# Is it legal for a state to mint it's own money? **URL:** \ **Category:** Factual Questions\ **Created:** [April 1, 2003, 12:59am UTC](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595 "2003-04-01T00:59:44Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Reeder](https://avatars.discourse-cdn.com/v4/letter/r/c6cbf5/32.png) [@Reeder](https://boards.straightdope.com/u/Reeder)\ **Post date:** [April 1, 2003, 12:59am UTC](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595/1 "2003-04-01T00:59:44Z")
Nevada is apparently going to. In pure silver no less. [http://www.leg.state.nv.us/72nd/bills/ab/ab532.html](http://www.leg.state.nv.us/72nd/bills/ab/ab532.html) ---
**Author:** ![Freddy\_the\_Pig](https://avatars.discourse-cdn.com/v4/letter/f/a587f6/32.png) [@Freddy\_the\_Pig](https://boards.straightdope.com/u/Freddy_the_Pig)\ **Post date:** [April 1, 2003, 1:16am UTC](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595/2 "2003-04-01T01:16:23Z")
Is it silly season in Carson City again? In the extremely unlikely event that this bill passes, it will be struck down more quickly than an SDMB sock puppet. (At first I thought this must be from The Onion, but the cite seems legit.) ---
**Author:** ![Fang](https://avatars.discourse-cdn.com/v4/letter/f/96bed5/32.png) [@Fang](https://boards.straightdope.com/u/Fang)\ **Post date:** [April 1, 2003, 1:16am UTC](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595/3 "2003-04-01T01:16:50Z")
[No](http://www.archives.gov/exhibit_hall/charters_of_freedom/constitution/constitution_transcription.html): > [@](#): > > No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; **coin Money** ; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility. [emphasis added] ---
**Author:** ![brianmelendez](https://avatars.discourse-cdn.com/v4/letter/b/65b543/32.png) [@brianmelendez](https://boards.straightdope.com/u/brianmelendez)\ **Post date:** [April 1, 2003, 1:18am UTC](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595/4 "2003-04-01T01:18:40Z")
Nevada cannot coin its own money: > [@](#): > > No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; _coin money_; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility. [U.S. Const., art. I, sec. 10, cl. 1](http://www.law.cornell.edu/constitution/constitution.articlei.html#section10) (emphasis added). The provision that a state cannot “make anything but gold and silver coin a tender in payment of debts” does not mean that the state can coin silver and make it legal tender, but rather prohibits the state from making paper money into the exclusive legal tender: > [@](#): > > The right of coining money, which is here taken from the States, was left in their hands by the Confederation, as a concurrent right with that of Congress, under an exception in favor of the exclusive right of Congress to regulate the alloy and value. In this instance, also, the new provision is an improvement on the old. Whilst the alloy and value depended on the general authority, a right of coinage in the particular States could have no other effect than to multiply expensive mints and diversify the forms and weights of the circulating pieces. The latter inconveniency defeats one purpose for which the power was originally submitted to the federal head; and as far as the former might prevent an inconvenient remittance of gold and silver to the central mint for recoinage, the end can be as well attained by local mints established under the general authority. > > . . . . [T]he same reasons which show the necessity of denying to the States the power of regulating coin, prove with equal force that they ought not to be at liberty to substitute a paper medium in the place of coin. Had every State a right to regulate the value of its coin, there might be as many different currencies as States, and thus the intercourse among them would be impeded; retrospective alterations in its value might be made, and thus the citizens of other States be injured, and animosities be kindled among the States themselves. The subjects of foreign powers might suffer from the same cause, and hence the Union be discredited and embroiled by the indiscretion of a single member. No one of these mischiefs is less incident to a power in the States to emit paper money, than to coin gold or silver. The power to make any thing but gold and silver a tender in payment of debts, is withdrawn from the States, on the same principle with that of issuing a paper currency. [The Federalist No. 44](http://memory.loc.gov/cgi-bin/query/D?fed:1:./temp/~const_k0WS::). ---
**Author:** ![Walloon](https://avatars.discourse-cdn.com/v4/letter/w/fbc32d/32.png) [@Walloon](https://boards.straightdope.com/u/Walloon)\ **Post date:** [April 1, 2003, 1:18am UTC](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595/5 "2003-04-01T01:18:57Z")
U.S. Constitution, Article I, Section 8: “The Congress shall have power to . . . coin money, regulate the value thereof, and of foreign coin. . .” ---
