Could a 2008 Idaho ballot initiative require all debts, fines, taxes, and contracts to be paid only in gold or silver coin?

Plain-English summary

A petitioner filed a 2008 Idaho ballot initiative titled "The Jubilee Initiative Petition" seeking to make gold and silver coin the only legal tender for the payment of debts within Idaho. The Initiative would have nullified all financial-institution contracts denominated in non-gold/silver currencies, made all fines, debts, settlements, or liens unenforceable unless denominated in gold or silver, required taxes to be paid only in gold or silver coin or in tax certificates issued by the taxing authority, and directed the legislature to establish state depositories for the certification and circulation of gold and silver coins.

The Attorney General's Certificate of Review concluded the Initiative was unconstitutional under federal preemption analysis. The argument behind these initiatives leans on Article I, § 10 of the U.S. Constitution, which prohibits states from coining money or making "anything but gold and silver coin a tender in payment of debts." But that provision restricts only what states can declare as tender (limiting them to gold and silver if they declare anything); it does not require states to refuse to accept what Congress has designated as tender.

The exclusive constitutional authority over what is legal tender lives in Article I, § 8, cl. 5: "Congress shall have power . . . [t]o coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures." The federal court in Nixon v. Phillipoff (D.C. Ind. 1985) explained the structure clearly: "Section 8 sets forth the powers of Congress, while § 10 imposes a restriction on the states. It strains logic and constitutional interpretation to claim that the framers of the constitution sought to limit Congress' power to coin money via an implication derived from a restriction directed not at Congress but at the states."

Congress has, by federal statute (31 U.S.C. § 5103), declared Federal Reserve notes legal tender. The U.S. Supreme Court's Legal Tender Cases (1871, 1884) settled the constitutionality of that designation. The Idaho Territorial Supreme Court reached the same conclusion as early as 1867 in Haas v. Misner, holding that taxes are debt within federal law and any state law requiring taxes to be paid only in gold or silver was null and void. So an Idaho law that refused to accept Federal Reserve notes for taxes, debts, fines, or settlements would conflict with federal law and would be preempted.

The certificate treated one narrower idea differently: requiring taxes to be paid in legal tender could be constitutional if Congress defined the tender. But it said the proposed "tax certificates" were undefined and needed fuller development to avoid vagueness. It also suggested a separate initiative on tax payment to address the one-subject rule, found the proposed legislative currency-certification duty likely unconstitutional, and recommended removing an unnecessary instruction to comply with "the Constitution."

The petition itself lacked statutory warning and signature language, had signers from multiple counties on the same sheets, and needed circulator affidavits meeting Idaho's requirements.

What this means for you

If you owe an Idaho tax, fine, or debt: The certificate says Idaho could not use this initiative to refuse federally designated legal tender. It does not decide every possible payment term in a private contract; it addresses the proposed blanket rules and their conflict with Congress's currency authority.

If you are drafting a monetary initiative: The review recommends removing the gold-and-silver-only declaration and related clauses, defining any proposed tax certificate, and clarifying the proposed legislature's role. It also points to statutory petition form, county-specific signature sheets, and circulator affidavit rules.

If you are assessing this 2008 measure: The certificate is an advisory legal review. It says nothing about whether the petitioner later qualified for a ballot or how voters responded.

Currency note

This opinion was issued in 2008. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

What does Article I, § 10 actually say about gold and silver?

The relevant text: "No state shall . . . coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts." Read carefully, this restricts what a state can do, not what a state must do. If a state were to declare anything tender, it would be limited to gold and silver. The provision says nothing about whether a state must refuse what Congress has designated as tender.

What gives Congress the power to determine legal tender?

Article I, § 8, cl. 5: "[Congress shall have power] [t]o coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures." The U.S. Supreme Court in the Legal Tender Cases (1871 and 1884) confirmed that Congress's power to declare what is legal tender extends beyond gold and silver coin to paper currency.

Are Federal Reserve notes really legal tender by federal law?

