect, their own value is measured by the facility with which they can be exchanged into that which alone is regarded as money by the commercial world. They are promises of money, but they are not money in the sense of the constitution." [110 U.S. 421 at 464]

"The opinion (i.e. majority opinion written by J. Gray) not only declares that it is in the power of congress to make the notes of the government a legal tender and a standard of value, but that under the power to coin money and regulate the value thereof, congress may issue coins of the same denominations as those now already current, but of less intrinsic value, by reason of containing a less weight of the precious metals, and thereby enable debtors to discharge their debts by payment of coins of less real value....Any such declaration...would be not only utterly inoperative in fact, but a shameful disregard of its [i.e., Congress’] constitutional duty. As I said on a former occasion: ‘The power to coin money, as declared by this court, is a great trust devolved upon congress, carrying with it the duty of creating and maintaining a uniform standard of value throughout the Union, and it would be a manifest abuse of this trust to give to the coins issued by its authority any other than their real value. By debasing the coins, when once the standard is fixed, is meant giving to the coins by their form and impress a certificate of their having a relation to that standard different from that which in truth they possess; in other words, giving to the coins a false certificate of their value. Arbitrary and profligate governments have often resorted to this miserable scheme of robbery, which Mill designates as a shallow and impudent artifice, "the least covert of all modes of knavery, which consists in calling a shilling a pound, that a debt of one hundred pounds may be canceled by the payment of one hundred shillings."’ No such debasement has ever been attempted in this country, and none ever will be so long as any sentiment of honor influences the governing power of the nation.’ [110 U.S. 421 at 465-6]

"But beyond and above all the objections which I have stated to the decision recognizing a power in congress to impart the legal-tender quality to the notes of the government, is my objection to the rule of construction, adopted by the court to reach its conclusions — a rule which, fully carried out, would change the whole nature of our constitution, and break down the barriers which separate a government of limited from one of unlimited powers...The framers of the constitution, as I have said, were profoundly impressed with the evils which had resulted from the vicious legislation of the states making notes a legal tender, and they determined that such a power should not exist any longer. They therefore prohibited the states from exercising it, and they refused to grant it to the new government which they created. Of what purpose is it, then, to refer to the exercise of the power by the absolute or the limited governments of Europe, or by the states previous to out constitution? Congress can exercise no power by virtue of any supposed inherent sovereignty in the general government...The power to commit violence, perpetrate injustice, take private property by force without compensation to the owner, and compel the receipt of promises to pay in place of money, may be exercised, as it often has been, by irresponsible authority, but it cannot be considered as belonging to a government founded upon law. But be that as it may, there is no such thing as a power of inherent sovereignty in the government of the United States. It is a government of delegated powers, supreme within its prescribed sphere, but powerless outside of it. In this country, sovereignty resides in the people, and congress can exercise no power which they have not, by their constitution, intrusted to it; all else is withheld." [110 U.S. 421 at 466-7]

"The doctrine that a power not expressly forbidden may be exercised would, as I have observed, change the character of our government. If I have read the constitution aright...the true doctrine is the very opposite of this. If the power is not in terms granted, and is not necessary and proper for the exercise of a power which is thus granted, it does not exist." [110 U.S. 421 at 467-8]

"From the decision of the court I see only evil likely to follow. There have been times within the memory of all of us when the legal-tender notes of the United States were not exchangeable for more than one-half of their nominal value. The possibility of such depreciation will always attend paper money. This inborn infirmity no mere legislative declaration can cure. If congress has the power to make the notes a legal tender and to pass as money or its equivalent, why should not a sufficient amount be issued to pay the bonds of the United States as they mature? Why pay interest on the millions of dollars of bonds now due when congress can in one day make the money to pay the principal? And why should there be any restraint upon unlimited appropriations by the government for all imaginary schemes of public improvement, if the printing-press can furnish the money that is needed for them?" [110 U.S. 421 at 470]

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