Constitutional Tender’ movement growing
States consider making gold, silver legal tender
A “Constitutional Tender” movement is picking up steam in several states — most notably Utah but also in other states — as supporters seek a return to the United States Constitution’s provisions in Article I, Section 10 that “No State shall … make any Thing but gold and silver Coin a Tender in Payment of Debts.”
Utah’s Senate voted 21 to 4 on March 9 to give preliminary approval to a bill that would recognize gold and silver coins issued by the federal government as legal tender for their precious metal value — not just their face value — in Utah.
The legislation also would exempt the exchange of gold and silver coins from certain types of state tax liability such as state sales, income and capital-gains taxes, and calls for a committee to study and recommend alternative forms of legal tender currency for Utah.
House Bill 317, was introduced in Utah’s House of Representatives by Rep. Brad J. Galvez, R-West Haven, and passed the House on March 4 by a 47-26 vote.
Utah’s Senate must vote once more on the measure for final approval.
The bill does not compel a person to tender or accept gold or silver coins and provides that the exchange of gold and silver coins for another form of legal tender does not create any individual income or sales tax liability.
Under the legislation, a person would be able to value a 90 percent silver 1964 Kennedy half dollar, for example, at the current price of silver, not just at its 50-cent face value.
Several Utah legislators have used the example that a 1964 Kennedy silver half dollar would have purchased three gallons of gasoline in 1964 when its silver value and face value were comparable. Today, while the face value is still 50 cents, its silver value would buy four to five gallons of gas.
The legislation requires Utah’s Revenue and Taxation Interim Committee to study the establishing of an alternative form of legal tender, to recommend whether an alternative form of legal tender should be established and to prepare any recommended legislation for Utah’s 2012 legislative session.
A fiscal note attached to the bill estimates that the added costs to the state would be the loss of potentially $250,000 in fiscal year 2012 and $550,000 in fiscal 2013 depending on the amount of capital gains that would have been claimed by persons exchanging gold or silver coins.
Gaining momentum in Georgia
On March 8, a hearing was held in the Georgia House Financial Institutions and Services Subcommittee on House Bill 3, a “Constitutional Tender Act,” which would change Georgia’s Code to allow banks and lending institutions in Georgia to offer gold and silver coins minted by the United States and to accept them for deposit from customers.
The legislation would require banks and lending institutions to offer accounts denominated in four separate categories: Federal Reserve Accounting Unit Dollar (the legislation’s term for Federal Reserve notes) accounts, pre-1965 silver coin accounts, American Eagle silver bullion coin accounts and American Eagle gold bullion coin accounts.
Under the legislation, Georgia’s residents could still use U.S. dollars as long as both parties agree.
Like many of the pieces of legislation calling for alternative currencies, the bill references the United States Constitution, stating, “The General Assembly finds that, as mandated by Article I, Section 10 of the United States Constitution, the state shall not ‘make any Thing but gold and silver Coin a Tender in Payment of Debts.’ Federal Reserve Accounting Unit Dollars, having no redeeming value in gold or silver coin, shall not be made a tender in payment of debts by the state.”
A Constitutional Tender Act was also introduced in Georgia’s legislature in 2009 and although a hearing was held, the bill did not become law.
A resolution in New Hampshire
House Concurrent Resolution 13, introduced on Jan. 6 in New Hampshire, urges Congress to pass legislation to protect citizens against potential losses in value to the nation’s money supply due to actions taken by the Federal Reserve to increase the money supply. The New Hampshire legislation also seeks the restoration of gold and silver money, and requests that the Federal Reserve System be phased out entirely ultimately.
The legislation was due out of its committee, State-Federal Relations and Veterans Affairs, on March 10, and was scheduled for a vote on March 15. The last hearing on the bill was on Feb. 24, where the majority report suggested that it pass with amendments.
The proposed resolution looks at the issue from a historical perspective, noting that the nation’s “Founding Fathers were very familiar with the disastrous consequences, such as sharp price increases and the loss of wealth by most citizens, experienced by those colonies that had issued paper money not backed by gold or silver.”
