In 1981, “Sports Illustrated” published a cover showing $100 bills falling into a basketball hoop. The lead story was about a college basketball point-shaving scandal.
The Secret Service warned Time Inc., the magazine’s publisher, that the color reproduction of the money could violate federal laws against photographing and reproducing U.S. currency. Time Inc. challenged the laws in court in what became Regan v. Time Inc. (1984), and argued that the law violated the First Amendment’s protection of freedom of speech and freedom of the press.
The Supreme Court agreed, in part, and ruled that the government could not decide whether a picture of U.S. currency was legal based on whether it considered the picture “newsworthy” or “educational.” The Court explained that doing so allowed the government to judge speech based on its content.
The government’s authority to prosecute the case comes from another one of the enumerated powers in Section 8. In Article I, Section 8, Clause 6, our Constitution reads, “To provide for the Punishment of counterfeiting the Securities and current Coin of the United States.”
The clause means that Congress has the authority to create laws punishing people who make counterfeit U.S. money or create the materials used to allow counterfeiting. Although the language of the Clause is short, it plays an important role in protecting the country’s monetary system. What the Regan case shows, however, is that Congress’s power is not unlimited. Congress and the government still must respect other constitutional rights, including freedom of speech and freedom of the press.
The Counterfeiting Clause was included in the Constitution because our Founders understood the importance of having a reliable national currency. Under the Articles of Confederation, the national government was weak and had limited ability to manage the country’s economic problems. The United States had experienced serious problems with paper money from state and local banks causing inflation after the Revolutionary War. Paper money flooded the country and contributed to serious economic problems. As I wrote last month, the Constitutional Convention therefore gave Congress specific powers involving money, including the power to coin money, regulate its value, and, with Clause 6, punish counterfeiting.
In “Federalist No. 42,” James Madison discussed Congress’ authority over monetary matters and the importance of having national control over currency:
“All that need be remarked on the power to coin money, regulate the value thereof, and of foreign coin, is, that by providing for this last case, the Constitution has supplied a material omission in the articles of Confederation. The authority of the existing Congress is restrained to the regulation of coin STRUCK by their own authority, or that of the respective States. It must be seen at once that the proposed uniformity in the VALUE of the current coin might be destroyed by subjecting that of foreign coin to the different regulations of the different States. The punishment of counterfeiting the public securities, as well as the current coin, is submitted of course to that authority which is to secure the value of both. The regulation of weights and measures is transferred from the articles of Confederation, and is founded on like considerations with the preceding power of regulating coin.”
What Madison is saying is that under the Articles of Confederation, Congress could only regulate the value of coins made in the U.S. This was a problem because foreign coins could have different values in different states. The Constitution fixed this problem by giving Congress the power to regulate the value of U.S. coins and foreign coins in a uniform way. He then connects this power to counterfeiting. He explains that the same government responsible for protecting the value of money should also have the power to punish people who counterfeit U.S. coins and government securities.
In other words, if Congress is responsible for maintaining a trustworthy national currency, it also must have the authority to protect that currency from being faked.
The Supreme Court has played an important role in explaining what Clause 6 means. In Fox v. Ohio (1847), the Court held that a state could punish a person for using counterfeit coins, even though counterfeiting is a federal crime. This established that the Counterfeiting Clause did not prevent states from creating their own laws against counterfeit money. In other words, double jeopardy did not apply if a person was tried in both state and federal courts.
Another important case was United States v. Marigold (1850). The Court upheld federal laws dealing with the circulation and importation of counterfeit coins. Even though the Constitution gives Congress the power to punish counterfeiters, the Court reasoned that this included the power to punish those who brought counterfeit money into the country or circulated it.
The Court continued this reasoning in Baender v. Barnett (1921). In that case, the Court upheld federal punishment involving the possession of dies that could be used to make counterfeit U.S. coins. This demonstrated that federal counterfeiting laws could reach beyond the actual act of producing a fake coin. Congress could also take steps to prevent the tools and activities that make counterfeiting possible.
The main gist of Clauses 5 and 6 is that Congress has the responsibility to protect the integrity and reliability of the nation’s money.
James Finck is a professor of American history at the University of Science and Arts of Oklahoma. He can be reached at james.finck@swoknews.com. Thanks to the Southwest Ledger and the Lawton Constitution for sharing his column.
