Legal Tender Laws and the Constitution

18. Feb, 2010
Comments 16

Editor’s Note: Introduced in South Carolina legislature is House Bill 4501 (H4501), which if passed would make Gold and Silver Coin Legal Tender in the state. Cited as authority in the legislation is Article I, Section 10 of the Constitution and the principle of reserved powers under the 10th Amendment.

A number of other states are also considering similar legislation – click here to view the Tenth Amendment Center’s Constitutional Tender Laws Tracking Page.

The article below is an excerpt of a longer essay written by Michael Rozeff for LewRockwell.com in 2008. It covers much of the long history of legal tender laws in the U.S.

Inherent Power and Legal Tender
by Michael Rozeff

Before there were Federal Reserve notes (our current paper money instrument), there were U.S. notes. These were issued by the U.S. Treasury, not the Federal Reserve, which is a central bank created by Congressional action.

Looking at a clear picture of a $20 U.S. note, we see at the top “Legal Tender for Twenty Dollars.â€