The Federal Reserve’s structure and actions, enabled by Congress, are unconstitutional under a textualist and originalist reading of the Constitution, as well as under federal law. The Fed’s constant devaluation of the dollar through inflation not only fails to fix a stable monetary standard but also contravenes the Coinage Act’s definition of the dollar, undermining the Framers’ intent to protect economic stability through a metallic currency. A court applying strict constitutional scrutiny should invalidate this delegation and restore Congress’s direct control over the nation’s money, ensuring it adheres to the gold and silver standard mandated by the Constitution and statute.

The argument against Congress delegating its exclusive constitutional authority to coin money—specifically gold and silver, as implied by historical context—to the privately-owned U.S. Federal Reserve (Fed) can be constructed on constitutional, historical, and structural grounds. While the Fed’s authority has been upheld in practice, a potent legal argument can challenge this delegation by invoking the Constitution’s text, the non-delegation doctrine, and the Fed’s quasi-private nature. Below are the strongest legal arguments, rooted in constitutional principles and historical intent, presented as a formal legal critique.

Argument 1: Violation of Article I, Section 8, Clause 5 – Exclusive Authority to Coin Money as Gold and Silver

Constitutional Text and Original Intent:

Article I, Section 8, Clause 5 grants Congress the exclusive power "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures." The historical context, reinforced by Article I, Section 10, Clause 1 (prohibiting states from making anything but "gold and silver Coin a Tender in Payment of Debts"), indicates that "coin Money" meant creating physical currency in gold and silver. The Framers intended a metallic standard to ensure economic stability, as evidenced by their rejection of paper money after the inflationary collapse of the Continental dollar during the Revolutionary War.

Federal Reserve’s Fiat Currency: The Federal Reserve issues Federal Reserve Notes, a fiat currency not backed by gold or silver since the U.S. abandoned the gold standard (domestically in 1933, internationally in 1971). By delegating its authority to the Fed, Congress has allowed the creation of paper money untethered to the constitutional standard of gold and silver, violating the plain text and original meaning of Article I, Section 8, Clause 5.

Legal Violation: Congress’s delegation exceeds its enumerated power by redefining "coin Money" as fiat currency, rendering Article I, Section 10’s gold and silver requirement meaningless. The Supreme Court’s broad interpretation of implied powers in McCulloch v. Maryland (1819) cannot justify this deviation, as it fundamentally alters the constitutional definition of money.

Argument 2: Non-Delegation Doctrine Violation – Abdication of Core Constitutional Duty

Non-Delegation Doctrine:

Under A.L.A. Schechter Poultry Corp. v. United States (1935), Congress cannot delegate its essential legislative functions without an "intelligible principle." The power to coin money and regulate its value is a core legislative function, as it shapes the nation’s economy and affects taxation, commerce, and property rights. The Federal Reserve Act’s vague objectives (e.g., price stability, maximum employment) do not sufficiently constrain the Fed’s discretion to issue fiat money and devalue the currency, effectively delegating unchecked legislative power.

Core Function: The Framers placed monetary authority in Congress, an elected body, to ensure democratic accountability. Delegating this power to the Fed, which can create money and influence its value through inflation, violates the non-delegation doctrine by transferring a quintessential legislative function.

Modern Context: Justices like Neil Gorsuch, in Gundy v. United States (2019), have signaled a willingness to revive a stricter non-delegation doctrine for major policy decisions. The Fed’s authority to redefine money as fiat currency is a major policy shift that should remain with Congress.

Argument 3: The Federal Reserve’s Quasi-Private Nature Violates Democratic Accountability

Private Delegation:

The Fed’s regional banks are owned by private member banks, which hold stock and receive dividends (12 U.S.C. § 289). This quasi-private structure undermines the accountability required for exercising a core constitutional power like coining money.

Precedent: In Schechter and Carter v. Carter Coal Co. (1936), the Court struck down delegations to private entities for lacking public accountability. The Fed’s private elements—regional bank boards influenced by private bankers—violate this principle by allowing private interests to control the money supply.

