Constitution - Banks

[Seven29]

Dear Members,


I am new here and hope to meet knowledgeable people who can answer my questions and help me deepen my understanding.

I am studying law, and while reading about the history of U.S. law, I came across an issue that raised some questions.

One of them concerns Article I, Section 10 of the U.S. Constitution, which prohibits states from issuing paper money. This made me wonder: who issues the U.S. dollar today, and why is this considered constitutional?

And what role does the Federal Reserve play in this context?

Thank you very much.

 

[scruffy]

You want us to do your homework for you?

 

[Seven29]

You want us to do your homework for you?

No, this isn’t part of my lesson; I’m just interested in U.S. history, and maybe it will be important later.

I mean, if no one can explain this, how can people in the U.S. tolerate it?

I might be young and inexperienced, which is why I’m asking—nobody in my circle seems to have an answer for this.

Thanks.

 

[Auld Phart]

Dear Members,


I am new here and hope to meet knowledgeable people who can answer my questions and help me deepen my understanding.

I am studying law, and while reading about the history of U.S. law, I came across an issue that raised some questions.

One of them concerns Article I, Section 10 of the U.S. Constitution, which prohibits states from issuing paper money. This made me wonder: who issues the U.S. dollar today, and why is this considered constitutional?

And what role does the Federal Reserve play in this context?

Thank you very much.

This made me wonder: who issues the U.S. dollar today, and why is this considered constitutional?

the Federal Government, as set up in the Constitution.

 

[Godboy]

Dear Members,


I am new here and hope to meet knowledgeable people who can answer my questions and help me deepen my understanding.

I am studying law, and while reading about the history of U.S. law, I came across an issue that raised some questions.

One of them concerns Article I, Section 10 of the U.S. Constitution, which prohibits states from issuing paper money. This made me wonder: who issues the U.S. dollar today, and why is this considered constitutional?

And what role does the Federal Reserve play in this context?

Thank you very much.

The feds issue money, not the states. You cant have some rogue state run by a guy like Walz to secretly start printing US dollars.

 

[Seven29]

the Federal Government, as set up in the Constitution.

But Article I, Section 10 of the U.S. Constitution forbids states from printing paper money, and the only legal tender is coins made of silver or gold.

Articel 1, Section 10:
„No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.“

The Federal Reserve is not a private bank, so its actions are considered actions of the state. This is why I can’t make sense of it.

 

[WorldWatcher]

But Article I, Section 10 of the U.S. Constitution forbids states from printing paper money, and the only legal tender is coins made of silver or gold.

Articel 1, Section 10:
„No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.“

Step back and look at context.

A1S8 (Article 1 Section 8) provides that Congress has the power to coin money, therefore A1S9 prohibits that power to the states.

Gold and silver ONLY appear in A1S9 as a limitation on the states, they do not appear in A1S8 under the powers of Congress, which means that Congress can "Coin" money out of other materials other hand gold and silver. The gold and silver limitation is only the State Government REQUIRING other forms of payment (therefore effectively "coining" their own currency"), that did not then (or now) preclude people from taking other forms of items of value in barter.

Another example of context is that the passage of ex post facto laws are prohibed both to Congress (A1S8) AND to the states under A1S9. Meaning it is explicitly prohibited at both levels.

The Federal Reserve is not a private bank, so its actions are considered actions of the state. This is why I can’t make sense of it.

I assume you mean here "action sof the state" meaning "action of the federal governemnt", not be be concused with actions of individual State Governments.

WW

 

[Seven29]

Thank you.

But doesn’t this mean that the Fed is taking powers that belong to Congress?

Or is the Federal Reserve under the authority of Congress?

 

[WorldWatcher]

Thank you.

But doesn’t this mean that the Fed is taking powers that belong to Congress?

Or is the Federal Reserve under the authority of Congress?

The Federal Reserve Bank was created by Congress in 1913.

The Federal Reserve does not coin money. That is done by the US Treasury.

WW

[EDIT: Fixed typos from phone.]

 

[rightwinger]

This made me wonder: who issues the U.S. dollar today, and why is this considered constitutional?

Read a dollar bill and it will tell you

 

[Seven29]

The Federal Reserve Bank was created by Congress in 1913.

The Federal Reserve does not coincide with money. That is fine by the US Treasury.

WW

Interesting.

The Federal Reserve Bank was created by Congress in 1913.

The Federal Reserve does not coincide with money. That is fine by the US Treasury.

WW

But it still seems like monetary policy is in the hands of the Fed, rather than in the hands of Congress.

By the way, I just found out that it was created by Congress in Washington, D.C., which isn’t part of any state.

This is confusing. Did they manage to make this compatible with the U.S. Constitution?

Or am I overthinking this?

 

[rightwinger]

By the way, I just found out that it was created by Congress in Washington, D.C., which isn’t part of any state.

What country are you in?

 

[WorldWatcher]

Interesting.

But it still seems like monetary policy is in the hands of the Fed, rather than in the hands of Congress.

You may be confusing monetary policy with coining money, they are not the same.

By the way, I just found out that it was created by Congress in Washington, D.C., which isn’t part of any state.

Correct, it is the seat of the Federal Government

This is confusing. Did they manage to make this compatible with the U.S. Constitution?

Yes.

Or am I overthinking this?

Possibly.

Serious question, where you raised in the US or are you from a foreign country trying to lean and understand the US history and economy?

WW

 

[Seven29]

What country are you in?

Washington, D.C. isn’t part of any U.S. state.

We were looking at Article I, Section 10, which prohibits the states from issuing paper money.

 

[Seven29]

You may be confusing monetary policy with coining money, they are not the same.



Correct, it is the seat of the Federal Government



Yes.



Possibly.

Serious question, where you raised in the US or are you from a foreign country trying to lean and understand the US history and economy?

WW

Last Point is right.

 

[WorldWatcher]

Last Point is right.

Last point ..." you from a foreign country trying to lean and understand the US history and economy?"

Correct?

That simply helps in understanding context of questions and helps for understanding the need for background in responding.

WW

 

[Seven29]

Last point ..." you from a foreign country trying to lean and understand the US history and economy?"

Correct?

That simply helps in understanding context of questions and helps for understanding the need for background in responding.

WW

Yes.

 

[WorldWatcher]

Yes.

Roger, best of luck with your journey.

I have to go get ready for work and will bowing out for now.

WW

 

[22lcidw]

The Federal Reserve Bank was created by Congress in 1913.

The Federal Reserve does not coin money. That is done by the US Treasury.

WW

[EDIT: Fixed typos from phone.]

The Federal Reserve is a private bank and orders the treasury to coin money. It pays for the printing of the currency. Teh currency is negative money and depends on velocity of loans. Each dollar can be loaned ten times losing 10% of value each time. It then disappears. The owners of the Federal Reserve and other central banks in other nations are trillionaires. Even more than zillionaires. Look at the interest you pay in loans. Suckers.

 

[Seven29]

The Federal Reserve is a private bank and orders the treasury to coin money. It pays for the printing of the currency. Teh currency is negative money and depends on velocity of loans. Each dollar can be loaned ten times losing 10% of value each time. It then disappears. The owners of the Federal Reserve and other central banks in other nations are trillionaires. Even more than zillionaires. Look at the interest you pay in loans. Suckers.

That’s an other perspective, but I mean the Fed isn’t really a private bank.


Also, why use “suckers”? That comes across as disrespectful.