A crisis of dollars and sense: the "dollar" bills that we routinely exchange for goods and services are not genuine constitutional dollars, but promissory notes substituting for the real thing.(CONSTITUTION CORNER)

Every day, millions of Americans receive and pay out what they think are "dollars." Yet, in almost every instance, they are deceiving themselves. For the "one-dollar" (picture of George Washington on its face) Federal Reserve Note (FRN) that most everyone uncritically calls a "dollar" is not a "dollar" at all. No statute of the United States has ever declared that note to be a "dollar." Neither could such a declaration ever be made. For each and every FRN, of whatever denomination, is only a "note"--a private bank's promise to pay the holder a stated number of "dollars." Self-evidently, a promise to pay some thing is not that thing itself.

Even the statute that authorizes the emission of FRNs requires that "They shall be redeemed in lawful money on demand at the Treasury Department ... or at any Federal Reserve bank" (12 U.S.C. [section] 411)--which proves that FRNs are not themselves "lawful money." Another statute does declare FRNs to be "legal tender for all debts, public charges, taxes, and dues" (31 U.S.C. [section] 5103). But FRNs would not have to be declared "legal tender" if they were actually "dollars." Rather, the statutory designation "legal tender" recognizes that FRNs are not "dollars," but may be used as substitutes for "dollars" with respect to any payment covered by the law.

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Thus, amazing as it may seem, the present chaotic circumstances plaguing America's financial markets have nothing to do with the true "dollar." The markets' derangement has arisen, over the course of decades, from the absence of the "dollar" in day-to-day economic transactions--indeed, from having the "dollar" supplanted as the American people's official monetary unit so that hardly anyone anywhere in this country employs the "dollar" as his medium of exchange or standard of value. This has occurred because all too many Americans have simply forgotten, or have never learned, what a real "dollar"--a constitutional "dollar"--is.

The constitutional "dollar" is a specific silver coin--and nothing else. A "dollar" derives from the Spanish milled dollar, which was proposed as America's monetary unit by Thomas Jefferson, adopted as such by the Continental Congress, and then designated the standard of value in the Constitution (Article I, Section 9, Clause 1) and the Bill of Rights (the Seventh Amendment). Its then-contemporary content--371.25 grains (troy) of fine silver--was determined as an historical fact, and declared to be the value of America's own "dollar," in 1792. (See the sidebar on page 29.)

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Because the Founding Fathers knew that real "money" consists of valuable commodities, they delegated to Congress the power "To coin Money, regulate the Value thereof, and of foreign Coin" (Article I, Section 8, Clause 5). And to promote national uniformity in official coinage, the Constitution declares that "No State shall ... coin Money" (Article I, Section 10, Clause 1). So, the official "Money" of the United States is to be coin, and coin alone.