As things stood, therefore, when the instrument was launched, and as they stand now; first, both the Union and the States could borrow money; second, the States could not coin money, and they could not give the quality of “a tender in payment of debts” to anything but gold and silver coin; third, the Union could “coin money, regulate the value thereof, and of foreign coin.” It was not restricted as to the metal it should coin. It was not given any express power to give or to withhold from its own coin or any other, the quality of a legal tender in payment of debts; and it was not denied any usual or naturally implied power of this sort; fourth, the States could not emit bills, and, of course, they could not borrow by the aid of such bills; fifth, as to the power of Congress to emit bills, to supply a paper currency, or to make it a legal tender, the Constitution was silent.
The questions present themselves, Can Congress emit bills? Can it make them a legal tender? Can it make anything else a legal tender? In answer to the last of these questions, all agree that Congress can make coin a legal tender,—any coin. It is not restricted to its own coin; and it is not restricted to gold and silver. The power to do this is fairly, although not necessarily, implied in that of coining and regulating the value of coin. In view of the silence of the Constitution, the usual functions of coined money, and the usual powers of a government in regard to it, such a power cannot for a moment be doubted.
Can Congress emit bills and make them a legal tender? In considering the action of the Convention which framed the Constitution it is interesting to observe that this question presented itself, for the most part, not as a twofold question, but as a single one. The matter discussed was the emission of bills. Whatever this might mean, this was the dangerous thing. This was the power which it was proposed, in terms, to give, and this only; and this only is what was stricken out. If it should turn out that the power of emitting bills was not gone, by merely striking out the grant, then, of course, that act is not conclusive upon the question of giving them the legal tender quality. This power of making paper a legal tender may, indeed, be wanting for other reasons,
medium issued by a State for the purposes of common circulation. But this was afterwards restricted to bills issued by the State, and “containing a pledge of its credit.” Briscoe v. Bk. of Ky., 11 Pet. 257 (1837); Darrington v. Alabama, 13 How. 12 (1851). This change saved the State banks.