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Legal Tender and Treason

28 Jul

The single most important section of the Constitution of the United States may be Article 1 Section 10 Clause 1 which declares in part, “No State shall . . . make any Thing but gold and silver Coin a Tender in Payment of Debts.” The modern significance of this clause flows from the fact that in A.D. 1933 the federales removed gold from domestic circulation, and then stopped coining silver coins in A.D. 1964, stopped redeeming Silver Certificates with silver dollars in A.D. 1968, and in A.D. 1971 stopped redeeming paper dollars held by foreign countries for gold. As a practical matter, our dollars lost all domestic gold or silver backing by A.D. 1968. Once that happened, the States of the Union may have been rendered insolvent, inoperable and virtually destroyed.

Why? Because under Article 1.10.1, the States of the Union can’t make or receive payments except by means of a “Tender” of “gold and silver coins”. Once the federal government removed the gold and silver coins from domestic circulation, the States of the Union could no longer function. I believe that to supplant the missing States of the Union, the feds created a series of fictional and/or territorial “states” (like TX, CA and NY) which were, in the end, under the complete control of Congress.

Article 3 Section 3 Clause 1 of the Constitution of the United States declares in part that, “Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort.” Note that the underlined words “them” and “their” are plural and refer to the term “United States”. That tells us that, under the U.S. Constitution, treason can only committed against the several States of the Union.

So, if it’s true that by removing the gold and silver coin from circulation, the federal government destroyed the States of the Union, then removing those coins would constitute an act of war against those de jure States and an act of Treason on the part of the federal government.

That’s why Article 1 Section 10 Clause 1 may be the Constitution’s single most important Clause. Depending on the meaning of that Clause, we might know if our entire federal government is engaged in massive and systemic treason against the several “United States”.

In A.D. 1981, two “Michigan” State Representatives asked their Attorney General for an opinion on the question of whether “Michigan” was or was not compelled by Article 1 Section 10 Clause 1 to use only gold and silver coin as a Tender in Payment of Debts”. I suspect the two politicians asking for the AG’s Opinion might’ve been wondering if they were involved in massive act of treason.

The AG’s response is regarded by some as one of the best explanations of the “legal tender” issue. I agree; read closely the AG’s Opinion is certainly revealing.

My [blue bracketed] comments are inserted into the version of the Attorney General’s document that immediately follows; a pristine copy of the Attorney General’s Opinion is presented at the end of this document.

*******************************************************

The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site – http://www.ag.state.mi.us)


STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL


Opinion No. 5934

July 15, 1981

CONSTITUTIONAL LAW:

Payment of debts by tender of gold or silver coin

LEGAL TENDER:

Payment of debts in gold and silver coin

US Const, art I, Sec. 10 does not require the State of Michigan to pay its debts or receive the payment for debts exclusively in either gold or silver coin.

The State may not require the payment of private debts exclusively in either gold or silver coin.

Honorable Mat Dunaskiss

State Representative

The Capitol

Lansing, Michigan

Honorable Jack Welborn

State Senator

The Capitol

Lansing, Michigan

You have requested my opinion whether US Const, art I, Sec. 10, requires the State of Michigan to pay its debts or receive payment for debts exclusively in either gold or silver coin.

US Const, art I, Sec. 10, in pertinent part, provides:

‘No State shall . . . make any Thing but gold and silver Coin a Tender in Payment of Debts . . ..’

It has long been established that the federal government, pursuant to the broad powers delegated to Congress by US Const, art I, Sec. 8, possesses the exclusive power to declare what shall be legal tender for the payment of all debts. Legal tender cases: Knox v Lee and Parker v Davis, 79 US 457; 20 L Ed 287 (1871). Julliard v Greenman, 110 US 421; 4 S Ct 122; 28 L Ed 204 (1884); Norman v Baltimore & Ohio RR Co, 294 US 240; 55 S Ct 407; 79 L Ed 885 (1935); Guarantee Trust Co v Henwood, 307 US 247; 59 S Ct 847; 83 L Ed 1226 (1939). The reason for vesting Congress with this power was stated succinctly by the United States Supreme Court in Knox v Lee [A.D. 1871], supra:

[The] Constitution was intended to frame a government as distinguished from a league or compact, a government supreme in some particulars over States and people. [That’s a G.D. lie whereby the Courts move us (presumably, under the 14th) from a federal to “a” national government.] It was designed to provide the same currency [I doubt that “currency” and “money” or even “tender” are synonymous. The court may be ruling for a territory rather than a State of the Union.], having a uniform legal value in all the States [of the Union]. It was for this reason the power to coin money and regulate its value [“regulate” does not mean deny; today, dollar has “no assured value” by P.L. 95-147, Oct. 28th, A.D. 1977] was conferred upon the Federal [not national?] government, while the same power as well as the power to emit bills of credit was withdrawn from the States [of the Union]. The States can no longer declare what shall be money [or currency?], or regulate its value. Whatever power there is over the currency is vested in Congress. . . .’ 79 US 457, 545

