The monetary power of Congress flows from one express constitutional grant and a melange of others, cemented by the NECESSARY AND PROPER CLAUSE. The enumerated power deals with coin and has never been significant in American constitutional law. Congress's more important powers over the money supply?to charter banks and endow them with the right to issue circulating notes, to emit BILLS OF CREDIT, and to make government paper a legal tender?are only implied. From the administration of GEORGE WASHINGTON to the age of FRANKLIN D. ROOSEVELT, few questions were debated with more intensity than the nature and scope of Congress's IMPLIED POWERS over the currency. At no point, however, did the Supreme Court offer sustained resistance to the extension of Congress's authority. In MCCULLOCH V. MARYLAND (1819), the lodestar case on the monetary power, the MARSHALL COURT upheld incorporation of a bank as an appropriate means for executing "the great powers, to lay and collect taxes; to borrow money; to regulate commerce; to declare and conduct a war; and to raise and support armies and navies." The HUGHES COURT invoked the same undifferentiated list of enumerated powers, reinforced by the necessary and proper clause, in the GOLD CLAUSE CASES (1935), where the last potential limitation on Congress's monetary power was swept away.
Two factors account for the Court's acquiescence. The ambiguous legacy of the CONSTITUTIONAL CONVENTION OF 1787 was especially important. Monetary questions loomed large in the political history of the Confederation era, and some of the Founders, perhaps a majority, wanted to constitutionalize a settlement. They acted decisively to curtail state power. Article I, section 10, provides that "no state shall ? coin money; emit bills of credit; [or] make anything but gold and silver coin a tender in payment of debts." But the Founders were more circumspect when dealing with the scope of national power. JAMES MADISON'S motion to vest Congress with a general power "to grant charters of incorporation" was not adopted because, as RUFUS KING explained, the bank question might divide the states "into parties" and impede ratification. JAMES WILSON suggested that the power to incorporate a bank was implied anyway; but GEORGE MASON, the only other delegate to speak on the matter, disagreed.
Conflicting conceptions of implied powers also materialized without being resolved in the much longer debate on Congress's authority to augment the money supply with government paper. The original draft of the Constitution, as reported to the convention by the Committee of Detail, empowered Congress "to borrow money and emit bills on the credit of the United States." When this section was reached in debate, GOUVERNEUR MORRIS moved to strike out the emission clause; the motion was ultimately carried by a vote of nine states to two. Yet there was no meeting of minds on the implications of Morris's motion before the roll call. Wilson, Mason, and virtually everyone else who spoke assumed that striking out the emission power was equivalent to prohibiting congressional exercise of such a power. Morris said that "the monied interest will oppose the plan of government if paper emissions be not prohibited." But NATHANIEL GORHAM remarked that he was for "striking out, without inserting any prohibition." And that was precisely what happened. Gorham neither mentioned the concept of implied powers nor flatly stated that eliminating the power to emit was by no means equivalent to prohibiting it. His remarks nonetheless suggest that at
least some of the Founders assumed, despite Morris's protestations to the contrary, that to vote for his motion was to leave the paper money question to be settled as problems arose.
The sequence of federal legislation on banking and the currency was the second factor that shaped the growth of Congress's monetary power...