Article I, section 8:
"To coin money, regulate the value thereof, and of foreign coin "

Foreign coin?

And how would they regulate the value, arbitrarily?
The market does that. Such a suggestion is
dangerous and ignorant.

--
Rich

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According to RichD <r_delaney2001@yahoo.com>:

Article I, section 8:
"To coin money, regulate the value thereof, and of foreign coin "

Foreign coin?

And how would they regulate the value, arbitrarily?
The market does that. Such a suggestion is dangerous and ignorant.

Um, I'm getting the impression that someone might be a wee bit
ignorant of the first two centuries of our country's economic history.

When the Constitution refers to money, it means silver and gold. The
dollar was defined in terms of one or the other until Nixon finally
took the US off the gold standard in 1971. In the 1700s the U.S. was a
small country with uncertain prospects, and any sensible person would
have rather had money from a credible issuer like a Britisn pound or a
Spanish dollar (informally known as pieces of eight) than whatever a
US dollar happened to be worth. It was entirely prudent to regulate
the use of those foreign coins in U.S. commerce.

The value of the dollar was so flaky that nobody was willing to use it
in international trade, and contracts were invariably written in terms
of British pounds, to the detriment of US merchants. A major reason
the Federal Reserve was created in 1913 was to stabilize the dollar
and make it a credible alternative to European currencies.

The standard book on this topic is "A Monetary History of the United
States" by Friedman and Schwartz published in 1963. I'm not always
persuaded by their politics but their grasp of the historical facts
was and is impressive.

FWIW I'm not aware of any court cases based on the foreign coin clause,
so it must not have been very controversial.

--
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John Levine, johnl@taugh.com, Primary Perpetrator of "The Internet for Dummies",
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RichD <r_delaney2001@yahoo.com> wrote:

Article I, section 8:
"To coin money, regulate the value thereof, and of foreign coin "

Foreign coin?

And how would they regulate the value, arbitrarily?
The market does that. Such a suggestion is
dangerous and ignorant.

In 1789 there was no market. Even after that the US regulated the
price of gold until 1976. Times change, technology changes and the way
issues are dealt with changes with them.

--
Stu
http://DownToEarthLawyer.com


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On April 13, Stuart O. Bronstein wrote:

Article I, section 8:
"To coin money, regulate the value thereof, and of foreign coin "
Foreign coin?
And how would they regulate the value, arbitrarily?
The market does that. Such a suggestion is dangerous and ignorant.

In 1789 there was no market. Even after that the US regulated the
price of gold until 1976.

A market exists any time two parties trade.
Here's the market:
"hey Jim, how about a haircut?"
"What are you offering?"
".1 oz of gold."
"Not worth my time. Make it .3 oz."
"That's too much. .2 oz, and that's it."
"OK"

Thus the market sets the price of gold: .2 oz. = 1 haircut
Scale this up to a billion people trading every day.

Congress can't "regulate the value", that makes no sense. In
addition, such power is an intrusion of privacy, of private contract,
which is surprising, as they were sensitive to such issues.

(leave aside the hair splitting distinction between price vs. value)

--
Rich

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"John Levine" <johnl@taugh.com> wrote:

According to RichD <r_delaney2001@yahoo.com>:

Article I, section 8:
"To coin money, regulate the value thereof, and of foreign coin "

Foreign coin?

And how would they regulate the value, arbitrarily?
The market does that. Such a suggestion is dangerous and
ignorant.

Um, I'm getting the impression that someone might be a wee bit
ignorant of the first two centuries of our country's economic
history.

When the Constitution refers to money, it means silver and gold.
The dollar was defined in terms of one or the other until Nixon
finally took the US off the gold standard in 1971. In the 1700s
the U.S. was a small country with uncertain prospects, and any
sensible person would have rather had money from a credible issuer
like a Britisn pound or a Spanish dollar (informally known as
pieces of eight) than whatever a US dollar happened to be worth.
It was entirely prudent to regulate the use of those foreign coins
in U.S. commerce.

