The Counterfeiting Clause

The Congress shall have Power . . . To provide for the Punishment of counterfeiting the Securities and current Coin of the United States. . . .

—Judge Jay S. Bybee

Introduction

The counterfeiting of securities and coin presents two problems for any government. First, the knowing uttering of counterfeit money is fraud. Second, because money is a medium of exchange, counterfeiting undermines the stability of the marketplace. Gresham’s Law follows: “Bad money drives out good.” This essay examines the English common-law tradition with respect to counterfeiting, summarizes the development of the Counterfeiting Clause of the U.S. Constitution, and concludes by analyzing the Supreme Court’s precedents interpreting the clause and highlighting questions about its scope that remain unanswered.

History Before 1787

English law has punished the counterfeiting of currency at least since the fourteenth century.¹ By the time William Hawkins penned his influential treatise on English criminal law at the start of the eighteenth century, two discrete crimes concerning counterfeiting had emerged.² First, the uttering of counterfeit money was a form of theft.³ Second, the act of making counterfeit money was a crime against the Crown and punishable as treason.⁴ Men guilty of this latter offense would be drawn (tied to a horse and dragged to the execution site) and hanged; women would be drawn and burned alive.⁵ The severity of these punishments was understood at the time. Sir William Blackstone advocated treating counterfeiters less harshly than other high treasonists, asserting that “affixing the same ideas of guilt upon the man who coins a leaden groat and him who assassinates his sovereign, takes off from that horror which ought to attend the very mention of the crime of high treason, and makes it more familiar to the subject.”⁶

Across the Atlantic, the new American colonies started to issue their own currency in the late seventeenth century.⁷ This currency took the form of bills of credit to finance the public fisc. However, colonial control of these fledgling funds was loose: A scholar observed that “at various times, the [pre-revolutionary] economy was close to operating on a barter basis.”⁸ During the Revolution, the states expanded their issuance of paper currency to finance the war effort. The British responded by counterfeiting American bank notes to depreciate their value and starve America’s war machine.⁹ This tactic proved devastatingly effective: $40 million worth of currency was replaced, rendering American money “worthless” by 1781.¹⁰

The states, still reeling from their wartime experiences, granted the Continental Congress power to regulate the “value of coin struck by” the United States and by each individual state.¹¹ However, the Articles did not grant Congress the power to punish counterfeiting.¹² As a consequence, when the Continental Congress asked the states to do so themselves, these requests were met with uneven results.¹³ The failure of the Articles of Confederation to address counterfeiting would thus become a topic of discussion at the Constitutional Convention.

The Constitutional Convention

In May 1787, delegates from the various states gathered to discuss solutions to the shortcomings of the Confederation. On May 29, Charles Pinckney of South Carolina offered a plan for a federal Constitution.¹⁴ One provision would have given Congress the power “[t]o declare the law and Punishment of piracies and felonies at sea & of counterfeiting Coin & of all offences against the Laws of Nations.”¹⁵

On August 17, Gouverneur Morris of Pennsylvania, evidently agreeing with Pinckney that Congress should have the authority to punish counterfeiting, raised the prospect of “extend[ing] th[is] authority.”¹⁶ Pinckney’s proposal centered on “Coin,” but Morris observed that counterfeiting might extend to other forms of currency (such as “[b]ills of exchange”), which “might be forged in one state and carried into another.”¹⁷ He therefore advocated for a legislative power to “punish[] . . . counterfeiting in general” but did not sketch its contours.¹⁸

“[O]ther members” who were unnamed in the Convention report voiced worries that the counterfeiting of “foreign paper” by Americans might undermine the young nation’s relations with other countries.¹⁹ Consistent with Morris’s broad conception of national power in this arena, they therefore suggested vesting the national legislature with authority to punish the counterfeiting of foreign currency as well.

In the end, the Framers left the matter to the Committee of Style, which separated the power to punish counterfeiting from the piracy and “Laws of Nations” provisions found in Pinckney’s original proposal.²⁰ The Counterfeiting Clause was instead slotted between Congress’s coinage and postal powers.²¹ This relocation occurred with little fanfare, counterfeiting having been an ancillary part of discussions focused more on the reach of the legislative powers to “declare,” “define,” and “punish” various enumerated crimes.²² In keeping with Morris’s view that counterfeiting may come in multiple forms, the final draft of the clause extended to both securities and coins.

