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 took no position on the policy underlying the initiative, only on its legal viability.
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. 31 U.S.C. § 5103 provides: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."
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 decision long predates Idaho statehood (1890), but it tracks the modern Supremacy Clause analysis: states cannot displace federal authority over currency.
Did this initiative make the ballot?
The Certificate of Review only addresses legal form. Whether the petitioner gathered enough signatures and the measure made the 2009 or 2010 ballot, or was abandoned, would need to be confirmed against Idaho election records.
Is this related to "sound money" or other monetary-reform movements?
It is part of a recurring strand of monetary-reform initiatives that arose around the late-2000s financial crisis. Several states considered similar gold-and-silver legal-tender bills around that period, with similar outcomes. The constitutional preemption answer has been consistent for over 150 years.
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 vests Congress with the power to coin money and regulate its value, and the U.S. Supreme Court in Ogden v. Saunders (1827) and the Legal Tender Cases (1871, 1884) interpreted that power as exclusive. Article I, § 10 imposes restrictions on the states (no coining money, no emitting bills of credit, no making anything but gold and silver coin tender) but does not affirmatively grant states authority to refuse federal 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 Supremacy Clause (Article VI) and the McCulloch v. Maryland (1819) framework apply: state law that conflicts with valid federal law is "without effect."
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: McCulloch v. State of Maryland, 17 U.S. (4 Wheat.) 316 (1819); 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.
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:
- Make "null and void" all contracts with financial institutions denominated in currencies not redeemable in gold or silver;
- Make all fines, debts, settlements, or liens unenforceable unless denominated in gold or silver coins;
- Make taxes payable in only gold or silver coins or in tax certificates issued by the taxing authority; and
- 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. 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.
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. 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, 615 F.Supp. 890 (D.C.Ind, 1985), that gives Congress the exclusive ability to determine what will be legal tender throughout the country.
The court stated:
[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.
Congress 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. Because Congress has declared, through federal statute, that Federal Reserve notes are legal tender, states must accept them as such. See 31 U.S.C. § 5103.
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.
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. 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.