Department of Economics
University of Delaware
Working Paper #2004-08
THE U.S. CONSTITUTION AND MONETARY POWERS: AN ANALYSIS OF THE 1787 CONSTITUTIONAL CONVENTION AND HOW A CONSTITUTIONAL TRANSFORMATION OF THE NATION’S MONETARY SYSTEM EMERGED
The monetary powers embedded in the U.S. Constitution were revolutionary and led to a watershed transformation in the nation’s monetary structure. They included determining what monies could be legal tender, who could emit fiat paper money, and who could incorporate banks. How the debate at the 1787 Constitutional Convention over these powers evolved and the path the founding fathers took that led to the specific powers adopted is presented and deconstructed. Why they took this path rather than replicate the colonial system and why they codified such powers into supreme law rather than leave them to legislative debate are addressed.