**Author:** ![Reeder](https://avatars.discourse-cdn.com/v4/letter/r/c6cbf5/32.png) [@Reeder](https://boards.straightdope.com/u/Reeder)\ **Post date:** [April 1, 2003, 1:21am UTC](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595/6 "2003-04-01T01:21:32Z")
Could they make it legal for debts incurred only in Nevada? Perhaps at the casinos? ---
**Author:** ![Fang](https://avatars.discourse-cdn.com/v4/letter/f/96bed5/32.png) [@Fang](https://boards.straightdope.com/u/Fang)\ **Post date:** [April 1, 2003, 1:43am UTC](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595/7 "2003-04-01T01:43:25Z")
> [@](#): > > \*Originally posted by Reeder \* > \*\*Could they make it legal for debts incurred only in Nevada? Perhaps at the casinos? \*\* I doubt it. See my constitutional citation above - states can’t make anything legal tender (under any circumstances, implicitly, including within their boundaries), except gold, silver, and of course the Almighty Dollar. ---
**Author:** ![Freddy\_the\_Pig](https://avatars.discourse-cdn.com/v4/letter/f/a587f6/32.png) [@Freddy\_the\_Pig](https://boards.straightdope.com/u/Freddy_the_Pig)\ **Post date:** [April 1, 2003, 1:58am UTC](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595/8 "2003-04-01T01:58:46Z")
We seem to be off the rails here. The problem with this bill isn’t that it would make the silver coins legal tender–that would be perfectly constitutional–but that it calls for **the state of Nevada to mint the coins** , in an obvious violation of the “no state shall coin money” provision. ---
**Author:** ![BobT](https://avatars.discourse-cdn.com/v4/letter/b/8e8cbc/32.png) [@BobT](https://boards.straightdope.com/u/BobT)\ **Post date:** [April 1, 2003, 2:11am UTC](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595/9 "2003-04-01T02:11:12Z")
I think that Nevada should stick to granting letters of marque and reprisal. Someone needs to avenge Nevada’s wrongs on the high seas! ---
**Author:** ![Derleth](https://avatars.discourse-cdn.com/v4/letter/d/b9e5f3/32.png) [@Derleth](https://boards.straightdope.com/u/Derleth)\ **Post date:** [April 1, 2003, 2:54am UTC](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595/10 "2003-04-01T02:54:02Z")
I hope some Nevadans weigh in on how their legislators deliberatly introduce nonsense legislation to lighten the mood and wake up the more stodgy. If a bill laden down with Fed-bashing reminscent of the Republic of Texas’ webpage and proposing the introduction of mid-19th-century-era specie _isn’t_ a joke, we have much to fear for the Republic. Seriously, I haven’t laughed this hard in a good, long while. [sub]If they think those coins _wouldn’t_ be hoarded, they’ve missed the demise of the dollar (repeatedly) and the half-dollar coins.[/sub] ---
**Author:** ![RealityChuck](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/realitychuck/32/195_2.png) [@RealityChuck](https://boards.straightdope.com/u/RealityChuck)\ **Post date:** [April 1, 2003, 3:45am UTC](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595/11 "2003-04-01T03:45:04Z")
Man, that law is silly. A shining example of tortuous pseudologic. False premises that result in a conclusion that doesn’t even follow. :rolleyes: ---
**Author:** ![stuyguy](https://avatars.discourse-cdn.com/v4/letter/s/ec9cab/32.png) [@stuyguy](https://boards.straightdope.com/u/stuyguy)\ **Post date:** [April 1, 2003, 5:07am UTC](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595/12 "2003-04-01T05:07:07Z")
I just hope they don’t hire the guy who built their webpage to design their coins. My eyes are still throbbing with pain. ---
**Author:** ![Dogface](https://avatars.discourse-cdn.com/v4/letter/d/9d8465/32.png) [@Dogface](https://boards.straightdope.com/u/Dogface)\ **Post date:** [April 1, 2003, 6:07am UTC](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595/13 "2003-04-01T06:07:03Z")
While making “legal tender” is reserved exclusively to the Federal government, this does not make it necessarily illegal for “local tender” to be issued and used. One example is “Ithaca Hours”: [http://www.ithacahours.com/](http://www.ithacahours.com/) and [http://www.ithacahours.org/](http://www.ithacahours.org/) have more information. This has been going on for more than a decade and is entirely on the up-and-up, thoroughly legal and completely known to the Federal government. There are no coins in the system. The lowest value is 1/8 Hour (considered equivalent to $1.25). Any Hours income is to be reported according to the 1 Hour = $10.00 equivalent in all tax transactions. ---
**Author:** ![David\_Simmons](https://avatars.discourse-cdn.com/v4/letter/d/9de053/32.png) [@David\_Simmons](https://boards.straightdope.com/u/David_Simmons)\ **Post date:** [April 1, 2003, 6:22am UTC](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595/14 "2003-04-01T06:22:17Z")
> [@](#): > > \*Originally posted by Dogface \* > \*\*While making “legal tender” is reserved exclusively to the Federal government, this does not make it necessarily illegal for “local tender” to be issued and used. One example is “Ithaca Hours”: [http://www.ithacahours.com/](http://www.ithacahours.com/) and [http://www.ithacahours.org/](http://www.ithacahours.org/) have more information. This has been going on for more than a decade and is entirely on the up-and-up, thoroughly legal and completely known to the Federal government. > > There are no coins in the system. The lowest value is 1/8 Hour (considered equivalent to $1.25). Any Hours income is to be reported according to the 1 Hour = $10.00 equivalent in all tax transactions. \*\* During the early days of the sales tax states issued tokens in the form of coins that could be used to pay the sales tax. This site shows that they are now [collectors’ items.](http://www.geocities.com/RodeoDrive/Mall/2326/VGtokens.html) You have to scroll down the page some. ---