However, the Counterfeiting Clause also came with certain limitations. First, it specified that congressional power reached only securities and coins “of the United States.”²³ It thus did not give Congress power to punish the counterfeiting of other, nongovernmental securities—a concern raised at the Convention. Second, the clause extended only to “current Coin of the United States,”²⁴ which would not include the Spanish dollars, German thalers, or British pounds that had circulated during the colonial period.²⁵ Third, the clause authorized Congress to punish “counterfeiting” but did not make clear whether “counterfeiting” meant only the act of producing counterfeit money or included the passing of counterfeits as well. Fourth—and reminiscent of Blackstone’s reservations—counterfeiting was not to be punished as treason under the new Constitution. That category of crimes would be limited to “levying War against [the United States], or in adhering to [its] Enemies, giving them Aid and Comfort.”²⁶

The Ratification Debates

In post-Convention debates, counterfeiting was a relatively minor issue, but it did reflect larger differences of opinion concerning the relationship between the states and the national government. In Federalist No. 42, James Madison highlighted the need for the United States to protect the integrity of its markets. He argued that the Counterfeiting Clause would “secure the value” of coinage in the United States and that the Federal Money and Counterfeiting Clauses together “supplied a material omission in the articles of confederation.”

Anti-Federalists focused on counterfeiting as a common form of commercial fraud. Brutus, for example, wrote that “[p]rotection and defence” against ordinary criminals—“the murderer, the robber, the thief, the cheat, and the unjust person”—were properly “derived from the respective state governments.”²⁷ An Old Whig took issue not with the enumerated powers of Congress—including that of “punish[ing] counterfeiters”—but with the “undefined, unbounded and immense power” contained in the Necessary and Proper Clause.²⁸ Similarly, Federal Farmer worried not about the national authority to punish counterfeiters per se, but about the prospect of litigants “drag[ging] each other many hundred miles into the federal courts.”²⁹ Perhaps in light of our experiences during the Revolutionary War and Articles of Confederation eras, serious disputes over the propriety of some national authority over counterfeiting do not appear to have emerged.

Early Practice

The First Congress exercised its power over counterfeiting in An Act for the Punishment of Certain Crimes Against the United States.³⁰ Both counterfeiting a government security and passing the counterfeit became capital crimes under the act.³¹ However, this early statute did not address the counterfeiting of “current Coin of the United States.” Congress would not create a mint until two years later.³²

Following the establishment of a national mint, in 1806, Congress extended the prohibition to counterfeit coins.³³ Curiously, this statute also applied to foreign coins even though the Counterfeiting Clause concerned only the “current Coin of the United States.” Congress also specified that the law would not “deprive the courts of the individual states of jurisdiction, under the laws of the several states, over offences made punishable by this act.”³⁴ By doing so, Congress intimated an understanding that the Constitution does not give it the exclusive power to prohibit counterfeiting. However, this accommodative view of state power with respect to counterfeiting would not prove to be universal. Two decades later, Justice Joseph Story took a position contrary to early state court decisions.³⁵ He suggested that the power to punish counterfeiting of federal coins and securities might “be exclusive of that of the states” because it “naturally flow[s] . . . from the antecedent powers to borrow money[] and regulate the coinage.”³⁶

Judicial Precedent

In 1847, the U.S. Supreme Court held that states have the concurrent power to punish at least the passing of counterfeit federal money. In Fox v. Ohio (1847), the Court upheld the state conviction of an Ohio man for passing counterfeit U.S. coins, thereby recognizing the states’ concurrent authority.³⁷ Finding the passing of counterfeit money to be “a private cheat effected by means of a base dollar,” the Court held that the offense was “peculiarly and appropriately within [a state’s] functions and duties.”³⁸

Subsequently, the Court has held that Congress has the power to punish the counterfeiting and passing of foreign coin, based on a combination of four other constitutional provisions: the Federal Money Clause, the Foreign Commerce Clause, the Necessary and Proper Clause, and the federal government’s foreign affairs powers.³⁹ The Court also broadly approved of Congress’s “suppressing and preventing the making and use of illegitimate coin.”⁴⁰ It has been silent, however, as to the reach of state power in these areas.