The value of the dollar was so flaky that nobody was willing to
use it in international trade, and contracts were invariably
written in terms of British pounds, to the detriment of US
merchants. A major reason the Federal Reserve was created in 1913
was to stabilize the dollar and make it a credible alternative to
European currencies.

The standard book on this topic is "A Monetary History of the
United States" by Friedman and Schwartz published in 1963. I'm not
always persuaded by their politics but their grasp of the
historical facts was and is impressive.

FWIW I'm not aware of any court cases based on the foreign coin
clause, so it must not have been very controversial.

Lexis shows 48 cases that quote that provision of the Constitution -
too many for me to review them all. But the few I did look at didn't
deal with regulating foreign currencies.

--
Stu
http://DownToEarthLawyer.com


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On 4/14/2023 5:10 PM, RichD wrote:

On April 13, Stuart O. Bronstein wrote:

Article I, section 8:
"To coin money, regulate the value thereof, and of foreign coin "
Foreign coin?
And how would they regulate the value, arbitrarily?
The market does that. Such a suggestion is dangerous and ignorant.

In 1789 there was no market. Even after that the US regulated the
price of gold until 1976.

A market exists any time two parties trade.
Here's the market:
"hey Jim, how about a haircut?"
"What are you offering?"
".1 oz of gold."
"Not worth my time. Make it .3 oz."
"That's too much. .2 oz, and that's it."
"OK"

Thus the market sets the price of gold: .2 oz. = 1 haircut
Scale this up to a billion people trading every day.

Congress can't "regulate the value", that makes no sense. In
addition, such power is an intrusion of privacy, of private contract,
which is surprising, as they were sensitive to such issues.

(leave aside the hair splitting distinction between price vs. value)

--
Rich

If it were 1950 somebody would be charged with illegal possession of gold.

https://www.federalreservehistory.org/essays/gold-reserve-act

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On April 13, RichD wrote:

Article I, section 8:
"To coin money, regulate the value thereof, and of foreign coin "

Foreign coin?

And: https://cointelegraph.com/news/texas-lawmakers-propose-a-gold-backed-state-digital-currency

Is this a constitutional quagmire?

--
Rich

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RichD <r_delaney2001@yahoo.com> wrote:

RichD wrote:

Article I, section 8:
"To coin money, regulate the value thereof, and of foreign coin "

Foreign coin?

And:
https://cointelegraph.com/news/texas-lawmakers-propose-a-gold-backe d-state-digital-currency

Is this a constitutional quagmire?

No, it's just legally invalid.


--
Stu
http://DownToEarthLawyer.com


--
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On 4/15/2023 8:51 AM, Stuart O. Bronstein wrote:

RichD <r_delaney2001@yahoo.com> wrote:

RichD wrote:

Article I, section 8:
"To coin money, regulate the value thereof, and of foreign coin"

Foreign coin?

And:
https://cointelegraph.com/news/texas-lawmakers-propose-a-gold-backe
d-state-digital-currency

Is this a constitutional quagmire?

No, it's just legally invalid.

There actually were attempts at "Digital Gold Currency"

https://www.investopedia.com/terms/d/digital-gold-currency-dgc.asp

This one was successful for over ten years until "a U.S. federal grand
jury indicted e-gold, accusing it of serving identity thieves and child pornographers."

https://en.wikipedia.org/wiki/E-gold

I think the current digital currencies suffer many of the same problems
that closed e-gold

For actual legal references see

https://en.wikipedia.org/wiki/Digital_currency

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According to Stuart O. Bronstein <spamtrap@lexregia.com>:

RichD <r_delaney2001@yahoo.com> wrote:

RichD wrote:

Article I, section 8:
"To coin money, regulate the value thereof, and of foreign coin "

Foreign coin?

And:
https://cointelegraph.com/news/texas-lawmakers-propose-a-gold-backed-state-digital-currency

Is this a constitutional quagmire?

No, it's just legally invalid.

Article I, section 10:

No State shall ... coin Money; emit Bills of Credit; make any Thing
but gold and silver Coin a Tender in Payment of Debts; ...

