Is "Constitutional" Really Constitutional?

[00:00:00]Sometimes people accuse me of being way too serious for what they want to watch, but if you guys go to the live streams that I have periodically, you know that that's not really the case. I do take my subjects kind of seriously, but I also like to have fun with this stuff, too.

[00:00:14]We've been talking a lot about 90% silver coins recently, and this is also called junk silver, but some people started calling this constitutional maybe 10-15 years ago.

[00:00:27]And sometimes people ask me why I don't use the word constitutional. I find it a little bit cumbersome. I tend to write this out quite a bit when I'm writing videos or doing research. To type 90% sign is so much easier than typing constitutional.

[00:00:44]But that's not really the reason I don't use it. So, I thought I'd answer that question in kind of a light-hearted way.

[00:00:49]Why don't I use the word constitutional?

[00:00:52]Why doesn't Dub C say the word constitutional? We never hear you say it. Let me answer that in the form of a video.

[00:00:58]If you're new to the channel, my name is Dub C, and I want to thank you for spending some time with me here today.

[00:01:02]Hopefully, you'll go ahead and click on that subscription button and become part of this community. If you're one of my returning subscribers, I want to know what you guys think. Do you use the word constitutional? I'm going to present my arguments for why I don't use the word constitutional, and maybe by the end of the video, I'll have you convinced also.

[00:01:20]But if I don't, that is perfectly fine.

[00:01:23]Old Dub C's not trying to tell you what you should use. I'm just explaining why I don't use that word. Uh I'd like to know those comments down below. Keep it civil, but I look forward to reading those, and I encourage everybody else to read through those comments, too.

[00:01:37]If you are new to the channel, I like to begin my videos with a simple disclaimer. I am not a financial advisor. I'm not trying to offer you any kind of financial advice. I'm simply trying to share some of my experience having bought and sold precious metals and rare coins for the last 30 or 40 years. I also like to begin my videos with a concept or two that we can kind of fold back into the subject and I'm going to hit you with one that sounds very academic and dry, but that's really what we're talking about here today, right?

[00:02:05]The concept is the idea of semantic shift. Some people call this semantic drift and the definition you're looking at here is that it it's a form of language change regarding the evolution of word usage, usually to the point that the meaning becomes radically different from the original usage or to encompass meanings not originally accurate. So, what this is saying is that sometimes in English in particular, our language is made up of all sorts of words from around the world. But sometimes the words that we use take on a completely different meaning, sometimes even the exact opposite meaning of what they were originally intended to do. And I think that that might come into play with the word constitutional. And if so, then it is perfectly valid to use this word. But again, this video is about why I don't use that word. So, I wanted to lay out my arguments and see if you agree with that and this entire position once we get to it. The term constitutional is often applied to gold and silver because the constitutional Constitution, the US Constitution, mentions gold and silver.

[00:03:09]So, some people say that that's what money should be. But I wanted to provide a little bit of context and we'll talk about the Constitution itself and we'll show you exactly where those words appear in the Constitution, both in the form of online searchable databases, but also some really cool classic vintage bullion that make use of this exact part of the United States Constitution. But before we get there, I want to try to put this in historic context because I think this is significant. Imagine that you are alive in the American colonies in the 1770s and you're confronted with money. We've got two great examples of paper money here. Every one of the colonies issued its own paper currency and it wasn't really the paper currency that we're used to in the 2020s in the United States of America. These were really bills of credit. I've got an example here from New York. This is from the colony, right, of New York State. This was issued in 1775, and this is a bill of credit issued for the equivalent of five Spanish milled dollars. The Spanish milled dollar, they're talking about the eight reales. We talk about those often on this channel. Note that that was denominated in Spanish currency. The Spanish silver was highly prized.

[00:04:23]So, it's not surprising that New York would have denominated its bills in the Spanish dollar. But, lots of other colonies issued currency that was based on the British currency at the time.

[00:04:33]These were British citizens. So, it's not unusual to find these currencies issued in uh crowns or pounds or shillings or the other pieces of British currency of this time.