Due Process: The Fed’s actions, like devaluing the dollar through inflation, impose a hidden tax without legislative oversight, violating due process under the Fifth Amendment by denying citizens the procedural safeguards of public deliberation.

Argument 4: The Federal Reserve’s Issuance of Fiat Currency Undermines Constitutional Limits on Legal Tender

Legal Tender and Article I, Section 10:

Article I, Section 10, Clause 1 prohibits states from making anything but gold and silver coin legal tender, reflecting the Framers’ intent for a metallic standard. By delegating to the Fed the power to issue fiat Federal Reserve Notes (declared legal tender under 31 U.S.C. § 5103), Congress has enabled a system that circumvents this design.

Historical Intent: The Framers’ rejection of paper money, coupled with the Coinage Act of 1792’s definition of the dollar in gold and silver, underscores that fiat currency deviates from the constitutional framework.

Legal Tender Cases Misapplied: The Legal Tender Cases (1871-1884) upheld Congress’s issuance of paper money during wartime, but the Fed’s ongoing issuance of fiat currency by a quasi-private entity in peacetime lacks such justification and exceeds constitutional limits.

Argument 5: The Federal Reserve’s Actions Constitute an Unconstitutional Tax

Inflation as a Tax:

The Fed’s expansion of the money supply increases inflation, acting as a de facto tax by reducing purchasing power. This "inflation tax" bypasses Article I, Section 8, Clause 1’s requirement that taxes originate in Congress, violating separation of powers and procedural safeguards like the Origination Clause (Article I, Section 7, Clause 1).

Argument 6: Failure to Fix the Standard of Weights and Measures

Constitutional Mandate:

Article I, Section 8, Clause 5 also requires Congress to "fix the Standard of Weights and Measures." This clause, paired with the power to coin money, reflects the Framers’ intent to establish a uniform and stable monetary standard, historically tied to gold and silver, which are measurable by weight (e.g., grains or ounces). The Framers viewed this as essential to ensure consistency in currency value, akin to standardizing physical measurements like pounds or yards, to facilitate commerce and prevent fraud.

Federal Reserve’s Devaluation: The Fed’s issuance of fiat currency, combined with its policies like quantitative easing, leads to constant devaluation of the dollar through inflation. Since the Fed’s creation in 1913, the dollar has lost over 96% of its purchasing power (e.g., $1 in 1913 is worth about 3 cents today, per the Bureau of Labor Statistics CPI data). This devaluation undermines the constitutional requirement to "fix" a standard, as the dollar’s value fluctuates based on the Fed’s discretionary monetary policies rather than a stable, measurable standard like gold or silver.

Legal Violation: By delegating its authority to the Fed, Congress has failed to fulfill its constitutional duty to fix a stable monetary standard. The Fed’s ability to alter the dollar’s value through inflation or deflation violates the Framers’ intent for a fixed standard, as it introduces volatility and uncertainty into the currency’s value, contrary to the uniformity implied by "fix the Standard of Weights and Measures." The clause’s pairing with the power to coin money suggests that the standard must be intrinsic to the currency itself (i.e., tied to a measurable weight of gold or silver), not subject to the whims of a quasi-private entity.

Historical Context: The Framers drew from English common law, where the king’s authority to coin money was tied to fixed weights of precious metals to prevent debasement. The U.S. Constitution adopted this principle to protect citizens from arbitrary devaluation, a concern rooted in the colonial experience with paper money. The Fed’s fiat system, enabled by Congress’s delegation, directly contradicts this mandate.

Argument 7: Violation of the U.S. Coinage Act of 1792

Statutory Violation:

The Coinage Act of 1792, enacted by the First Congress, remains in force and defines the dollar in terms of gold and silver. Section 9 of the Act states: "The money of account of the United States shall be expressed in dollars or units… of the value [mass or weight] of a Spanish milled dollar as the same is now current, and to contain 371 grains and 4/16 parts of a grain of pure… silver." This established the dollar as a silver coin of a specific weight (371.25 grains of pure silver, equivalent to 1 troy ounce), with gold coins valued proportionally (e.g., a $10 gold eagle at 247.5 grains of pure gold).