Further explanation was later provided by the Court in Julliard v Greenman [A.D. 1884], supra, as follows:

‘By the Constitution of the United States, the several States are prohibited from coining money, emitting bills of credit, or making anything but gold and silver coin a tender in payment of debts. But no intention can be inferred from this to deny to Congress either of these powers. Most of the powers granted to Congress are described in the eighth section of the first article; the limitations intended to be set to its powers, so as to exclude certain things which might otherwise be taken to be included in the general grant, are defined in the ninth section; the tenth section is addressed to the States only.’ 110 US 421, 446

The Court went on to hold, inter alia:

‘The power of issuing bills of credit, and making them, at the discretion of the legislature, a tender in payment of private debts, had long been exercised in this country by the several Colonies and States [prior to the Constitution. This “exercise” might’ve been under common law. The fact that the “colonies” may have done something has little relevance to what the subsequent States (under the DOI) or the federales can do after the Constitution is adopted.]; and during the Revolutionary War the States, upon the recommendation of the Congress of the Confederation, had made the bills issued by Congress a legal tender. See Craig v. Missouri, 4 Pet. 435, 453; Briscoe v. Bank of Kentucky, 11 Pet. 257, 313, 334-336; Legal Tender Cases, 12 Wall. 557, 558, 622; Phillips on American Paper Currency, passim. The exercise of this power not being prohibited to Congress by the Constitution, it is included in the power expressly granted to borrow money on the credit of the United States. [The State constitutions are essentially constitutions of unlimited powers. I.e., all powers not expressly prohibited to the States are presumed to exist within the States of the Union. However, the U.S. Constitution is expressly a constitution of LIMITED powers that are expressly granted. The court’s contention that “The exercise of this power not being prohibited to Congress by the Constitution” is false or misleading. The powers granted to the U.S. government (all three branches acting in concert) by the Constitution are limited. But the powers granted to Congress by the Constitution over the territories are essentially unlimited because Congress has “exclusive legislative jurisdiction” over (at least) Washington D.C. and almost certainly all of the territories. If so, this means that the majority of “federal agencies” are not agencies of the U.S. government, but rather agencies of the U.S. Congress empowered to act solely in the territories over which the U.S. Congress has exclusive or perhaps concurrent jurisdiction. . . . In any case, Congressional power to control the currency in the territories does not mean that the Congress can eliminate the gold and silver coin which are constitutionally-mandated for the States of the Union. By eliminating the gold & silver coin, Congress committed treason by making war upon and incapacitating the States of the Union.]

‘This position is fortified by the fact that Congress is vested with the exclusive exercise of the analogous power of coining money and regulating the value of domestic and foreign coin, and also with the paramount power of regulating foreign and interstate commerce. [I suspect that the words “domestic” and “interstate” refer to territories rather than States of the Union. I.e., “domestic” is quite possibly “domestic to the territories” and/or to “Washington D.C.” or perhaps even “domestic to Congress”—not not “domestic to the several States”. . . . Similarly, under the U.S. Constitution at Artcle 1.8.3, “The Congress shall have Power . . . To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;”. We have come to suppose that the term “interstate commerce” is synonymous with “Commerce among the several States”. I suspect that supposition is false. I suspect that “interstate commerce” signifies commerce between the territorial “states” rather than “Commerce among the several States”. If so, the “paramount power of regulating . . . interstate commerce” may apply only in territorial “states” like TX, CA, and NY—but not within The State of Texas, The State of California or The State of New York.] Under the power to borrow money on the credit of the United States [which? Federal or national?], and to issue circulating notes for the money borrowed, its power to define the quality and force of those notes as currency is as broad as the like power over a metallic currency under the power to coin money and to regulate the value thereof. Under the two powers, taken together, Congress is authorized to establish a national currency, either in coin or in paper, and to make that currency lawful money for all purposes, as regards the national government or private individuals.’ 110 US 421, 447-448

[It’s debatable whether the “two powers” can be “taken together” insofar as the power to coin money directly implicates the very existence of the “several States” while the power to issue bills of credit primarily implicates the federal government.

But it seems absolutely true that the Congress can issue a “national currency” as regards “national government” that is composed of either coin or paper. That “national” government would be Congress and would apply to whatever single “nation” existed under the territories and/or under the 14th Amendment’s “citizens of the United States”. However, that “national government” and “national currency” would have no constitutional application within the boundaries of a State of the Union.