[00:04:46]So, it's already kind of a confusing mishmash of denominations and currencies. But, it's also determined the value of these pieces is determined on the economic viability of the colony that is issuing these. So, a pound note issued in Georgia might be valued significantly higher than a pound note issued in the colony of New York or New Jersey. So, this is adding to the complexity and the difficulties if you're trying to transact commerce across colony lines or outside of your colony, even within your colony. Are these notes denominated in the same currency? Are they valued the same way based on the economics of that particular colony? You can see just how complex and problematic this is. This is a a note issued by the Continental Congress. This dates from 1776, and this is also issued in Spanish currency. But, this is really interesting because on the back of it, you see on a note, this is a pretty hash note. Uh Uh, this is a leaf from a tree. Why is that leaf there? This is actually something that was instituted by Benjamin Franklin, who was trying to make these notes more difficult to counterfeit. This was a big problem, so much so that most of the notes of this period of time have the motto "Tis death to counterfeit" on them. That's how seriously they took this, and that's how uh susceptible these bills were to counterfeiting. So, you can see the complexities are being made even more difficult by the fact that sometimes these bills were counterfeited. But, as the revolution started to really take hold, and these colonies were issuing paper currency at an alarming rate, Great Britain was fully aware of that. And Great Britain started issuing counterfeit notes in enormous quantities in an effort to bring down the value of these notes to make it much more difficult to fight against them. This was economic warfare, and Great Britain was very good at doing that.

[00:06:45]Was the average person in the colonies or the emerging United States really impacted by these? Probably to an extent, but not nearly as much as the rich guys were, right? The business owners, the huge farm owners, the people that were involved in commerce, the people that were involved in international shipping, they were the ones whose fortunes were being impacted by these counterfeit and questionable notes.

[00:07:12]So much so that by the end of the Revolutionary War, these bills were being redeemed, if they were even being redeemed, it was at 1% or even less than their 1% of their face value. This is where the expression not worth a continental comes from. It just meant that something was so worthless that it was worth less than one of these pieces that was redeemed at 1% of its face value.

[00:07:36]These landowners, these rich, well-educated, well-off people who were really behind the revolution were the ones who were being impacted by this.

[00:07:44]So, that is the context that I want us to think about the term constitutional in these paper currency notes. This was still fresh in these guys' minds. This was front and center while they were writing the United States Constitution.

[00:07:58]So, what does the US Constitution actually say about gold and silver? All of that comes down to Article 1 Section 10 of the Constitution. And this is such a popular part of the Constitution that this has been part of our stacking community for decades. You're looking at a Constitution mint piece that dates all the way back to 1973. But, if you look at it, a beautiful piece, right? You turn it over. This is Section 10 of Article 1 of the US Constitution. We can see it right here.

[00:08:26]Article 1 Section 10. They've actually put it on one of these 1 Troy oz silver rounds. This is a really neat piece from the Crabtree Mint. This dates to 1985.

[00:08:37]And you can see that except that exact same part of the Constitution is imprinted in this great big 20 oz silver bar. That's how important, that's how significant this part of the Constitution has been to our stacking community for decades. But, does it really mean what people think it means?

[00:08:55]We're going to take a look at this and try to to figure out if this is actually what constitutional means. So, let's take it a look at Article 1 Section 10 of the Constitution.

[00:09:05]No state shall enter into any treaty, alliance, or confederation, grant letters of marque and reprisal, coin money, emit bills of credit, or make anything but gold and silver coin a tender in payment of debts.

[00:09:26]That's the actual verbiage that's used in the United States Constitution. What does it mean?

[00:09:31]I emphasize no state. And there's a reason for that. Remember, the US Constitution is the federal government.

[00:09:38]It's not the state government. It's the federal government. And what the federal government is saying is that no longer can states issue their own bills of credit. No longer can the states issue this paper currency that got so many people into trouble. This is front and center in the Founding Fathers' minds.

[00:09:57]If the states are going to spend money like a drunk sailor, they have to spend gold and silver. The United States federal government is not going to bail them out if they run up bills of credit that they can't pay for.

[00:10:12]So, the federal government is saying that states can't make their own currency. They can't make their bills of credit. If they're going to run up expenses, they have to pay for that in gold and silver. It's pretty clear, right? That's pretty easy to understand.

[00:10:25]So, who does get to determine what money is in the United States? This isn't saying that gold and silver have to be used as money in the United States of America. It's simply saying that states have to use gold and silver. They can't make their own paper currency and run up enormous debts.