Yes. The certificate cites 31 U.S.C. § 5103 for Congress's designation of Federal Reserve notes as legal tender and says Idaho must accept them as such.

What did Haas v. Misner decide?

In 1867 the Idaho Territorial Supreme Court considered whether Idaho could require taxes to be paid only in gold or silver coin. The court held that taxes are debts within the meaning of federal law, and any state law that required taxes to be paid only in gold or silver was null and void. The certificate uses that ruling to explain why Idaho cannot displace federal authority over currency.

Did this initiative make the ballot?

The Certificate of Review addresses the filed proposal. It does not report later signature gathering or ballot qualification.

Could the proposal allow payment with tax certificates?

The Attorney General could not determine the permissibility of the idea as drafted. The certificate said "tax certificate" was undefined in both the initiative and Idaho Code and would need fuller development to avoid a vagueness problem.

What was wrong with the signature sheets?

The certificate said the petition lacked the warning and certification text described in Idaho Code § 34-1801A, combined signers from multiple counties on some sheets despite § 34-1804, and needed the circulator affidavit required by § 34-1807.

Background and statutory framework

Idaho Code § 34-1809 sends every initiative petition to the Attorney General for advisory legal review.

The U.S. Constitution divides currency authority between Congress and the states. Article I, § 8, cl. 5 gives Congress power to coin money and regulate its value; the certificate quotes the Supreme Court's Legal Tender Cases on Congress's control over currency. Article I, § 10 imposes restrictions on the states but does not require them to refuse federally designated tender.

Federal Reserve notes are legal tender by congressional designation under 31 U.S.C. § 5103. The Supreme Court resolved the constitutionality of paper money in the Legal Tender Cases of 1871 and 1884 (multiple decisions across that period collectively known as the Legal Tender Cases).

The certificate applies Congress's currency authority to each operative part of the proposed initiative. It separately addresses the possible commerce burden from voiding financial contracts, the undefined tax certificates, the one-subject concern, and petition form requirements.

Citations

U.S. Constitution: art. I, § 8, cl. 5; art. I, § 10.

Federal statute: 31 U.S.C. § 5103.

Idaho Code: § 34-1809.

U.S. Supreme Court: Ogden v. Saunders, 25 U.S. 213 (1827); Legal Tender Cases, 79 U.S. (12 Wall) 457 (1871); Legal Tender Cases, 110 U.S. 421 (1884).

Federal courts: Nixon v. Phillipoff, 615 F. Supp. 890 (D.C. Ind. 1985).

Idaho Territory: Haas v. Misner, 1 Idaho 170 (1867).

Source

• Landing page: https://www.ag.idaho.gov/office-resources/opinions/
• Original PDF: https://ag.idaho.gov/content/uploads/2018/04/c102408.pdf

Original opinion text

STATE OF IDAHO
OFFICE OF THE ATTORNEY GENERAL

LAWRENCE G. WASDEN

October 24, 2008

The Honorable Ben Ysursa
Idaho Secretary of State
STATEHOUSE MAIL

Re: Certificate of Review
Proposed Initiative Petition Regarding Legal Tender in Payment of Debts

Dear Secretary of State Ysursa:

A proposed initiative petition ("Initiative") was filed with your office on September 11, 2008, and received by this office on September 25, 2008. Pursuant to Idaho Code § 34-1809, this office has reviewed the Initiative and has prepared the following advisory comments. Please know that, under the review statute, the opinions expressed in this review pertain only to the legal issues raised by the Initiative. This office offers no opinion regarding any policy issues raised by it. Furthermore, the Attorney General's recommendations are "advisory only", and Petitioners are free to "accept or reject them in whole or in part.,,1

BALLOT TITLE

Following the filing of the initiative petition, this office will prepare short and long ballot titles. The ballot titles are required by law to impartially and succinctly state the purpose of the measure without being argumentative and without creating prejudice for or against the measure. While this office prepares titles, if Petitioner would like to propose language in line with these standards, we recommend that he do so. Any proposed language will be carefully considered.