But what, exactly, does the court mean by “private individuals”? Citizens of the United States? Persons who are not “citizens of a State of the Union”? I’d bet that “private individuals” may be those who are not officers or even employees of a State of the Union. (To be an officer of a State of the Union (and maybe even the U.S. government) is to be a “public officer”?) Whatever “private individuals” are, they cannot be acting in concert with, or perhaps even within, a State of the Union since they can use the “national currency,” but not “gold and silver coin as tender in payment of debt”.

The term “private individuals” faintly implicates the “rights of privacy”.]

In exercising its power to establish and regulate a national currency, Congress has, pursuant to 48 Stat 113 (1933); 31 USC 463, expressly forbidden the making of obligations payable in gold or any particular kind of coin or currency except that which it has declared legal tender at the time of payment: [What if the “time” were “A.D.” rather than “C.E.”? Does the “national currency” (legal tender) only function in “C.E.”? Can there be a “payment” in legal tender, or only a “discharge”?]

‘(a) Every provision contained in or made with respect to any obligation which purports to give the obligee a right to require payment in gold or a particular kind of coin or currency, or in an amount in money of the United States measured thereby, is declared to be against public policy [Clearly, this “public policy” does not include the U.S. Constitution which mandates gold & silver. Thus, “public policy” must be non-constitutional, private, probably “territorial,” and almost certainly “national” rather than “federal”. Where “public policy” applies, legal tender is lawful or even mandated. Does it follow that wherever legal tender is being used must be subject to “public policy”? The relationship of “public policy” to “legal tender” is at least strong, and perhaps that of synonymous definitions.]; and no such provisions shall be contained in or made with respect to any obligation hereafter incurred. Every obligation, heretofore or hereafter incurred, whether or not any such provision is contained therein or made with respect thereto, shall be discharged upon payment, dollar [legal tender with no assured value] for dollar [constitutional with fixed weight of gold or silver], in any coin or currency which at the time [A.D. or C.E.?] of payment is legal tender for public and private debts. [Public and private debts WHERE? US or USA? “The State” of “this state”? I’ll bet that the “private debts” are the debts of “this state” and/or territorial/fiction “state” since they aren’t act of the de jure government of The State. “This state” is acting in a proprietary and/or private capacity. The “public debts” would probably be the debts incurred by the de jure government of The State or perhaps the debts of the federal “United States”. But the “private debts” would probably be the debts of the non-constitutional and therefore “private” entities referred to as “this state”. I’ll bet that the privatized nature of “this state” is a condition precedent for transacting in legal tender.] Any such provision contained in any law authorizing obligations to be issued by or under authority of the United States, is hereby repealed, but the repeal of any such provision shall not invalidate any other provision or authority contained in such law. [The “repeal” might not “invalidate” any other “provision” or “authority,” but that doesn’t mean that the other provisions and authorities could not be “invalidated” by some other declaration, law, act, omission, etc..]

‘(b) As used in this section, the term ‘obligation’ means an obligation [You can’t define a word with the word. Thus, the term “obligation” is not, so far, defined. What is an “obligation”?] (including every obligation of and to the United States, excepting currency) payable in money of the United States; and the term ‘coin or currency means coin or currency of the United States, including Federal Reserve notes and circulating notes of Federal Reserve banks and national banking associations.’

[The terms “currency of the United States” and “money of the United States” do not appear to be synonymous. Are they mutually exclusive?

It appears that all the “currency of the United States” is issued by the Federal Reserve, or Federal Reserve banks, or “national banking associations”. This “currency” does not appear to include gold or silver coin. Given that the Federal Reserve, Federal Reserve banks and “national banking associations” appear to be private in nature, then all of the “currency of the United States” may be privately issued. Whether the “currency of the United States” is truly private is unclear. I know the Federal Reserve ultimately issues all of our “dollars,” but who/what actually prints the paper—the Federal Reserve or the Department of Treasury? If the “currency” was printed by a true agency of the U.S. government (not an agency of Congress or a private entity), but then issued by the Federal Reserve, would the currency be public or private or some confusion of both?

What “currency of the United States” has or perhaps still is being issued by the “Federal Reserve banks”? And what th’ hell are “national banking associations”? What “currency of the United States” has been or currently is being issued by such entities? And what “United States” is being referenced by the term “currency of the United States” if that currency is issued by some private entity rather than by the Government of the United States?