[00:10:42]So, United States Congress uh and the Constitution also says who does get to make money. And that is section eight of Article 1 of the US Constitution. And it says, "The Congress." Right? That is the United States government. The Congress, meaning the federal government, shall have power to coin money, regulate the value thereof, and fix the standard of weights and measures.

[00:11:09]So, the Congress is giving themselves exclusive power to decide what is money.

[00:11:15]And nowhere in the Constitution does it say that the federal government is determining that gold and silver have to be used as money. They're just saying that the states have to use that if the states are going to spend money.

[00:11:27]So, what is money? Who gets to decide what is money? The federal government gets to decide. and we saw this come to the Supreme Court over 100 years ago in the Supreme Court case called Juilliard versus Greenman. This case >> [gasps] >> uh one of these principals owed the other an enormous amount of money and started paying it back in American paper money, right? The greenback. And this individual didn't want greenbacks. They wanted gold and silver. So, they took this all the way to the Supreme Court, and the Supreme Court ruled almost unanimously, 7 to 1 at the time, that the federal government gets to decide what money is, and the federal government decided that paper currency was sufficient for paying debts. That's why these bills say right on them, "This debt is legal tender for all debts, public and private."

[00:12:16]So, in this case of Juilliard versus Greenman, the Supreme Court ruled that this individual had to accept greenbacks. This is what the federal government said paper money was. There is no argument about constitutionality of gold and silver. That has nothing to do with what actual money is. Now, if you were paying close attention, you might have caught the word coin, to coin money. Only the federal government has the power to coin money, and this was one of the arguments that was brought up in this court case.

[00:12:46]The individual who brought this up was saying that if they would have used the word coin, that must mean that they're talking about metal, gold and silver, right? And the Supreme Court saw this argument and said that wasn't true. In this case, to coin just meant to produce. So, in this case, the United States government gets to decide what money is. The United States government said it could be paper money, and that's what the Supreme Court affirmed. The Constitution meant whatever the federal government wanted to call money was money.

[00:13:14]I've got some other examples of that I want you to think about. Not everybody likes fiat currency, especially in our community. We talk about that all the time.

[00:13:21]But I want you to consider the very first coin that was ever struck by the United States of America. Do you know what it was?

[00:13:28]It's the 1787 Fugio cent, and you're taking a look at it here. This is a fantastic example. A lot of people think that Benjamin Franklin was behind the design of this piece, and I happen to agree with them.

[00:13:40]It says Benjamin Franklin all over it to me, in my opinion. But, this was made out of 10 g of copper. Nowhere in the Constitution does it mention copper, and yet this was the very first coin we ever struck, the Fugio cent of 1787. I've got some other examples. We've got some classic nickels, right? Uh we're looking at a V nickel from the early 1900s.

[00:14:02]We've also got some buffalo nickels here. Nowhere in the Constitution does it mention nickel being used, and yet these have been used for well over 100 years, also. We've got some copper cents. These are pre-'82 cents. I know some people have a hard time believing that we used to actually spend copper cents. We've got some zinc cents. These are a lot less popular, made after 1982.

[00:14:23]We've got some clad coinage.

[00:14:25]All of these have been used within the United States for well over 100 years, 150 years, even, and none of them are mentioned in the Constitution.

[00:14:36]Nickels, cents made out of copper, cents made out of zinc, dimes and quarters, and uh half dollars made out of a clad coinage metal, all of these are units of exchange that have been used in the United States for so long, and they are not made out of gold and silver, and they are still considered money.

[00:14:55]Interesting, right?

[00:14:57]Now, I've got some other arguments, if this didn't quite compel you, right? If you still don't agree that this stuff is money, according to the United States government, and that this is not what constitutional means.

[00:15:08]If these pieces, the dimes, the quarters, and the half dollars that were made before 1965 are what people think of as constitutional, if you're one of those folks who still calls this constitutional, think of this argument.

[00:15:21]Nowhere in the Constitution does it say that you can alloy these metals with anything else? And yet, these are 90% silver, right? These are 90% silver, 10% copper. Is that not allowed under the definition of the word constitutional?

[00:15:35]This is an American Silver Eagle. This is a denominated $1 coin issued by the United States of America, and it is 3 9's fine. If anything, this would probably be considered even more constitutional than these constitutional pieces are. But, nobody would consider this to be constitutional. If you walked into a coin shop and said I wanted a constitutional dollar, would they pull out an American Silver Eagle? Or would they pull out a 1921 Morgan dollar, right? So, at what point can you use diluted silver, this alloyed silver, and still have it represent constitutional?