Never Repealed: The Coinage Act of 1792 has not been repealed, though subsequent laws (e.g., the Gold Standard Act of 1900, the Federal Reserve Act of 1913) have modified the monetary system. The Act’s definition of the dollar as a specific weight of silver remains the statutory standard for U.S. currency. Federal Reserve Notes, which are not redeemable in gold or silver and lack intrinsic value, violate this statutory definition.

Federal Reserve’s Fiat Currency: By delegating its authority to the Fed to issue fiat currency, Congress has enabled a monetary system that conflicts with the Coinage Act of 1792. Federal Reserve Notes do not contain or represent 371.25 grains of silver (or its gold equivalent) and are not "coined" in the statutory sense. The Fed’s issuance of paper money, backed only by the "full faith and credit" of the U.S. government, directly contravenes the Act’s requirement that U.S. money be expressed in dollars tied to a specific weight of precious metal.

Legal Violation: Congress’s delegation to the Fed violates its own unrepealed statute, the Coinage Act of 1792, which defines the dollar in terms of silver. The Act reflects the constitutional intent behind Article I, Section 8, Clause 5, and Congress cannot delegate authority to the Fed to issue currency that deviates from this legal standard. The Fed’s fiat system, enabled by Congress, is thus ultra vires under both the Constitution and federal law.

Judicial Consideration: While the Supreme Court upheld fiat currency in the Legal Tender Cases (1871-1884), those decisions involved Treasury-issued notes during a national emergency (Civil War). The Fed’s ongoing issuance of fiat currency by a quasi-private entity, in peacetime, lacks such justification and conflicts with the Coinage Act’s enduring standard. A court applying a textualist approach might find that the Act’s definition of the dollar as silver coin remains binding, invalidating the Fed’s authority to issue fiat money.

Counterarguments and Rebuttal

Counterargument 1: Historical Acceptance and Legal Precedent:

The Fed’s defenders argue that its authority has been accepted for over a century, with cases like McCulloch v. Maryland (1819) supporting Congress’s power to create monetary institutions, and the Legal Tender Cases (1871-1884) upholding fiat currency.

Rebuttal: McCulloch upheld the Second Bank of the United States, which issued notes redeemable in gold or silver, aligning with the Coinage Act of 1792 and Article I, Section 8. The Legal Tender Cases were decided under wartime exigency and involved Congress directly issuing notes, not delegating to a quasi-private entity like the Fed. The Fed’s fiat system, post-1971, violates the unrepealed Coinage Act and the constitutional mandate to fix a stable standard, neither of which was directly addressed in those precedents.

Counterargument 2: Practical Necessity of Fiat Currency:

Proponents argue that a modern economy requires a flexible fiat currency system, which the Fed manages effectively, and that tying money to gold or silver is impractical.

Rebuttal: Practical necessity does not override constitutional mandates. Article I, Section 8, Clause 5, and the Coinage Act of 1792 define money as gold and silver, and the Framers prioritized stability over flexibility to protect against inflation and debasement. The Fed’s fiat system has led to a 96% devaluation of the dollar since 1913, undermining the constitutional requirement to fix a standard of weights and measures. Congress cannot delegate away its constitutional duty simply because a fiat system is more convenient for modern economics.

Conclusion

Congress’s delegation of its exclusive authority to coin money to the U.S. Federal Reserve violates multiple constitutional and statutory principles:

It exceeds Article I, Section 8, Clause 5 by authorizing fiat currency, not gold or silver coin.

It abdicates a core legislative function, violating the non-delegation doctrine under Schechter.

The Fed’s quasi-private structure undermines democratic accountability, violating due process.

The issuance of fiat currency circumvents Article I, Section 10’s gold and silver standard.

The Fed’s devaluation of the dollar through inflation constitutes an unconstitutional tax.

The Fed’s fiat system fails to "fix the Standard of Weights and Measures," as required by Article I, Section 8, Clause 5, by introducing volatility instead of a stable, measurable standard tied to gold or silver.

The Fed’s issuance of Federal Reserve Notes violates the unrepealed Coinage Act of 1792, which defines the dollar as 371.25 grains of pure silver, a statutory standard that Congress cannot delegate away.

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