September 17 is Constitution Day, the anniversary of the signing of the U.S. Constitution in 1787. Most of the public attention on this date focuses on individual rights, separation of powers, and the structure of government. But the Constitution also contains specific, explicit provisions about money, provisions that have been largely set aside over the past century and that sit at the heart of the sound money movement today.
This post examines what the Constitution actually says about money, why the founders wrote those provisions, what they were trying to prevent, and how the constitutional monetary framework relates to contemporary sound money tools like Goldbacks.
What the Constitution Actually Says About Money
The Constitution addresses money in two places. Article I, Section 8 grants Congress the power “To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.” This is the positive grant, the authority to create a monetary standard.
Article I, Section 10 contains the restriction: “No State shall… coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts.” This clause was not accidental or incidental. It was one of the most carefully drafted provisions in the document, written by founders who had lived through the consequences of a debased paper currency and were determined to prevent it from happening again.
The Gold and Silver Clause: Article I, Section 10
The gold and silver clause, Article I, Section 10’s prohibition on states making anything but gold and silver coin legal tender, is the constitutional basis for the modern sound money movement’s legislative activity. When states pass gold legal tender laws, they are explicitly building on this constitutional foundation. The states recognizing gold and silver as legal tender in 2026 covers the current legislative map and what these laws mean in practice.
The clause is often misread as applying only to states, which it does, literally. But sound money advocates argue that it reflects the founders’ broader intention for the American monetary system: that money should have intrinsic value, that paper money without commodity backing is inherently prone to abuse, and that the constitutional structure was designed to prevent exactly the kind of monetary debasement that has characterized the post-1971 dollar.
Why the Founders Distrusted Paper Money
The founding generation’s distrust of paper money was not ideological abstraction. It was empirical knowledge earned at high cost. They had watched the Continental Congress issue paper currency, Continental dollars, to finance the Revolutionary War, and they had watched that currency collapse to near worthlessness through unconstrained printing. The phrase ‘not worth a continental’ entered the American vocabulary as a result.
The Continental Dollar: A Cautionary Tale
The Continental dollar was issued beginning in 1775 to finance the Revolution when the Continental Congress had no power to tax. Congress printed approximately $241 million in Continentals over the course of the war. By 1780, the exchange rate had deteriorated to 40 Continental dollars for one Spanish silver dollar, a 97.5% loss of value in five years. By 1781, Continental currency was essentially worthless.
The Continental collapse was not an edge case or a unique circumstance. It was the predictable result of creating money without commodity backing and issuing it in whatever quantity political necessity demanded. The founders who drafted the Constitution had watched this happen in real time, as young adults and military officers who were being paid in currency that was rapidly becoming worthless. That experience is what produced the gold and silver clause.
What ‘Not Worth a Continental’ Really Meant
The phrase captured something important that the founders understood firsthand: paper money issued by a government with the power to print more is always subject to political pressure to print more. The discipline imposed by a commodity standard- you cannot create more gold by decree- is precisely its value as a monetary anchor. Without that anchor, the temptation to solve fiscal problems through monetary expansion is historically irresistible.
The Founders on Currency: Hamilton, Jefferson, and the Debate
The Constitutional Convention produced broad agreement on the dangers of paper money, but the founders disagreed about the best institutional structure for sound money. Alexander Hamilton favored a national bank with the power to issue currency, a position that eventually prevailed and led to the First Bank of the United States. Thomas Jefferson and James Madison strongly opposed it, arguing that a national bank would inevitably concentrate financial power and create a mechanism for monetary manipulation.
The Hamilton-Jefferson debate over monetary institutions reads remarkably like contemporary arguments between central banking advocates and sound money advocates. The specific institutional proposals have changed; the underlying tension between centralized monetary authority and commodity-constrained money has not.
How the Constitutional Currency Framework Eroded
The movement from the founders’ gold and silver framework to the current pure fiat system happened gradually, through legal decisions and political choices that each seemed justified in their specific context.