**Author:** ![smiling\_bandit](https://avatars.discourse-cdn.com/v4/letter/s/e9a140/32.png) [@smiling\_bandit](https://boards.straightdope.com/u/smiling_bandit)\ **Post date:** [April 1, 2003, 12:48pm UTC](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595/15 "2003-04-01T12:48:21Z")
> [@](#): > > Could they make it legal for debts incurred only in Nevada? Perhaps at the casinos? But gambling debts aren’t legal obligations, though. ---
**Author:** ![TheLoadedDog](https://avatars.discourse-cdn.com/v4/letter/t/35a633/32.png) [@TheLoadedDog](https://boards.straightdope.com/u/TheLoadedDog)\ **Post date:** [April 1, 2003, 1:05pm UTC](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595/16 "2003-04-01T13:05:13Z")
Isn’t it up to business, in the end? Surely, as long as a store continues to accept federal US currency as legal tender, it can also choose to accept phone cards, bottle tops, clam shells, or whatever the heck it likes - including State tokens (I’m sure that “no state shall coin money” stuff is easy to get around). If enough businesses accept these tokens, then they become negotiable, liquid, de facto money. ---
**Author:** ![Cliffy](https://avatars.discourse-cdn.com/v4/letter/c/59ef9b/32.png) [@Cliffy](https://boards.straightdope.com/u/Cliffy)\ **Post date:** [April 1, 2003, 2:26pm UTC](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595/17 "2003-04-01T14:26:11Z")
> [@](#): > > \*Originally posted by Dogface \* > **One example is "Ithaca Hours"** The worst part of Ithaca Hours is that everything on the Commons closes at 5:00 PM of Fridays. 😉 –Cliffy ---
**Author:** ![pravnik](https://avatars.discourse-cdn.com/v4/letter/p/8edcca/32.png) [@pravnik](https://boards.straightdope.com/u/pravnik)\ **Post date:** [April 1, 2003, 2:40pm UTC](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595/18 "2003-04-01T14:40:36Z")
> [@](#): > > \*Originally posted by TheLoadedDog \* > \*\*Isn’t it up to business, in the end? Surely, as long as a store continues to accept federal US currency as legal tender, it can also choose to accept phone cards, bottle tops, clam shells, or whatever the heck it likes - including State tokens (I’m sure that “no state shall coin money” stuff is easy to get around). If enough businesses accept these tokens, then they become negotiable, liquid, de facto money. \*\* That’s more or less what the “Ithaca Hours” system **Dogface** describes is (nice place, that Ithaca; been meaning to return there someday). It’s more or less a barter system represented by paper currency, and businesses are free to participate or not participate if they wish. However, if Ithaca or New York State tried to make it mandatory that businesses accept Ithaca Hours in payment of debt, it would be coining its own money, a constitutional no-no. ---
**Author:** ![El\_Marko](https://avatars.discourse-cdn.com/v4/letter/e/58956e/32.png) [@El\_Marko](https://boards.straightdope.com/u/El_Marko)\ **Post date:** [April 1, 2003, 2:57pm UTC](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595/19 "2003-04-01T14:57:57Z")
From the sound of the website, the coins would only be legal tender in Nevada. What’s the point of that? Who wants currency that’s only good in 2% of the country? Aside from that, who wants to deal with $20 coins? I don’t even see $20 bills that often. What the heck would I want with coins in that size denomination? It almost sounds like they want to mint a collectible coin, until it gets to the silliness about not holding them in reserve. Sigh. What is the world coming to? :rolleyes: ---
**Author:** ![pravnik](https://avatars.discourse-cdn.com/v4/letter/p/8edcca/32.png) [@pravnik](https://boards.straightdope.com/u/pravnik)\ **Post date:** [April 1, 2003, 3:16pm UTC](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595/20 "2003-04-01T15:16:06Z")
The thing is, it’s perfectly fine for them to mint a collectable coin, as long as they don’t make it “money.” Maybe they just think the law will never be challenged and they will have a cutesy “exception” to the no-coinage provision or something, I don’t really see what they’re trying to accomplish. I like the part about how Congress’ delegation to the Fed and failure to issue all of the money necessary under Article I “absolves the State of Nevada from its constitutional obligation not to issue money.” Yeah, and it’s unconstitutional to make me pay income taxes, too. Federal courts just loooove these arguments. [Next page](https://boards.straightdope.com/t/is-it-legal-for-a-state-to-mint-its-own-money/165595.md?page=2)