Of all the issues our campaign is based on, the one that seems to draw the most confusion is Sound Money. While I understand why people are confused about the concept of Sound Money, it is sad that this is so.

The underlying basis of our entire campaign is the desire to return our nation and the American people back to a truly free and prosperous society. This society must be based on the Constitutional principle of limited government and the concept of maximum liberty consistent with order. In order for this to become a reality, we the people must agree that the Constitution is the best framework and model for how the Federal government must operate. If we can all agree to this, then one of the outcomes of returning our government to a government bound by the chains of the Constitution will be to follow the principles of sound money as laid out in that document.

So according to The Constitution of the United States, what are the principles of sound money? Let’s examine what the Constitution says about Congress’s ability to print or coin money:

Article 1, Section 8:
The Congress shall have Power . . . To coin Money, regulate the Value thereof, and of foreign Coin . . . ; To provide for the Punishment of counterfeiting the Securities and current Coin of the United States . . . .

Remember that the Constitution is a charter given by the people to the Federal Government that specifically states what that federal government is allowed to do. This is what is meant by limited and enumerated powers. There is actually no reason to put restrictions on the actions of the Federal Government, because if it is not in the Constitution then it cannot be done at all. Still our founders did not trust those in elected office to not over step their bounds. (That is why they added the first ten amendments to the Constitution.) With that in mind; what can the government do regarding money?

1) Coin money: This means that the government has the power to manufacture coins of the realm and the power to fix the quantity of precious metal in those coins. The government may not legally manufacture paper money only gold and silver coins.
2) Regulate the value thereof, and of foreign Coin: Regulate means to make regular. For example: An ounce of gold will be equal to $25.

So what about the States? The Constitution says the following about the States with regard to money:

Article 1, 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….

As stated earlier, the Constitution was designed to enumerate the duties of the Federal Government, which in simpler language means to spell out exactly what the Federal Government was allowed to do. If it is not in the Constitution, then legally they just can’t do it. The States on the other hand were allowed to do whatever they wanted unless prohibited by the Constitution. As an example the First Amendment prohibits Congress from making a law respecting an establishment of religion, but the states were free to do so if they chose. Many of them did just that. In fact the Constitution prohibits very little to the States. Article 1, Section 10 though is very explicit.

Here is what the States are specifically forbidden to do:
1) The States may not coin money.
2) The States may not emit bills of credit. Bills of credit were in fact what paper money was called in 1787 when the Constitution was being written.
3) Only gold and silver coins can be used as legal tender.

The Founders were very particular about money, because they had just come out of a period of time where paper money was being used to devalue people’s fortunes and ruin the economy. It was the founder’s vision that the federal government would have no role in the money supply other than to coin money. Furthermore it was the founder’s intent that the Federal Government would be specifically forbidden the right to issue paper money by purposely leaving out the right to “emit bills of credit”.

Our founders were very focused on the nature of money and what exactly money is. The Constitution makes it clear that money was only gold or silver. The States were forbidden from forcing citizens to accept any method of payment other than gold or silver. If they chose private banks could issue certificates backed by gold or silver, but it was up to the people to decide whether or not to accept them for payment of debt.

Fiat currency, like the Federal Reserve Notes that we use today, is not money. It is just paper. It is backed by nothing more that the faith of the people that use it. It is not money. It is not sound. Throughout history all fiat currencies have eventually ended the exact same way, and all signs indicate that our fiat dollar will end this way also. Gold and silver coins are money. Because of their intrinsic value, it is money that is by its very nature sound. Gold and silver are sound money.