1 Idaho Code § 34-1809.

P.O. Box 83720, Boise, Idaho 83720-0010
Telephone: (208) 334-2400, FAX: (208) 854-8071 Located at 700 W. State Street
Joe R. Williams Building, 2nd Floor

Secretary of State Ysursa
October 24, 2008
Page 2 of 8

MATTERS OF SUBSTANTIVE IMPORT

Introduction

Entitled "The Jubilee Initiative Petition", the Initiative seeks to make gold or silver coins the only legal tender acceptable for the payment of debt within the State of Idaho. Petitioner seeks to:

1. Make "null and void" all contracts with financial institutions denominated in currencies not redeemable in gold or silver;

2. Make all fines, debts, settlements, or liens unenforceable unless denominated in gold or silver coins;

3. Make taxes payable in only gold or silver coins or in tax certificates issued by the taxing authority; and

4. Require the state legislature to establish depositories for the certification and circulation of gold and silver coins, to issue tax certificates, and create all needful rules and regulations "for orderly compliance with the Constitution."

Congress. Not The States. Determines What Is Legal Tender

Citing Article 1, § 10, of the United States Constitution, the Initiative declares that only gold and silver coin will be legal tender in Idaho.

Art. 1, § 10, of the U.S. Constitution is binding on the state of Idaho.2 It imposes limitations upon the states and provides, in relevant part:

No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder,ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility.

(Emphasis added.)

2 See McCulloch v. State of Maryland, U.S. (4 Wheat.) 316 (1819).

Secretary of State Ysursa
October 24, 2008
Page 3 of 8

Art. 1, § 10, while it prohibits states from coining money and restricts their right to make anything but gold and silver coin tender, imposes no such limitation upon Congress. The Constitution, in fact, gives Congress the sole power to decide how the moneyed transactions between citizens should be regulated. 3 Art. 1, § 8, cl. 5, of the U.S. Constitution declares that Congress shall have the power "[t]o coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures." It is this section, wrote a federal district court in the case Nixon v. Phillipoff,4 that gives Congress the exclusive ability to determine what will be legal tender throughout the country. Nixon, a pro se plaintiff, brought an action against Ph iiii poff, who had filed a mortgage foreclosure action against his property and the clerk of court who had accepted Phillipoff's filing fee, which he paid in Federal Reserve notes. One of Nixon's arguments for dismissal was that Phillipoff had violated Art. 1, §10, of the U.S. Constitution because he paid the foreclosure filing fee with Federal Reserve notes instead of "lawful money" (Le., gold and silver coin). Nixon asserted that § 10 requires a state to accept and recognize only gold and silver coin as legal tender, which is also Petitioner's position. The court stated that Nixon's interpretation of § 10 WOUld, in effect, declare Federal Reserve notes illegal, creating an inconsistency with Art. 1, § 8, cl.

5. The court observed that:

   [t]he power to coin money necessarily carries with it the power
   to declare what is money, and the constitution does not limit
   Congress to gold and silver coin. Section 8 sets forth the
   powers of Congress, while § 10 imposes a restriction on the
   states. It strains logic and constitutional interpretation to claim
   that the framers of the constitution sought to limit Congress'
   power to coin money via an implication derived from a
   restriction directed not at Congress but at the states.,,5

Congress, the court observed, has the unrestricted power to declare what is and is not legal tender or, stated another way, what a creditor must accept as payment of a debt. Art. 1, § 10, acts only to remove from states their inherent sovereign power to declare currency.6 Because Congress has declared, through federal statute, that Federal Reserve notes are legal

3 See Ogden v. Saunders, 25 U.S. 213 (1827).
4 615 F.Supp. 890 (D.C.lnd, 1985).
5 615 F.Supp 890,893.
6 lQ.

Secretary of State Ysursa
October 24,2008
Page 4 of 8

tender, states must accept them as such.7 Citing numerous federal cases that originate from the U.S. Supreme Court Legal Tender Cases of the 1800s to support its conclusion, the court concluded that Nixon's position was illogical and flew in the face of established legal precedent. 8

It was in the Legal Tender Cases that the U.S. Supreme Court explained the purpose of § 10.