There are apparently three different entities that can issue “currency of the United States”—but not one of them is part of the de jure United States government. Thus, all three sources appear to be private rather than “public” (depending on how “public” is defined). If so, it follows that all of our “currency”—even though named “currency of the United States”—should be private. If so, then any transaction based on this “privately-issued currency” would probably depend on private (rather than public) law. Thus, use of a privately-issued currency might preclude any application of true “public law”—including the State and federal constitutions.

It’s a stretch, but it might even follow that the use of privately-issued currency would implicate the United States Code rather than the Public Law from which the U.S.C. is derived. Is that possible? Could the Public Law apply to constitutional money while any use of legal tender might implicate the use of the U.S.C.? Is that possible? If I rely on the U.S.C. for my “authority” do I necessarily implicate “currency of the United States” and/or “private law”? If I want to act under the authority of the de jure Government must I avoid the U.S.C. and rely strictly on Public Law, the Constitution, and specie??]

The constitutionality of 31 USC 463, supra, was upheld in Norman v Baltimore & Ohio RR Co, [A.D. 1935] supra.

Presently, legal tender for the payment of all debts, including taxes, is declared in 79 Stat 255 (1965), 31 USC 392, to be:

[Are taxes a public or private debt? This could be a very big question. Suppose the IRS sent you a notice that you owed $20,000 in back income taxes. How would the IRS answer if you responded to their notice with a question as to the nature of the tax? I don’t believe that the IRS could admit the taxes were a “private debt” (assuming that was the truth). But I have a hunch that they probably wouldn’t lie about the tax being a “public debt”—at least not if pushed hard and persistently. And I have another hunch that describing taxes as a “public debt” (even if true) might not be so easy.

I have no evidence, but I suspect that there may be different kinds of “public debt”—not all of which are due to the Government of the United States. I have a hunch that some varieties of “public debt” might be owed to “governmental” (independent) agencies rather than agencies that are truly part of the de jure federal government.

More, even “public debts” owed to administrative agencies might be open to challenge. Why? Because administrative agencies are defined (AmJur, TexJur articles on Administrative Law or Agencies) as empowered to exercise all three of the fundamental powers of government (legislative, executive and judicial) under one roof. That means all of the administrative agencies operate without the constitutional mandate for “separation of powers”. Therefore, any “taxes” due to an administrative agency could not be “public”—at least not in the sense of being “constitutional”.

There is an additional question that’s at least interesting: What is my personal liability to pay income taxes to support an independent administrative agency? Yes, such independent administrative agencies are presumably performing a service on behalf of government which, presumably, is acting on behalf of the American people. Therefore, it’s reasonable that government should tax the taxpayers to pay for that service provided by some private entity. Still, why should I pay whatever proportion of my taxes are intended to go to private corporations functioning as independent administrative agencies? There might be some wiggleroom in that kind of question.

But, while it may be very difficult to argue that I shouldn’t have to pay income taxes to the federal government (even if those taxes are “privatized” by means of use of legal tender)—questions concerning the validity of taxes demanded in the form of legal tender to our would-be “states” (which are purely privatized and masquerading as if they were States of the Union) are a lot more reasonable.

If “this state” is a “privatized” entity acting in a proprietary capacity with private legal tender, what is my obligation to pay taxes to this private entity? Is the “state” sales tax due to a “public” or “private” debt? How ‘bout that “state” income tax? What is the authority of a privatized state imposing “taxes” denominated in private legal tender to impose taxes on anyone? Is it possible that all of the “taxes” of “this state” are a “private debt” and therefore consensual?

Inquiring minds wanna know.]

Presently, legal tender for the payment of all debts, including taxes, is declared in 79 Stat 255 (1965), 31 USC 392, to be:

‘All coins and currencies of the United States (including Federal Reserve Notes and circulating notes of Federal Reserve banks and national banking associations), regardless of when coined or issued, shall be legal tender for all debts, public and private, public charges, taxes, duties, and dues.’

[So, legal tender does not merely apply to “all debts, public and private” (as is declared on our FRNs), it also applies to “public charges,” “taxes,” “duties,” and “dues”. But what’s the difference between a “debt, public [or] private” and a “public charge,” or a “tax,” “duty” or “dues”?

And note that, judging from the 31 USC 392 of A.D. 1965, a “tax” is something other than a “debt, public or private”. That’s interesting. If FRNs are “legal tender for all debts, public and private,” and “taxes” are not a “debt, public [or] private,” are FRNs truly appropriate for paying taxes?]

