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Robert Kientz
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I am an investor and author who has owned and managed real estate, precious metals, stocks, and bond investments.
  • Legislation Being Introduced in State Houses Proposes Gold and Silver as Money 0 comments
    Jan 12, 2011 12:47 PM
    As the weakening of fiat currencies continue unabated through the destructive forces of money supply inflation, several US States have proposals for bills to begin looking at gold and silver as currency for settlement of state related transactions.

    Virginia announced yesterday that the state would commission a study of alternative currencies including gold and silver in House Joint Resolution No. 557. A selected quote from Resolution 557:
    WHEREAS, the Supreme Court of the United States in Lane County v. Oregon, 74 U.S. (7 Wallace) 71, 76-78 (1869), and Hagar v. Reclamation District No. 108, 111 U.S. 701, 706 (1884), has ruled that the States may adopt whatever currency they desire for the purposes of performing their sovereign governmental functions, even to the extent of adopting gold and silver coin for those purposes while
    refusing to employ a currency not redeemable in gold or silver coin that Congress has designated "legal tender";

     
    The Resolution is worthwhile to read as it highlights a litany of legislation and Constitutional references that frame the currency discussion.

    Utah also announced in December that a bill may be introduced requiring state agencies accept gold and creating a interstate monetary policy tied to the price of gold. The legislation, if introduced and passed, would allow Utah citizens to mint their own gold and silver, and for a state militia to secure the state stockpile.

    A Georgian bill, entitled the Constitutional Tender Act was introduced, The bill begins:

    The General Assembly finds and declares that sound, constitutionally based money is essential to the livelihood of the people of this state and the stability and growth of the economy of this state and region and vitally affects the public interest. The General Assembly further finds that Article I, Section 10 of the United States Constitution provides that no state shall "make any Thing but gold and silver Coin a Tender in Payment of Debts.
    The bill proposes that banks offer gold and silver coins and accept them as deposits in segregated accounts, state debt payments be made only in gold and silver coin, and state payments will be made in gold and silver. Paper money can be used in state transactions but only upon the consensent of both parties. In addition, all obligations to and from the state would be converted from US Dollars to equivalent gold and silver based upon prevailing market prices. And the bill lastly proposes that checks drawn from gold and silver denominated accounts be honored as payment in gold and silver.

    Indiana's 2009 bill includes provisions for using electronic gold-based accounts, which have been in use for several years from several companies. It provides that those transacting with the state would have a timely choice of accepting gold electronic payments in lieu of US dollars. The Indiana bill also recognizes Canadian Maple Leafs, in addition to pre-1965 silver currency and American gold and silver Eagles, as acceptable coins.

    Indiana’s bill was introduced on the heels of a 2005 bill in New Hampshire which also recognized several other coin issues as acceptable and included provisions for electronic gold currency.

    A bill was proposed in the State of Montana regarding federal encroachment into states' rights including currency and use of Executive Orders.
    A South Carolina bill introduced in 2009-2010 session advocated a return to gold and silver as legal tender. From the bill:
    The South Carolina General Assembly finds and declares that the State is experiencing an economic crisis of severe magnitude caused in large part by the unconstitutional substitution of Federal Reserve Notes for silver and gold coin as legal tender in this State. The General Assembly also finds and declares that immediate exercise of the power of the State of South Carolina reserved under Article I, Section 10, Paragraph 1 of the United States Constitution and by the Tenth Amendment, is necessary to protect the safety, health and welfare of the people of this State, by guaranteeing to them a constitutional and economically sound monetary system.
     

    A 2009 Washington State House Memorial addressed to President Obama and the US Senate and House called for the eventual dissolution of the Federal Reserve and acceptance of gold and silver as money. This bill points out that the dollar was to be a silver coin and not a paper issue.
    WHEREAS, The U.S. Constitution designated the "dollar" as the standard of value (U.S. Constitution, Article I, Section 9, Clause 1and the Bill of Rights, the Seventh Amendment), which was acknowledged in the federal Mint Act of 1792 to be a silver coin containing 371.25 grains (troy) of pure silver;
     

    The Memorial goes on to note the 89% destruction in value of the paper dollar in 2009 through the Federal Reserve policies.

    Missouri HB 561, proposed on 8/28/2009, advocates the use of gold and gold electronic currency in the payment of state taxes fees, fines, and other obligations; labor compensation, payment of principal and interest on loans, and resolution of court judgments.

    Colorado HB09-12-06 aka Colorado Honest Money act also proposes the use of gold and gold electronic currency for payment of state obligations.

    Idaho House Bill 622 in 2010 through the Ways and Means Committee proposes use of gold and silver as currency.

    Being an informed citizen includes understanding the history of money in the United States, the intent of the forefathers in establishing various laws and responsibilities to the States, and the subsequent rulings by courts on interpreting and applying those laws. The introduction of legislation to several states for the purpose of studying alternative currencies represents the will of people to exercise of state's rights in an era of increasingly invasive federal government intruding in their lives. This could signal the beginning of a landmark era in American history if state governments begin to exercise their Constitutional rights to enforce fair and honest money.

    For those interested in following developments of state legislation relating to gold and silver, you can track progress at Constitutional Tender.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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