If the guys in Texas have even thought about this, which I doubt, they might argue that they're just providing an easier way to pay debts in gold. There are plenty of reasons that this is obviously absurd, but in recent years your idea and mine of what is absurd and the Fifth Circuit's idea have diverged quite a lot.

--
Regards,
John Levine, johnl@taugh.com, Primary Perpetrator of "The Internet for Dummies",
Please consider the environment before reading this e-mail. https://jl.ly

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On 4/15/2023 12:06 PM, John Levine wrote:

According to Stuart O. Bronstein <spamtrap@lexregia.com>:

RichD <r_delaney2001@yahoo.com> wrote:

RichD wrote:

Article I, section 8:
"To coin money, regulate the value thereof, and of foreign coin"

Foreign coin?

And:
https://cointelegraph.com/news/texas-lawmakers-propose-a-gold-backed-state-digital-currency

Is this a constitutional quagmire?

No, it's just legally invalid.

Article I, section 10:

No State shall ... coin Money; emit Bills of Credit; make any Thing
but gold and silver Coin a Tender in Payment of Debts; ...

If the guys in Texas have even thought about this, which I doubt, they might argue that they're just providing an easier way to pay debts in gold. There are plenty of reasons that this is obviously absurd, but in recent years your idea and mine of what is absurd and the Fifth Circuit's idea have diverged quite a lot.

It all depends on definitions. Things are different in the 21 century

The U.S. Treasury classified bitcoin as a convertible decentralized
virtual currency in 2013

https://www.fincen.gov/news/testimony/statement-jennifer-shasky-calvery-director-financial-crimes-enforcement-network

The SEC allows trades in commodity backed trusts. Example

GLD: SPDR® Gold Shares an Exchange Traded Gold™ security

To add to the confusion, the CFTC classifies virtual currency as
commodities.

And last but not least

At a press conference on August 12th, 1986, US President Ronald Reagan
said, “The nine most terrifying words in the English language are ‘I’m from the government and I’m here to help.’”

The Bipartisan Policy Center: Cryptocurrency Regulation and the
118th-Congress

https://bipartisanpolicy.org/blog/crypto-and-118th-congress/

Relevant section on Stablecoins

Stablecoins, crypto assets pegged to a non-crypto asset such the U.S.
dollar, have gained considerable regulatory attention in recent years. A
major concern with stablecoins is that a large number of stablecoin
owners might try to redeem the underlying asset at once and the
stablecoin issuer will not have the reserves necessary to meet demand.
While House Financial Services Committee Chairman Patrick McHenry (R-NC)
and Ranking Member Maxine Waters (D-CA) have stated their desire to work
on bipartisan stablecoin legislation, to our knowledge, nothing has been
made public as of this writing.

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According to Roy <montanawolf@outlook.com>:

No State shall ... coin Money; emit Bills of Credit; make any Thing
but gold and silver Coin a Tender in Payment of Debts; ...

It all depends on definitions. Things are different in the 21 century

The U.S. Treasury classified bitcoin as a convertible decentralized
virtual currency in 2013

No, actually that was just one employee's opinion. To the extent the
Treasury has an opinion on Bitcoin, they consider it a commodity,
since they are quite clear that if you sell some for more than you
paid, you owe capital gains tax.

The SEC allows trades in commodity backed trusts. Example

Of course they do. Why wouldn't they? Gold, pork bellies, orange
juice, whatever. Buy and sell as you wish, pay taxes on the gains. But
all of this is irrelevant.

If you'll review the clause we're discussing is about "coin Money" and
"Payment of Debts". I have a bunch of Mexican peso coins left over
from a trip. It is 100% legal for me to own them, but I can't use them
to pay a debt.

If I owe you $100, and I offer you pesos, you can say no, just as if I
offered you bitcoins or shares in GLD. If you want you can negotiate a
trade, but if you don't want to, that's my tough luck. On the other
hand, if I offer you a $100 bill, even if you don't take it, I'm done,
I've paid. (It's slightly more complicated if you think the bill might
be bogus, but not much.)