In recent years the federal courts have, in numerous instances, reaffirmed Congress’ constitutional power to declare what is legal tender for payment of all debts, both public and private. United States v Tissi, 601 F2d 372, 374 (CA 8, 1979); United States v Rifen, 577 F2d 1111, 1112 (CA 8, 1978); United States v Daly, 481 F2d 28, 30 (CA 8, 1973), cert den, 414 US 1064; 94 S Ct 571; 38 L Ed 2d 469 (1973); United States v Whitesel, 543 F2d 1176, 1180-1181 (CA 6, 1976), cert den, 431 US 967; 97 S Ct 2924; 53 L Ed 2d 1062 (1977); United States v Schmitz, 542 F2d 782, 785 (CA 9, 1976), cert den, 429 US 1105; 97 S Ct 1134; 51 L Ed 2d 556 (1977).

[Declared where? I.e., Congress can’t declare that FRNs are “legal tender” in France or China or the world at large. So where has Congress declared FRNs to be legal tender? Article 1.10.1 of the Constitution of the United States declares that No State shall make any Thing but gold and silver coin a Tender in Payment of Debt.” It seems to me that even the federales can’t “declare what is legal tender” within the States of the Union. It seems to me that the Congress may be constitutionally empowered to declare what is “legal tender” only in those jurisdictions subject to exclusive congressional control. Thus, it seem likely that Congress may have only declared what is legal tender for Washington D.C. and the territories.

If so, then if you’re acting within a State of the Union, you might be able to use gold and silver coin as a “tender” (not “legal tender”) in payment of debts.

Conversely, insofar as you use “legal tender,” that mere use may create the presumption that you have voluntarily assented to transact your affairs in a “territorial state” (like TX, CA or NY) where you are subject to the exclusive jurisdiction of the Congress.]

While the question has never been considered by Michigan appellate courts in reported cases, the exclusivity of Congress’ power has been consistently recognized by the State courts which have had occasion to consider the matter: e.g., Chermack v Bjornson, 302 Minn 213; 223 NW2d 659, 660-661 (1974), cert den, 421 US 915; 95 S Ct 1573; 43 L Ed 2d 780 (1975), where the Minnesota Supreme Court ruled that the state [territorial?] was not required to tender income tax refunds in gold and silver coin; Radue v Zanaty, 293 Ala 585; 308 So 2d 242, 244 (1975), where the Alabama Supreme Court held that it was impermissible for a taxpayer to tender payment of income taxes by checks redeemable only in gold or silver coin; Leitch v State Department of Revenue, 16 Ore App 627; 519 P2d 1045, 1046 (1974), in which the Oregon Court of Appeals described as ‘frivolous’ the taxpayer’s contention that transportation taxes could only be collected by the state in gold and silver [The court was probably right—at least with regard to a territorial “state”. If the plaintiff engaged in transportation “in OR,” legal tender would be permissible and gold and silver coin would not be required or even applicable. On the other hand, if the plaintiff engaged in transportation “within the boundaries of The State of Oregon,” the plaintiff might’ve had a case. But if he were transporting within The State, why did the plaintiff bring his case to a court of “this state” (OR or STATE OF OREGON)?]; Allen v Craig, 1 Kan App 2d 301; 564 P2d 552, 556-557 (1977), in which the Kansas Court of Appeals rejected a taxpayer’s attempt to pay $4,000 in personal and real property taxes with a check which called for payment in 800 silver dollars, allegedly worth 5 times as much as federal reserve notes [“This state” refused payment in silver. It’s not impossible that “this state” can’t take payment in the value of silver or gold without doing business “within The State”. “This state” may be able to take gold or silver coins at face value ($1, $20, $50) as a legal tender, but it could probably not accept “gold or silver coin as a tender in payment of debt” based on the market value of the gold or silver intrinsic to each coin. In other words, if you owed a $500 fine in legal tender and you wanted to pay in gold and silver coin, “this state” would want and accept 500 silver one dollar coins—which today would be worth about $10,000 in legal tender. Point: it’s not certain, but it may be that “this state” is prohibited from doing business in “tender” (gold and silver coin based on the intrinsic and/or market value of the coins), but might be absolutely compelled to do business only in “legal tender” of “no assured value”.] ; Trohimovich v Director of Department of Labor, 21 Wash App 243; 584 P2d 467, 470 (1978), where the Washington Court of Appeals denied an attempt by the owners of a business to make payment of state industrial insurance premiums with checks reflecting the owners’ conversion of the total dollars due into gold based on final daily price-fixings of gold on the London Market; and Middlebrook v Mississippi Tax Commission, 387 So 2d 726, 728 (Miss, 1980) where the Mississippi Supreme Court held that federal reserve notes are taxable dollars for the purposes of paying state income tax assessments. [If there’s such a thing as a “taxable dollar,” it follows that there must also be a “non-taxable dollar”. It’s at least likely that the income tax is based on the privilege of using intrinsically worthless pieces of paper (FRNs) to “discharge” rather than “pay” our debts. (Use of legal tender is truly a privilege. I can walk into a good restaurant, order a delicious steak with all the trimmings, and pay for it with an intrinsically worthless piece of paper. Thanks to legal tender, I am truly “getting something for nothing”. In fact, by using legal tender (FRNs), I am essentially robbing the restaurant. But no one seems to mind, because I am also being robbed every time someone pays me with worthless legal tender for my work, services or credit. Thanks to legal tender, we have become a nation of thieves—dedicated to discharging rather than paying our debts and not minding that we are being robbed, so long as we can rob others.) If worthless FRNs (legal tender) are the “taxable dollars” used to discharge our debts, I’d bet that gold and silver coins may constitute the “non-taxable dollars”. If so, then it might follow that insofar as I conducted my business affairs in gold and silver coin (non-taxable dollars), I might not be subject to paying income taxes on the “privilege” of using legal tender in one of the territorial “states”.]