The Constitution was intended to frame a government as distinguished from a league or compact, a government supreme in some particulars over States and people. It was designed to provide the same currency, having a uniform legal value in all the States. It was for this reason the power to coin money and regulate its value was conferred upon the federal government, while the same power as well as the power to emit bills of credit was withdrawn from the States. The States can no longer declare what shall be money, or regulate its value. Whatever power there is over the currency is vested in Congress. 9

(Emphasis added.)

Several years before the Legal Tender Cases were heard by the U.S. Supreme Court, the Supreme Court of the Territory of Idaho considered the issue. In the 1867 case of Haas v. Misner, the Idaho Territory Supreme Court concluded that taxes were debt within the meaning of federal law and any state law that required taxes to be paid only in gold or silver coin, or its equivalent, was null and void. 1o The court observed that state laws that contravene "either by grafting limitations on or exceptions to the provisions of an act of congress" are invalid. The court noted that:

[t]he constitutionality of the act of congress authorizing the issuance of these [Treasury] notes and making them a "legal tender in the payment of all debts, public and private," has been affirmed by too many of the tribunals of last resort in

7 See 31 U.S.C. § 5103.
8
615 F.Supp. 890, 894.
9 Idaho Op. Atty. Gen. No. 82-12 citing Legal Tender Cases, 79 U.S. (12 Wall) 457, 545 (1871). Pronouncements on legal tender reaffirmed in Legal Tender Cases, 110 U.S. 421 (1884). 10 1 Idaho 170 (1867).

Secretary of State Ysursa
October 24,2008
Page 5 of 8

many of the states of this Union to be now considered an open quest·Ion .... 11

The Haas case was followed two years later by Crutcher v. Sterling, a case in which an Idaho sheriff sued the Territorial Treasurer, claiming that, under territorial statute, he was entitled to be paid in gold from the prison 12
fund. The court disagreed, holding that the sheriff had to accept payment in legal tender notes.

Ninety-five years later, in the case Herald v. State, an Idaho plaintiff questioned whether he could lawfully pay his taxes using Federal Reserve Notes as currency.13 He argued that Art. 1, § 10, of the U.S. Constitution precluded payment in anything but gold or silver coin. Predictably, the court stated that § 10 "was intended only to limit a state's authority to create its own form of legal tender other than gold or silver." Addressing the plenary authority of Congress over currency of the United States, the court quoted the U.S. Supreme Court in the Legal Tender Cases, which said:

Congress is vested with the exclusive exercise of the analogous power of coining money and regulating the value of domestic and foreign coin, and also with the paramount power of regulating foreign and interstate commerce. Under the power to borrow money on the credit of the United States, and to issue circulating notes for the money borrowed, its power to define the quality and force of those notes as currency is as broad as the like power over a metallic currency under the power to coin money and to regulate the value thereof. Under the two powers, taken together, Congress is authorized to establish a national currency, either in coin of in paper, and to make that currency lawful money for all purposes, as regards the national government or private individuals. 14

Applying the legal authority cited above leads inexorably to the conclusion that the State of Idaho has no authority to declare what shall and shall not be legal tender in this state. That is the sole responsibility of Congress. Consequently, the declaration that only gold and silver coin shall be legal 11 1d . 12 11da ho 306 (1869). 13 107 Idaho 640,691 P.2d 1255 (Idaho App., 1984). 14 107 Idaho 640 quoting The Legal Tender Cases, 110 U.S. 421, 448 (1884).