It was not clear from that badly drafted bill if or how they planned
for their gold fund to be used for payments, but if they did, that's a
nope. If they just want to run a gold stablecoin or whatever, that
would be dumb, but it wouldn't be the dumbest thing the Texas
legislature has done.


--
Regards,
John Levine, johnl@taugh.com, Primary Perpetrator of "The Internet for Dummies",
Please consider the environment before reading this e-mail. https://jl.ly

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"John Levine" <johnl@taugh.com> wrote:

According to Roy <montanawolf@outlook.com>:

No State shall ... coin Money; emit Bills of Credit; make any
Thing but gold and silver Coin a Tender in Payment of Debts;
...

It all depends on definitions. Things are different in the 21
century

The U.S. Treasury classified bitcoin as a convertible
decentralized virtual currency in 2013

No, actually that was just one employee's opinion. To the extent
the Treasury has an opinion on Bitcoin, they consider it a
commodity, since they are quite clear that if you sell some for
more than you paid, you owe capital gains tax.

The last time I checked, there was a turf battle being waged between
the SEC, CFTC and IRS to determine which would regulate
cryptocurrency. Whoever it is, though, you're right - it will be
taxed as any kind of capital investment.

The SEC allows trades in commodity backed trusts. Example

Of course they do. Why wouldn't they? Gold, pork bellies, orange
juice, whatever. Buy and sell as you wish, pay taxes on the gains.
But all of this is irrelevant.

If you'll review the clause we're discussing is about "coin Money"
and "Payment of Debts". I have a bunch of Mexican peso coins left
over from a trip. It is 100% legal for me to own them, but I can't
use them to pay a debt.

I remember a case some years ago where casinos in Las Vegas had
agreed to allow people to use poker chips that had specific values,
at any of the participating casinos. In effect the chips were being
treated as money that could be spent anywhere. The Treasury
Department forced them to stop that. The chips were really
investments, and were being used as money, which was prohibited.

If I owe you $100, and I offer you pesos, you can say no, just as
if I offered you bitcoins or shares in GLD. If you want you can
negotiate a trade, but if you don't want to, that's my tough luck.
On the other hand, if I offer you a $100 bill, even if you don't
take it, I'm done, I've paid. (It's slightly more complicated if
you think the bill might be bogus, but not much.)

It was not clear from that badly drafted bill if or how they
planned for their gold fund to be used for payments, but if they
did, that's a nope. If they just want to run a gold stablecoin or
whatever, that would be dumb, but it wouldn't be the dumbest thing
the Texas legislature has done.

--
Stu
http://DownToEarthLawyer.com


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On May 10, John Levine wrote:

"To coin money, regulate the value thereof, and of foreign coin "
Foreign coin?
And how would they regulate the value, arbitrarily?

Congress can't "regulate the value", that makes no sense.

Only to someone completely unfamiliar with US history.
For most of our history, the value of a dollar was defined as a
specific amount of gold or silver. In the 1800s the money was
physically made from gold or silver, and a silver dollar literally
contained a dollar's worth of silver. You could take gold or
silver to the Mint where they would assay it and make it into
coins for you.

That isn't what economists mean by value.

The 'value' you describe - presumably intended by the
Constitution - is merely a promise to exchange a slip of
paper for a specific amount of gold.

Note the circularity in your statement "a silver dollar literally
contained a dollar's worth of silver." So a dollar is defined in
terms of silver, and the value of silver is defined in terms of
dollars, hmmm......

In economics, value may be defined in two ways. There's your
personal preference for various goods; e.g. you value a gallon
of ice cream over a chocolate cake. This is called utility, it ignores price.

The value of a dollar is its purchasing power: what basket
of goods will it buy? Which is a function of the productivity of
the community. And utility obviously influences market prices,
on the demand side. The price of a good might be loosely described
as the average utility, averaged across the population.

In this sense, Congress cannot regulate/dictate the value of money;
it regulates itself, per the market. (move to Zimbabwe, become an instant billionaire!)

(but... but... what about the Inflation Reduction Act?)