It is my opinion, therefore, that US Const, art I, Sec. 10 does not require the State of Michigan to pay its debts or receive payment for debts exclusively in either gold or silver coin. It is further my opinion that the State may not require the payment of private debts exclusively in either gold or silver coin since Congress alone possesses and exercises this authority.

[First, as most people know, “opinions are like a-holes—everybody’s got one”. In this case, the Michigan Attorney General had two. That’s normally unusual, but some believe that having multiple a-holes may be a condition prerequisite for entering the Bar.

It’s easy to make fun of the AG, but his two concluding “opinions” seemingly refute all of my previous speculation. For example, while I am jabbering on and on about “territorial states” and “this state,” etc., the AG expressly refers to “the State of Michigan” and “the State”. Unless the man is flat-out lying (which is unlikely but not impossible) or simply mistaken, he’s written the truth in his conclusions. If he’s right, it would appear that I’m wrong.

But the essence of law is language. You don’t get out of law school without having some mastery of language. You don’t normally grow up to be a “state” Attorney General without achieving a very high level of verbal felicity. Once you’ve achieved that verbal expertise, it’s really so hard to say some things without actually saying them—or seem to say other things but in fact say something entirely different.

I so, did AG Kelly really mean what he wrote—“. . . art I, Sec. 10 does not require the State of Michigan to pay its debts or receive payment for debts exclusively in either gold or silver coin”—and what do those words really mean? As master word-wrangler William Jefferson Clinton once said, “It all depends on what the meaning of ‘is’ is.” Except in this case, it all depends on what the meanings of “exclusively,” “either” and “or” mean.

First, consider Article 1 Section 10 Clause 1 of the Constitution of the United States which declares in pertinent part, “No State shall . . . make any Thing but gold and silver Coin a Tender in Payment of Debts.” Note use of the word “and”. That clause declares that the States of the Union are prohibited from passing (making) any laws, rules or regulations that declare any substances other than gold and silver coins to be a Tender. In other words, under Article 1.10.1, the States can use both gold and silver coins as a “Tender in Payment of Debts”.

Now consider the AG’s language: “. . . art I, Sec. 10 does not require the State of Michigan to pay its debts or receive payment for debts exclusively in either gold or silver coin”. See the difference? The AG’s language suggests that according to 1.10.1, the States of the Union cannot pass laws etc. that that would restrict the kind of payment to either 1) “exclusively” gold (but no silver) or 2) “exclusively” silver (but no gold).

The AG’s statement is technically true. Article 1.10.1 does not require the States of the Union to accept payment in either 1) gold (exclusively); or 2) silver (exclusively). Article 1.10.1 declares that the States of the Union can’t declare anything besides gold coins and silver coins to be a “Tender in Payment of Debts,” but the States of the Union can use both gold and silver coins as a Tender—they do not have to choose to exclusively use gold or exclusively use silver.

All of this linguistic fencing may seem absurd to most people, but these are kind of games lawyers play. If you haven’t dotted an “i” or crossed a “t” or properly deduced what “the meaning of ‘is’ is,” you can lose and lose big. You can lose a home, a job, a fortune or your liberty. A properly dumbed-down people can even lose 50 States of the Union for failure to understand grammar and the meanings of words.

Words are not just a means of communication. Words can be weapons of the most sophisticated kind of war—the war for the people’s recognition of authority and consent to voluntarily submit to that authority. Remember what Sun Tzu said? Something to the effect that the highest form of warfare resulted in victory without actually engaging in physical violence. How could such non-violent war be fought without words? What would be the object of such war? To compel the adversary to submit to the will of the conqueror. To persuade the adversary to recognize the “authority” of the conqueror and to voluntarily “consent” to that authority.

