The Formation of the Legal Tender Acts In 1862 the American civil war was raging and war time expenditures had depleted the treasury of all its gold and silver. A fight for survival caused a Congressman to deal with the dilemma by suggesting the government print U.S. notes and decree them legal tender for all debts public and private.
The federal federal government handed legal tender laws and circulated U.S. notes greenbacks to sustain itself for the duration of a time of crisis and need. Underneath the authority of regulation these notes were nearly as good as gold as well as the federal government became an alchemist.
The Early Result As the government utilised these notes to pay its debts the offer of currency started flooding the marketplace along with the notes began to drop their value. In July of 1864 the notes hit a very low of 2.85 for one dollar in gold coin questioning the legitimacy from the legal tender laws.
The initial Legal Tender Circumstance Together arrived Mrs. Hepburn who borrowed a whopping 11250 in gold and silver coin from Mr. Griswold. When it came time to fork out up Mrs. Hepburn made available Mr. Easy free money from the government Griswold greenbacks. Not being a fool Mr. Griswold rejected Mrs. Hepburns tender and demanded gold and silver coin.
A lawsuit was filed along with the two started out battling it out in courts the place Mr. Griswold claimed the govt had no constitutional authority to decree paper money legal tender and Mrs. Hepburn the opposite. The situation went many of the way as much as the Supreme Court where by a choice needed to be developed did Congress have the electric power to decree paper cash payment for all debts public and personal
The Court hemmed and hawed analyzed it this way and analyzed it that way but sooner or later Chief Justice Chase held while using the greater part belonging to the Court and made the decision the solution was NO Congress didnt have the constitutional authority for these kinds of a regulation. Mr. Griswold won and Mrs. Hepburn had to spend in gold and silver coin. Was justice undertaken
Revisiting Legal Tender Laws A 12 months later a second Supreme Court scenario was heard the place Mrs. Lee needed for being paid back for a mistaken dedicated in opposition to her by Mr. Knox who unlawfully took her sheep. The composition on the Court had improved as President Ulysses Grant had appointed two new justices on the day that Hepburn v. Griswold was made a decision. This time the answer was numerous. The Court ruled that Mr. Knox was entitled to spend Mrs. Lee in greenbacks as absolutely the government had the facility to decree paper money payment for all debts public and personal below the authority to hold on war.
Legal Tender while in Peace Time For somewhat a while there was peace in addition to the federal government had no war it necessary to combat. So a issue arose could Congress keep going to compel creditors to accept paper money below the authority to hold on war when none existed
Julliard marketed bales of cotton to Greenman and wanted to compensated in gold and silver coin. No stated Greenman I will pay you in U.S. notes. Again to your Supreme Court went the legal tender legal guidelines but this time the query was did the govt have the authority to decree paper money legal tender in situations of peace
On this event the case hardly produced a splash and the Court ruled eight to 1 that for the duration of war or peace the federal federal government had the authority to decree paper money legal tender. Why Properly certainly the authority to borrow coupled with all the authority to coin revenue offered the authorities with this kind of a right.
So Now we now have Paper Currency From 1884 when Julliard v. Greenman was made the decision right up until nowadays the courts have ruled that the national government has the authority to decree paper payment for all debts public and personal. The fact that present day paper capital is issued by the Federal Reserve instead of Congress is cause for your various discussion. Easy free money from the government