Secretary of State Ysursa
October 24,2008
Page 6 of 8

tender is unconstitutional and should be removed from the Initiative. Since the Initiative's objectives spring from the legally flawed premise that the State of Idaho may determine legal tender, it follows that:

1. The clause that makes "null and void" all contracts with financial institutions denominated in currencies not redeemable in gold or silver should be removed. Legal tender is what must be accepted by creditors in satisfaction of all debt. Additionally, it is likely that a court would find such a provision unconstitutional on the additional ground that voiding such contracts would result in an impermissible burden upon Congress' constitutional authority to regulate commerce. 15

2. Because of Congress' peremptory authority to determine legal tender, the clause making all fines, debts, settlements, or liens unenforceable unless denominated in gold or silver coins is unconstitutional and should be removed.

3. The clause requiring taxes to be paid in legal tender is constitutional as long as it is Congress that establishes legal tender. 16 The permissibility of allowing taxes to be paid with tax certificates is difficult to determine since the term "tax certificate" is not a commonly understood term, but rather a technical one, which is undefined in the Initiative and in the Idaho Code. The use of tax certificates to pay taxes is a concept that will require fuller development so that the provision is not void for vagueness. Petitioners may consider a separate initiative dealing with payment of taxes to avoid running afoul of the Unity of Subject and Title requirement of the Idaho State Constitution. 17

4. In the Initiative's final clause directing that the State Legislature create rules and regulations "for orderly compliance with the Constitution", Petitioner should specify that it is to the U.S.
Constitution to which the word "Constitution" refers. Assuming

15 See U.S. Const. Art. 1, § 8, cl. 3.
16 See Herald v. State, 107 Idaho 640 (Idaho App., 1984), wherein the court observed that a statute requiring that property taxes be paid in lawful money of the United States did not unconstitutionally create a new form of legal tender. . 17 Idaho Const., Art. III, § 16, requires that "Every act shall embrace but one subject and matters properly connected therewith, which subject shall be expressed in the title; but if any subject shall be embraced in an act which shall not be expressed in the title, such act shall be void only as to so much thereof as shall not be embraced in the title."

" .
Secretary of State Ysursa
October 24, 2008
Page 7 of 8

that the reference is to the U.S. Constitution, Art. 1, § 10, the limitations imposed upon the states by this section require no state rule and regulation to effect compliance. The final sentence of the Initiative is therefore needless surplusage and should be struck. Moreover, it is likely that a court would find the requirement that the Legislature certify legal tender unconstitutional, given Congress's exclusive authority over the currency.

MATTERS OF FORM

The format and style of the Initiative does not conform to Idaho Statutes. It is unclear if the Initiative is to form one statute or more than one.

Petitioner should review Idaho Code § 34-1801A and use it as a guide to draft the Initiative so that it substantially follows the form prescribed by law.
This statute requires that initiatives be preceded with a "WARNING", stating that it is a felony for anyone to sign the petition with a name other than their own or to knowingly sign the petition more than once or to sign if not a qualified elector. A section entitled "INITIATIVE PETITION" should follow the "WARNING" and should include a demand by petition signers that the proposed initiative be submitted to voters at a regular general election and a certification of their residence and their status as qualified electors. The Initiative lacks these elements.

Additionally, Idaho Code § 34-1804 requires that "[e]ach signature sheet shall contain signatures of qualified electors from only one (1) county." Petitioner's signature sheets contain the signatures of persons from multiple counties.

Finally, Idaho Code § 34-1807 requires that each sheet of every petition contain a notarized affidavit from the person who circulated the petition, which states that he/she is an Idaho State resident at least 18 years old, that he/she believes that each petition signer is an elector qualified to sign the petition, and which includes the circulator's post-office address.

CERTIFICATION

I HEREBY CERTIFY that the enclosed measure has been reviewed for form, style, and matters of substantive import. The recommendations set forth above have been communicated to Petitioner via a copy of the

..,

Secretary of State Ysursa
October 24, 2008
Page 8 of 8

Certificate of Review, deposited in the U.S. Mail to James W. Stivers, 1435 Desmet Road, Desmet, ID 83824.

Sincerely,

LAWRENCE G. WASDEN
ATTORNEY GENERAL

Analysis by: Mitchell E. Toryanski Deputy Attorney General