Were the STATE OF MICHIGAN’s Attorney General’s conclusions concerning gold and silver coin merely the result of a poor choice of words—or did he carefully choose his words so as to seemingly say one thing while actually meaning something entirely different? You tell me.

But as written, the AG’s opinion is at best ambiguous. The AG has not definitively answered the question as to the obligations of The State under Article 1 Section 10 Clause 1 of The Constitution of the United States.

Does that prove that my interpretations and suspicions are right? Nope. But it doesn’t prove them wrong, either. Thus, my notions still appear to at least be possible.]

Frank J. Kelley

Attorney General

************************************************************************

A pristine copy of the AG’s text appears below:

STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL


Opinion No. 5934

July 15, 1981

CONSTITUTIONAL LAW:

Payment of debts by tender of gold or silver coin

LEGAL TENDER:

Payment of debts in gold and silver coin

US Const, art I, Sec. 10 does not require the State of Michigan to pay its debts or receive the payment for debts exclusively in either gold or silver coin.

The State may not require the payment of private debts exclusively in either gold or silver coin.

Honorable Mat Dunaskiss

State Representative

The Capitol

Lansing, Michigan

Honorable Jack Welborn

State Senator

The Capitol

Lansing, Michigan

You have requested my opinion whether US Const, art I, Sec. 10, requires the State of Michigan to pay its debts or receive payment for debts exclusively in either gold or silver coin.

US Const, art I, Sec. 10, in pertinent part, provides:

‘No State shall . . . make any Thing but gold and silver Coin a Tender in Payment of Debts . . ..’

It has long been established that the federal government, pursuant to the broad powers delegated to Congress by US Const, art I, Sec. 8, possesses the exclusive power to declare what shall be legal tender for the payment of all debts. Legal tender cases: Knox v Lee and Parker v Davis, 79 US 457; 20 L Ed 287 (1871). Julliard v Greenman, 110 US 421; 4 S Ct 122; 28 L Ed 204 (1884); Norman v Baltimore & Ohio RR Co, 294 US 240; 55 S Ct 407; 79 L Ed 885 (1935); Guarantee Trust Co v Henwood, 307 US 247; 59 S Ct 847; 83 L Ed 1226 (1939). The reason for vesting Congress with this power was stated succinctly by the United States Supreme Court in Knox v Lee, supra:

‘[The] Constitution was intended to frame a government as distinguished from a league or compact, a government supreme in some particulars over States and people. It was designed to provide the same currency, having a uniform legal value in all the States. It was for this reason the power to coin money and regulate its value was conferred upon the Federal government, while the same power as well as the power to emit bills of credit was withdrawn from the States. The States can no longer declare what shall be money, or regulate its value. Whatever power there is over the currency is vested in Congress. . . .’ 79 US 457, 545

Further explanation was later provided by the Court in Julliard v Greenman, supra, as follows:

‘By the Constitution of the United States, the several States are prohibited from coining money, emitting bills of credit, or making anything but gold and silver coin a tender in payment of debts. But no intention can be inferred from this to deny to Congress either of these powers. Most of the powers granted to Congress are described in the eighth section of the first article; the limitations intended to be set to its powers, so as to exclude certain things which might otherwise be taken to be included in the general grant, are defined in the ninth section; the tenth section is addressed to the States only.’ 110 US 421, 446

The Court went on to hold, inter alia:

‘The power of issuing bills of credit, and making them, at the discretion of the legislature, a tender in payment of private debts, had long been exercised in this country by the several Colonies and States; and during the Revolutionary War the States, upon the recommendation of the Congress of the Confederation, had made the bills issued by Congress a legal tender. See Craig v. Missouri, 4 Pet. 435, 453; Briscoe v. Bank of Kentucky, 11 Pet. 257, 313, 334-336; Legal Tender Cases, 12 Wall. 557, 558, 622; Phillips on American Paper Currency, passim. The exercise of this power not being prohibited to Congress by the Constitution, it is included in the power expressly granted to borrow money on the credit of the United States.

