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 govt passed legal tender laws and circulated U.S. notes greenbacks to maintain by itself through a time of crisis and want. Below the authority of regulation these notes had been nearly as good as gold as well as government grew to become an alchemist.
The Early Impact Because the authorities put to use these notes to pay its debts the provide of currency commenced flooding the marketplace and therefore the notes commenced to drop their worth. In July of 1864 the notes hit a low of 2.85 for an individual dollar in gold coin questioning the legitimacy on the legal tender legal guidelines.
The 1st Legal Tender Case Together arrived Mrs. Hepburn who borrowed a whopping 11250 in gold and silver coin from Mr. Griswold. When it arrived time to shell out up Mrs. Hepburn made available Mr. Free money from the government to buy a car Griswold greenbacks. Not being a fool Mr. Griswold rejected Mrs. Hepburns tender and demanded gold and silver coin.
A lawsuit was filed plus the two commenced battling it out in courts in which Mr. Griswold claimed the federal government had no constitutional authority to decree paper money legal tender and Mrs. Hepburn the opposite. The situation went many of the way approximately the Supreme Court where exactly a decision needed to be manufactured did Congress possess the strength to decree paper funds payment for all debts public and private
The Court hemmed and hawed analyzed it this way and analyzed it that way but at some point Chief Justice Chase held with all the the greater part of the Court and made the decision the solution was NO Congress didnt have the constitutional authority for this sort of a regulation. Mr. Griswold won and Mrs. Hepburn needed to spend in gold and silver coin. Was justice done
Revisiting Legal Tender Legal guidelines A calendar year later on another Supreme Court case was heard where by Mrs. Lee desired to become paid back again for the incorrect dedicated towards her by Mr. Knox who unlawfully took her sheep. The composition with the Court had changed as President Ulysses Grant had appointed two new justices for the day that Hepburn v. Griswold was made the decision. This time the answer was various. The Court ruled that Mr. Knox was entitled to fork out Mrs. Lee in greenbacks as undoubtedly the federal government had the facility to decree paper funds payment for all debts public and personal under the authority to carry on war.
Legal Tender during Peace Time For really some time there was peace and therefore the government had no war it desired to combat. So a query arose could Congress go on to compel collectors to take paper cash less than the authority to carry on war when none existed
Julliard offered bales of cotton to Greenman and wished to compensated in gold and silver coin. No reported Greenman I will pay out you in U.S. notes. Back to your Supreme Court went the legal tender legal guidelines but this time the issue was did the govt have the authority to decree paper revenue legal tender in instances of peace
On this event the situation hardly designed a splash and also the Court ruled eight to 1 that in the course of war or peace the federal govt had the authority to decree paper funds legal tender. Why Very well undoubtedly the authority to borrow coupled while using the authority to coin cash presented the authorities with this kind of a suitable.
So Now we now have Paper Forex From 1884 when Julliard v. Greenman was made the decision right up until currently the courts have ruled the national government has the authority to decree paper payment for all debts public and personal. The fact that todays paper money is issued through the Federal Reserve and never Congress is induce for your distinct dialogue. Free money from the government to buy a car