Open Questions

• Much of the early debate around counterfeiting concerned what specific currencies Congress could reach. These questions have largely been answered; the current counterfeiting and forgery provisions are located in 18 U.S.C. §§ 470–514 and address both the making and uttering of counterfeit coins and documents. However, at least one question remains concerning the traditional relationship between federal and state power over counterfeiting: Can states punish the manufacture of counterfeit U.S. coins and securities, or does that power, which is distinct from the power to punish the passing of counterfeit money, belong exclusively to Congress?⁴¹ Currently, many states prohibit both the manufacture and the passing of counterfeit U.S. money. Congress surely could preempt such state laws, but whether the Constitution implicitly does so with respect to U.S. securities and “current Coin” remains to be seen.
• Additionally, questions may arise in the future around the counterfeiting of cryptocurrencies, but those questions will not involve Congress’s authority under the Counterfeiting Clause unless such currencies become “Securities or current Coin of the United States.”

1. J.G. Bellamy, The Law of Treason in England in the Later Middle Ages 15 (D.E.C. Yale ed. 1970). ↩︎
2. 1 William Hawkins, A Treatise of the Pleas of the Crown §§ 55–56 (4th ed. 1762). ↩︎
3. Id. § 56. ↩︎
4. Id. § 55; 4 Select Cases in the Court of King’s Bench Under Edward II 102 (G.O. Sayles ed., 1955); Bellamy, supra at 15, 207. ↩︎
5. 4 Blackstone 92–93. ↩︎
6. Id. at 89. ↩︎
7. Claire Priest, Currency Policies and Legal Development in Colonial New England, 110 Yale L.J. 1303, 1311 (2001). ↩︎
8. Id. ↩︎
9. Lynn Glaser, Counterfeiting in America: The History of an American Way to Wealth 37 (1960); Stephen Mihm, A Nation of Counterfeiters: Capitalists, Con Men, and the Making of the United States 34 (2007); Kenneth Scott, Counterfeiting in Colonial America 3–4 (1957). ↩︎
10. Ralph E. McKinney, Jr., et al., The Evolution of Financial Instruments and the Legal Protection Against Counterfeiting: A Look at Coin, Paper, and Virtual Currencies, 2015 U. Ill. J.L. Tech. & Pol’y 273, 300 (2015). ↩︎
11. Articles of Confederation, art. IX, §§ 4, 6. ↩︎
12. Id. ↩︎
13. Adam H. Kurland, First Principles of American Federalism and the Nature of Federal Criminal Jurisdiction, 45 Emory L.J. 1, 24, 39–41 (1996). ↩︎
14. 3 Farrand’s at 595. ↩︎
15. Id. at 598. ↩︎
16. 2 Farrand’s 315. ↩︎
17. Id. ↩︎
18. Id. ↩︎
19. Id. ↩︎
20. Id. at 595. ↩︎
21. Art. I, § 8, cls. 5–7. ↩︎
22. Sarah H. Cleveland & William S. Dodge, Defining and Punishing Offenses Under Treaties, 124 Yale L.J. 2202, 2225 (2015); 2 Farrand’s 314–19. ↩︎
23. Art. I, § 8, cl. 6. ↩︎
24. Id. ↩︎
25. Stephanie Meredith, The History of U.S. Circulating Coins, U.S. Mint (May 8, 2025), https://perma.cc/PB26-Y5G6. ↩︎
26. Art. III, § 3, cl. 1. ↩︎
27. Storing 2.9.86. ↩︎
28. Storing 3.3.12. ↩︎
29. Storing 2.8.41. ↩︎
30. 1 Stat. 112 (1790). ↩︎
31. Id. at ch. 9, § 14, 1 Stat. at 115. ↩︎
32. David P. Currie, The Constitution in Congress: The Federalist Period, 1789–1801, at 96 & n.324 (1997). ↩︎
33. An Act for the Punishment of Counterfeiting the Current Coin of the United States, ch. 50, §§ 1–2, 1 Stat. 404, 404–05 (1806). ↩︎
34. Id. at ch. 50, § 4, 1 Stat. at 405. ↩︎
35. State v. Tutt, 18 S.C. Eq. (2 Bail. Eq.) 44, 46 (S.C. 1831); State v. Antonio, 7 S.C.L. (2 Tread.) 776 (S.C. 1816); State v. Randall, 2 Aik. 89 (Vt. 1827). ↩︎
36. 3 Story’s Commentaries § 1118. ↩︎
37. 46 U.S. (5 How.) 410, 435 (1847). ↩︎
38. Id. at 434. ↩︎
39. United States v. Arjona, 120 U.S. 479, 483 (1887); United States v. Marigold, 50 U.S. (9 How.) 560, 566, 568 (1850). ↩︎
40. Baender v. Barnett, 255 U.S. 224, 227 (1921). ↩︎
41. Kurland, supra at 28 n.90, 39 n.129. ↩︎