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 federal government print U.S. notes and decree them legal tender for all debts public and non-public.
The federal authorities passed legal tender laws and circulated U.S. notes greenbacks to maintain by itself for the period of a time of crisis and need. Underneath the authority of legislation these notes have been as good as gold plus the govt grew to become an alchemist.
The Early Influence Since the govt put to use these notes to fork out its debts the offer of forex commenced flooding the marketplace plus the notes started to drop their appeal. In July of 1864 the notes hit a reduced of 2.85 for 1 dollar in gold coin questioning the legitimacy of the legal tender laws. Free money from the federal government
The 1st Legal Tender Case Along arrived Mrs. Hepburn who borrowed a whopping 11250 in gold and silver coin from Mr. Griswold. When it arrived time to spend up Mrs. Hepburn provided Mr. Griswold greenbacks. Not remaining a fool Mr. Griswold rejected Mrs. Hepburns tender and demanded gold and silver coin.
A lawsuit was submitted as well as two started battling it out in courts where exactly Mr. Griswold claimed the federal government had no constitutional authority to decree paper cash legal tender and Mrs. Hepburn the opposite. The situation went all the way approximately the Supreme Court where by a decision had to be manufactured did Congress possess the electric power to decree paper dough payment for all debts public and private
The Court hemmed and hawed analyzed it using this method and analyzed it that way but eventually Chief Justice Chase held along with the the vast majority in the Court and determined the answer was NO Congress didnt have the constitutional authority for these kinds of a legislation. Mr. Griswold won and Mrs. Hepburn had to fork out in gold and silver coin. Was justice accomplished
Revisiting Legal Tender Laws A yr later on an additional Supreme Court circumstance was heard where by Mrs. Lee wished being compensated back again for a wrong committed from her by Mr. Knox who unlawfully took her sheep. The composition of the Court had improved as President Ulysses Grant had appointed two new justices within the day that Hepburn v. Griswold was resolved. This time the solution was numerous. The Court ruled that Mr. Knox was entitled to shell out Mrs. Lee in greenbacks as certainly the federal government had the facility to decree paper dough payment for all debts public and personal below the authority to hold on war.
Legal Tender during Peace Time For fairly a while there was peace along with the govt had no war it necessary to battle. So a problem arose could Congress carry on to compel collectors to take paper dough under 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 said Greenman Ill fork out you in U.S. notes. Again with the Supreme Court went the legal tender legal guidelines but this time the problem was did the federal government possess the authority to decree paper funds legal tender in times of peace
On this event the situation hardly built a splash in addition to the Court ruled eight to one that while in war or peace the federal govt had the authority to decree paper dollars legal tender. Why Properly surely the authority to borrow coupled when using the authority to coin dough presented the govt with these a best suited.
So Now now we have Paper Currency From 1884 when Julliard v. Greenman was resolved right until now the courts have ruled which the nationwide authorities has the authority to decree paper payment for all debts public and personal. The fact that present-day paper revenue is issued from the Federal Reserve instead of Congress is result in for just a unique discussion. Free money from the federal government