--
Rich

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It appears that RichD <r_delaney2001@yahoo.com> said:

On May 10, John Levine wrote:

"To coin money, regulate the value thereof, and of foreign coin "
Foreign coin?
And how would they regulate the value, arbitrarily?

Congress can't "regulate the value", that makes no sense.

Only to someone completely unfamiliar with US history.
For most of our history, the value of a dollar was defined as a
specific amount of gold or silver. In the 1800s the money was
physically made from gold or silver, and a silver dollar literally
contained a dollar's worth of silver. You could take gold or
silver to the Mint where they would assay it and make it into
coins for you.

That isn't what economists mean by value.

The 'value' you describe - presumably intended by the
Constitution - is merely a promise to exchange a slip of
paper for a specific amount of gold.

No, it really isn't. The US government did not issue paper money when
the Constitution was writted and did not start until the financial
emergency of the Civil War.

This might be a good time to go back and read about how the gold
standard worked. What you imagine modern economics to say has very
little relationship to the way money worked in the 1700s.

Other than the greenbacks during the Civil War the US government
issued almost no paper money unti the Federal Reserve was created in
1913.

--
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John Levine, johnl@taugh.com, Primary Perpetrator of "The Internet for Dummies",
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On 5/12/2023 3:36 PM, John Levine wrote:

Other than the greenbacks during the Civil War the US government
issued almost no paper money unti the Federal Reserve was created in
1913.

The US issued gold certificates from 1865 to 1933. Silver certificates
were issued from 1865 to 1964

https://en.wikipedia.org/wiki/Silver_certificate_(United_States)

There are still silver certificates in circulation.

https://en.wikipedia.org/wiki/Gold_certificate_(United_States)

"As of December 2013 the Federal Reserve reported holding $11.037
billion (face value) of these certificates."

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In misc.legal.moderated, on Fri, 12 May 2023 14:00:12 -0700 (PDT), RichD <r_delaney2001@yahoo.com> wrote:

Note the circularity in your statement "a silver dollar literally
contained a dollar's worth of silver." So a dollar is defined in
terms of silver, and the value of silver is defined in terms of
dollars, hmmm......

Wasn't this called symmetry in algebra class?**

If A = B, then B = A.

https://www.aaamath.com/ac11.htm
"Axioms of Algebra

An Axiom is a mathematical statement that is assumed to be true.
There are five basic axioms of algebra. The axioms are the reflexive
axiom, symmetric axiom, transitive axiom, additive axiom and
multiplicative axiom.
.....
Symmetric Axiom: Numbers are symmetric around the equals sign. If a = b
then b = a. This is the second axiom of equality. It follows Euclid's
Common Notion One: "Things equal to the same thing are equal to each
other.""

I dont' think symmetry is the same as circularity, because circularity
is a a logical fallacy and symmetry is a fact of life.

**at least SMSG algebra, which started with 5 or maybe 7 basic axioms. https://en.wikipedia.org/wiki/School_Mathematics_Study_Group It seems
to say it's the precursor of the New Math, but it struck me at the time, 1961-2, as just one step more basic than any math would be.

--
I think you can tell, but just to be sure:
I am not a lawyer.

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On May 10, Barry Gold wrote:

The Constitution says "No state shall...coin Money; emit Bills of Credit;

A state cannot issue bonds?

--
Rich

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On 6/7/2023 2:42 PM, RichD wrote:

On May 10, Barry Gold wrote:

The Constitution says "No state shall...coin Money; emit Bills of Credit;

A state cannot issue bonds?

A state can borrow money (issuing "bonds"). But it cannot issue anything
even vaguely like currency. From https://www.usconstitution.net/const.html :

A bill of credit is some sort of paper medium by which value is
exchanged between the government and individuals. Money is a bill of
credit, but a bill of credit need not be money. An interest-bearing
certificate that was issued by Missouri, and usable in the payment of
taxes, was thus ruled to be an unconstitutional bill of credit.

--
I do so have a memory. It's backed up on DVD... somewhere...

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