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decided that the question relating to final payment in private contracts is one of
<br />exclusively of federal jurisdiction and vested in congress. The legal tender and
<br />gold contract decisions, taken in connection with the recent case of Woodruff v.
<br />State of Mississippi, 162 U.S. 291, 16 S.Ct. 820, aze controlling here," I
<br />1.4 This requirement that states deal only in gold and silver is designed to prevent
<br />the nation's money system from losing its intrinsic value to become rather' a money
<br />supply the value of which is determined solely by the credit of a national bank. These
<br />Federal Reserve Publications do much to explain the process of money creation sought to
<br />be averted by the Framers who have so constrained the states.
<br />Modefn Monev Mechanics: Page 3, Second Column, Paragraph 1:
<br />"Who Creates Money? ...The actual process of money creation takes
<br />place primazily in banks ...checkable liabilities of banks aze money. These
<br />liabilities aze customers' accounts. They increase when customers deposit
<br />currency and checks and when the proceeds of loans made by the'~banks are
<br />credited to borrowers' accounts ...Then, bankers discovered that they could
<br />make loans merely by giving their promises to pay, or bank notes, to borrowers.
<br />In this way, banks began to create money. Transaction deposits aze the modern
<br />counterpart of bank notes." 2
<br />~ See Dennrs v. Moses, 18 Waslt. 537, 548-550, 555, 600, 601 (1898). See also Fogxe[ v. Hoadley, 3 Coitn.
<br />534, 536 (""Money" does not include treasury notes."); Block v. State, 41 Tex. 620, 622 ("In legal
<br />acceptation, "money" means current metallic coins; therefore an indictment for embezzling "money" is trot
<br />sustainable by proof of embezzling greenbacks or national currency notes."); Dotvdle v. Corpe+ting, 32
<br />N.C. 58, 60 ("The [enn "money" does not include bank notes, They pass as cash, and constitute a part of
<br />the circulating medium, and for many purposes are to be considered as money; but, in the strict sense of the
<br />term, they are not included therein."); Johnson v. State, I I Ohio St. 324, 325 ("Money," as used tit Crimes
<br />Act, section 13, providing that any person stealing any money, the property of another, shall be guilty of
<br />larceny, cannot be construed to include bank bills, for strictly bank bills are not money, though for many
<br />purposes they are treated as such."); Hale v. Stale, 8 Tex, 171, 172 ("The term "money" does not include
<br />bank notes. Hence an indictment under a statute making it an offense to play at games, etc, fm' money-the
<br />indictment charging that the defendant. played at a game of taro for money-cannot be sustained by proof
<br />Iha[ bank notes were bet, nor would such an indictment be sustained by proof that property .vas be[.");
<br />Wi!limns v. Stare, 20 Miss. (12 Smedes & MJ 58, 63 ("Money" as used in an indictment charging [he
<br />betting of money, does not include United States treasury notes, such notes not being money in the legal
<br />acceptation."); Tt+rner v. State, I Ohio St. 422, 426 ("The term "money," in the statute defining robbery as
<br />taking from the person of another any money or personal property of any value whatsoever, with Force and
<br />by violence, and with intent to steal or rob, does not include bank notes."); Fi/go v. Penny, 6 N.C. 182, 183
<br />("The term "money" does not include a bank note. Such a note does not differ in its nature from any other
<br />promissory note payable to bearer."); State v. Hoke, 84 Ind. 137, 139 (citing Boyd v: Olvey, 82 Ind. 294;
<br />Hnmi/ton v. Stare, 60 Ind. 193, 28 Am. Rep. 653) ("It is not accurate to call currency in the shape of bills or
<br />notes "money', for in [he true sense they are not "money."); ./udah v. Hnrrrs, (N.Y.) 19 Johns. 144, 14S
<br />("The word "money" may be extended to bank notes, when [hey are known and approved of. and used in
<br />[he market as cash."): Missouri Revised Statutes 1899, § 9123 ("The [enn "money" or "moneys;' where-
<br />ever used in the chapter relating to the revenue, shall be held to mean gold, silver, or other coin, other
<br />currency. used in barter and trade as money.").
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