[00:16:11]If you are going to allow that, don't you also have to use the war nickel?

[00:16:16]This is a 35% nickel silver 35% silver nickel that was issued between 1942 and 1945. It contains silver. It was made by the United States of America. It was minted at the United States Mint. I know this piece is really hashed. This is something that I dug with my metal detector many years ago.

[00:16:34]If you're going to allow silver that has been alloyed with other metals, would you not also have to allow a war nickel and call that constitutional?

[00:16:43]Nobody would call a war nickel constitutional. What do we call a war nickel? We call it a war nickel. That's because that meaning is very precise. It means exactly these pieces. How about the 1969 40% silver Kennedy half dollar that you see here?

[00:17:00]From 1965 through 1970, we reduced the silver quantity in our half dollars from 90% to 40%. But, if you're going to allow alloys of silver to be called constitutional, don't you also have to allow the 40% Kennedys to be included in that definition?

[00:17:17]I would argue that these are called 40%.

[00:17:20]Everybody I've ever heard call these anything has called them 40%. They wouldn't call them constitutional, just like they wouldn't call an American Silver Eagle constitutional, and they wouldn't call a war nickel constitutional. Yet, for some reason, these pieces are called constitutional.

[00:17:36]I find the word to be a little bit difficult to use. It's a lot of syllables. I don't think it's very precise. And when it comes to precision, when it comes to precious metals, we know that nothing is more important than being able to describe exactly what you mean. The purity of the metal is incredibly important. The type of metal is incredibly important. Constitutional, if it represented all of these pieces, would start to lose its meaning. When you have to use other words, no, I don't mean that that constitutional, I mean the 40% constitutional. Why don't you just say 40% in the first place? Why don't you just say war nickel or ASE?

[00:18:15]You can see that by putting everything under the umbrella of constitutional, constitutional loses its value as a word. And when you have to start supplementing that with other words, there's no reason to use it in the first place.

[00:18:29]I'm not sure why people have picked up the idea of constitutional. We've shown that that's not really what the Constitution meant in the first place, right? That was a bunch of rich guys saying they didn't want states to issue their own paper currency. And if we're going to use it as an alloy, then we have to include these other pieces. It just gets to be a meaningless word, and that's why I don't use the word constitutional.

[00:18:51]But, we started this video off with the idea of semantic shift. And you could make the argument that if enough people are starting to use constitutional to describe these pieces, then eventually over time, that is what the word constitutional starts to mean. But to me, it's just a cumbersome word. It's too many syllables, and I would rather use something that was much more specific and much more precise.

[00:19:16]Did I anger you? Are you mad at all dub c? Do you agree with me? Does it matter to you in the least? Remember, like I said at the beginning of this video, I'm not trying to tell you that you can't use that word. I'm just trying to explain why I don't use the word constitutional, and maybe now you've got at least an idea of why you don't hear me use that word when I'm talking about 90%.

[00:19:38]If you have any questions about anything that I talked about here today, by all means leave a question down below, but keep it civil. Remember, this is a light-hearted explanation. I'm not trying to go off on anybody. I'm just trying to explain why I don't use that word. If you have a question, there's a good chance somebody else has a question. Go ahead and answer it or ask that question and see if we can answer it for everybody. If you are not yet subscribed to the channel, once again, love to encourage you to click on that subscription bus button, but also hit the notification bell. I premiere brand new videos most Friday evenings.

[00:20:08]Hopefully, you are watching this video with me for the first time it plays for all of us on a Friday night, but if you are, definitely stick around for the live stream because we often go live immediately after these video premieres.

[00:20:21]The live stream is a chance to interact with me in a live environment. We get people from all around the world joining in. Sometimes, we get additional uh YouTube content creators joining us in the live streams. This is a fun, action-packed fun way to start the weekend. I look forward to these live streams. Often, we talk about the subject that we just covered in the premier video that aired earlier, but as long as your comments and questions are about coins and precious metals, the floor is wide open. I really look forward to those live streams, and I hope I will see you at the next live stream.

[00:20:50]I like to end my videos by saying always be learning.

[00:20:54]And thank you for allowing me to be a part of your journey as we go deeper into the world of coins and physical precious metals.