‘This position is fortified by the fact that Congress is vested with the exclusive exercise of the analogous power of coining money and regulating the value of domestic and foreign coin, and also with the paramount power of regulating foreign and interstate commerce. Under the power to borrow money on the credit of the United States, and to issue circulating notes for the money borrowed, its power to define the quality and force of those notes as currency is as broad as the like power over a metallic currency under the power to coin money and to regulate the value thereof. Under the two powers, taken together, Congress is authorized to establish a national currency, either in coin or in paper, and to make that currency lawful money for all purposes, as regards the national government or private individuals.’ 110 US 421, 447-448

In exercising its power to establish and regulate a national currency, Congress has, pursuant to 48 Stat 113 (1933); 31 USC 463, expressly forbidden the making of obligations payable in gold or any particular kind of coin or currency except that which it has declared legal tender at the time of payment:

‘(a) Every provision contained in or made with respect to any obligation which purports to give the obligee a right to require payment in gold or a particular kind of coin or currency, or in an amount in money of the United States measured thereby, is declared to be against public policy; and no such provisions shall be contained in or made with respect to any obligation hereafter incurred. Every obligation, heretofore or hereafter incurred, whether or not any such provision is contained therein or made with respect thereto, shall be discharged upon payment, dollar for dollar, in any coin or currency which at the time of payment is legal tender for public and private debts. Any such provision contained in any law authorizing obligations to be issued by or under authority of the United States, is hereby repealed, but the repeal of any such provision shall not invalidate any other provision or authority contained in such law.

‘(b) As used in this section, the term ‘obligation’ means an obligation (including every obligation of and to the United States, excepting currency) payable in money of the United States; and the term ‘coin or currency’ means coin or currency of the United States, including Federal Reserve notes and circulating notes of Federal Reserve banks and national banking associations.’

The constitutionality of 31 USC 463, supra, was upheld in Norman v Baltimore & Ohio RR Co, supra.

Presently, legal tender for the payment of all debts, including taxes, is declared in 79 Stat 255 (1965); 31 USC 392 to be:

‘All coins and currencies of the United States (including Federal Reserve Notes and circulating notes of Federal Reserve banks and national banking associations), regardless of when coined or issued, shall be legal tender for all debts, public and private, public charges, taxes, duties, and dues.’

In recent years the federal courts have, in numerous instances, reaffirmed Congress’ constitutional power to declare what is legal tender for payment of all debts, both public and private. United States v Tissi, 601 F2d 372, 374 (CA 8, 1979); United States v Rifen, 577 F2d 1111, 1112 (CA 8, 1978); United States v Daly, 481 F2d 28, 30 (CA 8, 1973), cert den, 414 US 1064; 94 S Ct 571; 38 L Ed 2d 469 (1973); United States v Whitesel, 543 F2d 1176, 1180-1181 (CA 6, 1976), cert den, 431 US 967; 97 S Ct 2924; 53 L Ed 2d 1062 (1977); United States v Schmitz, 542 F2d 782, 785 (CA 9, 1976), cert den, 429 US 1105; 97 S Ct 1134; 51 L Ed 2d 556 (1977).

While the question has never been considered by Michigan appellate courts in reported cases, the exclusivity of Congress’ power has been consistently recognized by the State courts which have had occasion to consider the matter: e.g., Chermack v Bjornson, 302 Minn 213; 223 NW2d 659, 660-661 (1974), cert den, 421 US 915; 95 S Ct 1573; 43 L Ed 2d 780 (1975), where the Minnesota Supreme Court ruled that the state was not required to tender income tax refunds in gold and silver coin; Radue v Zanaty, 293 Ala 585; 308 So 2d 242, 244 (1975), where the Alabama Supreme Court held that it was impermissible for a taxpayer to tender payment of income taxes by checks redeemable only in gold or silver coin; Leitch v State Department of Revenue, 16 Ore App 627; 519 P2d 1045, 1046 (1974), in which the Oregon Court of Appeals described as ‘frivolous’ the taxpayer’s contention that transportation taxes could only be collected by the state in gold and silver; Allen v Craig, 1 Kan App 2d 301; 564 P2d 552, 556-557 (1977), in which the Kansas Court of Appeals rejected a taxpayer’s attempt to pay $4,000 in personal and real property taxes with a check which called for payment in 800 silver dollars, allegedly worth 5 times as much as federal reserve notes; Trohimovich v Director of Department of Labor, 21 Wash App 243; 584 P2d 467, 470 (1978), where the Washington Court of Appeals denied an attempt by the owners of a business to make payment of state industrial insurance premiums with checks reflecting the owners’ conversion of the total dollars due into gold based on final daily price-fixings of gold on the London Market; and Middlebrook v Mississippi Tax Commission, 387 So 2d 726, 728 (Miss, 1980) where the Mississippi Supreme Court held that federal reserve notes are taxable dollars for the purposes of paying state income tax assessments.

It is my opinion, therefore, that US Const, art I, Sec. 10 does not require the State of Michigan to pay its debts or receive payment for debts exclusively in either gold or silver coin. It is further my opinion that the State may not require the payment of private debts excusively in either gold or silver coin since Congress alone possesses and exercises this authority.

Frank J. Kelley

Attorney General

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