The Legal Tender Cases, also known as Knox v. Lee, was a landmark Supreme Court case that addressed the constitutionality of the Legal Tender Act of 1862. The Act allowed the federal government to issue paper money, known as "greenbacks," as legal tender for the payment of debts. The Act was challenged by two Virginia merchants, John Knox and William Lee, who argued that the Act was unconstitutional because it violated the Contract Clause of the Constitution, which prohibits the government from impairing the obligation of contracts. The Supreme Court ultimately upheld the constitutionality of the Act in a 5-4 decision. The majority opinion, written by Chief Justice Salmon P. Chase, held that the Act was a valid exercise of Congress' power to issue currency and regulate the value of money. The Court also held that the Act did not violate the Contract Clause because it did not impair the obligation of contracts, but merely provided an alternative form of payment. The decision in the Legal Tender Cases was a major victory for the federal government and established the principle that Congress has the power to issue paper money as legal tender. The decision also established the principle that Congress can regulate the value of money, a power that has been used to great effect in the years since.

In the Legal Tender Cases (Knox v. Lee), the Supreme Court was asked to decide whether Congress had the power to issue paper money, known as legal tender notes, in order to pay off public debt during a time of financial crisis. The majority opinion held that Congress did have this power under its constitutional authority over fiscal and monetary policy. However, Justice Field dissented from this decision on two grounds: firstly, he argued that issuing legal tender notes constituted an unconstitutional taking of property without just compensation; secondly, he argued that it violated states’ rights by allowing federal law to supersede state laws regarding contracts and debts. In his dissent Justice Field wrote “The Constitution does not confer upon Congress any such powers [to issue legal tender], nor has any such authority been fairly deducible from its provisions." He concluded by stating "I am constrained therefore...to declare my conviction that these acts are unauthorized by the Constitution of the United States and violate both its letter and spirit."