Borrowing Power versus Fiscal Power
Clauses 5 and 6. The Congress shall have Power *** To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.
*** To provide for the Punishment of counterfeiting the Securities and current Coin of the United States.
FISCAL AND MONETARY POWERS OF CONGRESS
Coinage, Weights, and Measures
The power to coin money and regulate the value thereof has been broadly construed to authorize regulation of every phase of the subject of currency. Congress may charter banks and endow them with the right to issue circulating notes,1369 and it may restrain the circulation of notes not issued under its own authority.1370 To this end it may impose a prohibitive tax upon the circulation of the notes of state banks1371 or of municipal corporations.1372 It may require the surrender of gold coin and of gold certificates in exchange for other currency not redeemable in gold. A plaintiff who sought payment for the gold coin and certificates thus surrendered in an amount measured by the higher market value of gold was denied recovery on the ground that he had not proved that he would suffer any actual loss by being compelled to accept an equivalent amount of other currency.1373 Inasmuch as every contract for the payment of money, simply, is necessarily subject to the constitutional power of the government over the currency, whatever that power may be, and the obligation of the parties is, therefore, assumed with reference to that power,1374 the Supreme Court sustained the power of Congress to make Treasury notes legal tender in satisfaction of antecedent debts,1375 and, many years later, to abrogate the clauses in private contracts calling for payment in gold coin, even though such contracts were executed before the legislation was passed.1376 The power to coin money also imports authority to maintain such coinage as a medium of exchange at home, and to forbid its diversion to other uses by defacement, melting or exportation.1377
1369 McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316 (1819).
1370 Veazie Bank v. Fenno, 75 U.S. (8 Wall.) 533 (1869).
1371 75 U.S. at 548.
1372 National Bank v. United States, 101 U.S. 1 (1880).
1373 Nortz v. United States, 249 U.S. 317 (1935).
1375 Legal Tender Cases (Knox v. Lee), 79 U.S. (12 Wall.) 457 (1871).
1376 Norman v. Baltimore & O. R.R., 294 U.S. 240 (1935).
1377 Ling Su Fan v. United States, 218 U.S. 302 (1910).
Punishment of Counterfeiting
In its affirmative aspect, this clause has been given a narrow interpretation; it has been held not to cover the circulation of counterfeit coin or the possession of equipment susceptible of use for making counterfeit coin.1378 At the same time, the Supreme Court has rebuffed attempts to read into this provision a limitation upon either the power of the States or upon the powers of Congress under the preceding clause. It has ruled that a State may punish the issuance of forged coins.1379 On the ground that the power of Congress to coin money imports the correspondent and necessary power and obligation to protect and to preserve in its purity this constitutional currency for the benefit of the nation,1380 it has sustained federal statutes penalizing the importation or circulation of counterfeit coin,1381 or the willing and conscious possession of dies in the likeness of those used for making coins of the United States.1382 In short, the above clause is entirely superfluous. Congress would have had the power it purports to confer under the necessary and proper clause; and the same is the case with the other enumerated crimes it is authorized to punish. The enumeration was unnecessary and is not exclusive.1383
Borrowing Power Versus Fiscal Power
Usually the aggregate of the fiscal and monetary powers of the National Government—to lay and collect taxes, to borrow money and to coin money and regulate the value thereof—have reinforced each other, and, cemented by the necessary and proper clause, have provided a secure foundation for acts of Congress chartering banks and other financial institutions,1384 or making its treasury notes legal tender in the payment of antecedent debts.1385 But in 1935, the opposite situation arose—one in which the power to regulate the value of money collided with the obligation incurred in the exercise of the power to borrow money. By a vote of eight-to-one the Supreme Court held that the obligation assumed by the exercise of the latter was paramount, and could not be repudiated to effectuate the monetary policies of Congress.1386 In a concurring opinion, Justice Stone declined to join with the majority in suggesting that the exercise of the sovereign power to borrow money on credit, which does not override the sovereign immunity from suit, may nevertheless preclude or impede the exercise of another sovereign power, to regulate the value of money; or to suggest that although there is and can be no present cause of action upon the repudiated gold clause, its obligation is nevertheless, in some manner and to some extent, not stated, superior to the power to regulate the currency which we now hold to be superior to the obligation of the bonds.1387 However, with a view to inducing purchase of savings bonds, the sale of which is essential to successful management of the national debt, Congress is competent to authorize issuance of regulations creating a right of survivorship in such bonds registered in co-ownership form, and such regulations preempt provisions of state law prohibiting married couples from utilizing the survivorship privilege whenever bonds are paid out of community property.1388
1378 United States v. Marigold, 50 U.S. (9 How.), 560, 568 (1850).
1379 Fox v. Ohio, 46 U.S. (5 How.) 410 (1847).
1382 Baender v. Barnett, 255 U.S. 224 (1921).
1384 McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 407 (1819); Osborn v. Bank of the United States, 22 U.S. (9 Wheat.) 737, 861 (1824); Farmers’ & Mechanics’ Nat. Bank v. Dearing, 91 U.S. 29, 33 (1875); Smith v. Kansas City Title Co., 255 U.S. 180, 208 (1921).