The resolution then cites the nation’s increasing money supply as an indicator that “we can expect unprecedented rounds of price increases and economic dislocations in the future, leading to unprecedented losses of the value of take-home pay, retirement income, insurance policies, and investments by most citizens, and possibly ultimate economic chaos.”
Congress is not required to act on resolutions passed by state governments.
Other states’ proposals
In addition to Utah, New Hampshire and Georgia, several other states are considering expanding the usage of gold and silver for transactions as an alternate currency.
In South Carolina, a joint resolution, Senate Resolution 500, was introduced Feb. 3. It seeks to establish a joint subcommittee to study whether South Carolina should adopt a currency to serve as an alternative to the currency distributed by the Federal Reserve System in the event of a breakdown of the Fed. The measure has been referred to the state Senate’s committee on finance.
In Montana, House Bill 513 was introduced Feb. 12, and while a hearing scheduled for Feb. 16 was canceled, it awaits rescheduling for a hearing in the First House Committee.
Montana’s bill goes beyond many state legislative efforts by requiring the state’s Board of Investments to invest 10 percent of the assets of the Teacher’s Retirement System in gold and silver coins.
In Tennessee, Senate Joint Resolution 98 was introduced Feb. 22 and has been referred to the Delayed Bills Committee. It seeks to create a special joint committee to study whether Tennessee should adopt a currency to serve as an alternative to the Federal Reserve’s dollar in the event of a breakdown.
The Tennessee resolution states, “Many widely recognized experts predict the inevitable destruction of the Federal Reserve System’s currency through hyperinflation in the foreseeable future.”
In Virginia, House Joint Resolution No. 557 was offered Jan. 12. It too seeks the creation of a joint subcommittee to determine whether Virginia should adopt a currency as an alternative to the U.S. dollar in the event of a breakdown of the Federal Reserve System. On Jan. 27 the House subcommittee recommended no action by voice vote and the bill was left in the House’s Committee on Rules on Feb. 8.
Legislation in 2009 and 2010
Unsuccessful legislation was introduced in the Missouri House of Representatives in 2009 calling for the use of electronic gold currency by Missouri and its political subdivisions.
In Colorado, House Bill 09-1206, the “Colorado Honest Money Act,” was introduced in 2009 calling for the state to create an electronic currency backed by reserves of precious metals.
Colorado’s legislation defines “electronic gold currency” as a specifically defined amount of gold, measured in an electronic gold currency unit that an electronic gold currency payment provider makes available to its customers as a medium of exchange. It was assigned to the State, Veterans and Military Affairs Committee and did not become law.
In Idaho, House Bill No. 662 was introduced in 2010 to restore “constitutionally valid tender” in Idaho by restoring silver and gold as an alternative to Federal Reserve currency.
The Statement of Purpose accompanying the Idaho bill provides a good summary of the logic behind many of these bills, stating: “The Act preserves the individual’s freedom of choice to continue with Federal Reserve Notes, or adopt Idaho Constitutional Tender. The current system exposes Idaho and her citizens, inhabitants, and businesses to the chronic depreciation of a media exchange other than gold and silver, which loses purchasing power resulting in the incremental confiscation of their property by way of inflation without just compensation, in violation of Article 1, Section 10, Clause 1 of the Constitution of the United States, and the due process clause of the Fifth Amendment thereto.”
In Indiana, Senate Bill 0453 was introduced in 2009 to require the state to designate one or more electronic gold currency payment providers to be a payment provider for monetary transactions through gold and silver currency accounts. It was referred to the state’s Committee on Tax and Fiscal Policy where it stayed and it did not become law.
In the state of Washington, House Joint Memorial 4010 was introduced in 2009 and 2010, requesting that President Barack Obama support legislation to protect Americans from unprecedented losses in the value of take-home pay, retirement income, insurance policies and investments as a result of the Federal Reserve’s ongoing inflation of paper money, unbacked by silver and gold.
Several online resources are available — http://constitutionaltender.blogspot.com/ and www.constitutionaltender.com/ — for people interested in the Constitutional Tender movement.
The latter Web site provides a state bill template that interested persons can use to send to their state legislatures, requesting that they amend current law to require the exclusive use of gold and silver coin as tender in payment of debts by or to the state. ■
By Steve Roach
SOURCE http://www.coinworld.com
Labels: ECONOMY
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