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If our nation can issue a dollar bond,
it can issue a dollar bill.
The element that makes the bond good
makes the bill good, also.

...Both are promises to pay...

If the currency issued by the Government were no good,
then the bonds issued would be no good either

- Thomas Edison
New York Times, Dec. 6, 1921

Analysis

Grey (2020), Administering Money:
Coinage, Debt Crises, and the Future of Fiscal Policy


Grey (2021), Interview With Former Mint Director Philip N. Diehl
(Video | Transcript)

Authorities

Budgeting

"The Congress shall have Power...to pay the Debts and provide for the common Defence and general Welfare of the United States"

- Article I, Section 8, U.S. Constitution

"No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law"

- Article I, Section 9, U.S. Constitution

Spending

"[The President] shall take Care that
the Laws be faithfully executed"

- Article II, Section 3, U.S. Constitution

"The validity of the public debt of the United States, authorized by law...
shall not be questioned"

- 14th Amendment, Section 4, U.S. Constitution

"When Congress has expressly directed that sums be spent,
the executive has no constitutional power not to spend them"

- U.S. Supreme Court, Kendall v. United States ex rel Stokes (1838)

Borrowing

"The Congress shall have Power...To borrow Money on the credit of the United States"

- Article I, Section 8, U.S. Constitution

"The Secretary of the Treasury may borrow on the credit of the United States Government amounts necessary for expenditures authorized by law"

- 31 U.S. Code § 3104(a)

Minting

"The Congress shall have Power ...To coin Money, [and] regulate the Value thereof"

- Article I, Section 8, U.S. Constitution

"[The Treasury Secretary] shall mint and issue coins...in amounts
the Secretary decides are necessary to meet the needs of the United States"

- 31 U.S. Code § 5111(a)(1)

"The [Treasury] Secretary may mint and issue...proof platinum coins in accordance with such...quantities [and] denominations...as the Secretary, in the Secretary’s discretion, may prescribe"

- 31 U.S. Code § 5112(k)

"The Constitution does not ordain what metals may be coined, or prescribe that the legal value of the metals, when coined, shall correspond at all with their intrinsic value in the market...it seems to have been left to Congress to determine alike what metal shall be coined, its purity, and how far its statutory value, as money, shall correspond, from time to time, with the market value of the same metal as bullion"

- U.S. Supreme Court, Legal Tender Cases (1870)

"Every obligation, heretofore or hereafter incurred, whether or not any such provisions is contained therein or made with respect thereto, shall be discharged upon payment, dollar for dollar, in any such coin or currency which at the time is legal tender for public and private debts"

- House Joint Resolution 192, June 5, 1933

"Public law gives to...coinage a value which does not attach as a mere consequence of intrinsic value. Their quality as a legal tender is an attribute of law aside from their bullion value. They bear therefore the impress of sovereign power which fixes value and authorizes their use in exchange."

- U.S. Supreme Court, Perry v. United States (1935) (quoting Ling Su Fan v. United States (1910))

Fiscal Agents

"The moneys held in the general fund of the Treasury...may, upon the direction of the Secretary of the Treasury, be deposited in Federal reserve banks...which banks, when required by the [Treasury Secretary], shall act as fiscal agents of the United States...and the revenues of the Government or any part thereof may be deposited in such banks, and disbursements may be made by checks drawn against such deposits"

- 12 U.S. Code § 391

"Congress specified the fiscal agency relationship for the purpose of putting the [Federal Reserve Banks] under the direction of the Treasury Department in certain limited circumstances"

- U.S. Court of Appeals, Second Circuit, U.S. v. Wells Fargo (2019)

"[T]here are appropriated such sums as may be necessary to reimburse Federal Reserve Banks in their capacity as depositaries and fiscal agents for the United States for all services required or directed by the Secretary of the Treasury to be performed by such banks on behalf of the Treasury or other Federal agencies"

- 12 U.S. Code § 391a

"[N]othing in this chapter shall be construed to deny the right of the Secretary of the Treasury to use [Federal Reserve System] member banks as depositaries"

- 12 U.S. Code § 392

Central Bank Independence

"Nothing in [the Federal Reserve Act] shall be construed as taking away any powers heretofore vested by law in the Secretary of the Treasury which relate to the supervision, management, and control of the Treasury Department and bureaus under such department, and wherever any power vested by [the Federal Reserve Act] in the Board of Governors of the Federal Reserve System...appears to conflict with the powers of the [Treasury Secretary], such powers shall be exercised subject to the supervision and control of the Secretary"

- 12 U.S. Code § 246

"The policy of the Federal Reserve Banks is governed by the policy of the United States with regard to them"

- U.S. Supreme Court, Am. Bank & Tr. Co. v. Fed. Reserve Bank of Atlanta (1921)

"The Treasury and the Federal Reserve System have reached full accord with respect to debt-management and monetary policies to be pursued in furthering their common purpose to assure the successful financing of the Government’s requirements and, at the same time, to minimize monetization of the public debt"

- Joint Announcement of the Treasury Secretary and Chairman of the Board of Governors of the Federal Reserve System, March 3, 1951

"Federal law recognizes two types of legal tender in the United States: “United States coins” and “Federal reserve notes” ...The Treasury Department physically creates both...However...the Treasury Department determines the supply of United States coins...[while] the Board [of Governors of the Federal Reserve System] controls the supply of notes"

- U.S. Court of Appeals, Second Circuit, U.S. v. Wells Fargo (2019)

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