The Legal Tender Cases
The Legal Tender Acts of 1862 and 1863, passed during the Civil War to finance the Union’s military effort, authorized the issuance of paper currency (‘greenbacks’) not backed by gold or silver. The Supreme Court eventually upheld these acts in the Legal Tender Cases (1871), ruling that Congress’s monetary powers included the authority to make paper currency legal tender. This ruling created the constitutional precedent for fiat money that has governed American monetary law ever since.
1971 and the Nixon Shock
The final break with commodity backing came on August 15, 1971, when President Nixon announced that the United States would no longer redeem dollars for gold at the fixed rate established by the Bretton Woods agreement. This ‘Nixon Shock’ ended the last formal link between the dollar and any commodity. Since 1971, the dollar has been a pure fiat currency, valuable because the government says it is and because global trade is denominated in it. What happens to your dollars when the Fed prints money covers the consequences of that change for purchasing power.
What Constitutional Currency Would Look Like Today
A return to the founders’ constitutional monetary vision, gold and silver coins as the foundation of the monetary system, would look quite different from the current system, but not as radical as it might initially seem. The United States already mints gold and silver coins (American Eagles, American Buffalos) that are technically legal tender at their face values. Those face values are so far below market value that they function as collectibles rather than currency, but the infrastructure exists.
A genuine constitutional currency would require either returning to a gold-redeemable dollar (a gold standard) or explicitly recognizing gold and silver coins and commodity-backed alternatives as legal tender at market value, which is essentially what state gold legal tender laws do. It would mean that expanding the money supply requires either acquiring more gold or persuading holders of gold to part with it at a price they accept, rather than creating new dollars through computer entries at the Federal Reserve.
Goldbacks and the Constitutional Money Tradition
Goldbacks are a private-sector expression of the constitutional money tradition. They are not issued by the government and are not legal tender by statute, because they embody the core principle that the founders wrote into Article I, Section 10: money should have intrinsic value in a tangible commodity, not just in a government’s promise. Are Goldbacks sound money? The case for Goldbacks as a contemporary form of constitutional money rests on exactly this foundation.
On Constitution Day, the question the founders’ monetary provisions invite is simple: is the currency you use today ‘sound’ in the sense they intended? Does it hold its value? Can it be debased by political decision? Is there anything behind it besides a promise? For millions of Americans who hold physical gold and silver, the answer to that question is part of why they hold it. The constitutional case for gold and silver money develops this argument in full.
Frequently Asked Questions
- What does the Constitution say about money? – The Constitution addresses money in two key places. Article I, Section 8 grants Congress the power to coin money and regulate its value. Article I, Section 10 prohibits states from making anything but gold and silver coin legal tender in payment of debts. These provisions reflect the founders’ experience with the worthless Continental dollar and their intention to anchor American money to commodity value.
- What is the gold clause in the Constitution? – The gold and silver clause is Article I, Section 10 of the Constitution, which states that no state shall make anything but gold and silver coin a tender in payment of debts. Sound money advocates cite this provision as the constitutional foundation for state gold legal tender laws and as evidence of the founders’ original monetary intent that American currency should be backed by, or consist of, precious metals.
- Did the founding fathers support a gold standard? – Broadly, yes. The founders were deeply skeptical of paper money based on their experience with the Continental dollar’s collapse during the Revolution. The Constitution’s monetary provisions reflect a strong preference for commodity-backed currency. They debated the institutional structure (Hamilton favored a national bank; Jefferson opposed it), but there was broad agreement that paper money without commodity backing was dangerous.
- What happened to constitutional money in the US? – The constitutional gold and silver framework was gradually dismantled through legal decisions (the Legal Tender Cases of 1871 upholding Civil War greenbacks), the Federal Reserve Act of 1913, the gold confiscation and dollar devaluation of 1933-34, and finally the Nixon Shock of 1971, which ended dollar-to-gold convertibility entirely. Since 1971, the U.S. dollar has been a pure fiat currency with no commodity backing.
- What is constitutional silver or gold? – “Constitutional silver” and “constitutional gold” are terms used by sound money advocates to describe pre-1965 U.S. coins containing 90% silver and gold coins, respectively, framing them as the monetary standard the Constitution originally intended. The terminology emphasizes that these coins were the actual money of the constitutional era and that holding them is a way of preserving wealth in the monetary form the founders specified.
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