Posted on 03/06/2011 1:34:02 PM PST by Tolerance Sucks Rocks
Utah took its first step Friday toward bringing back the gold standard when the state House passed a bill that would recognize gold and silver coins issued by the federal government as legal currency.
The House voted 47-26 in favor of the legislation that would also exempt the sale of gold from the state capital gains tax and calls for a committee to study alternative currencies for the state.
The legislation now heads to the state Senate, where a vote is expected next week.
Under the bill, the coins would not replace the current paper currency but would be used and accepted voluntarily as an alternative.
If the bill passes, Utah would become the first of 13 states that have proposed similar measures. The others states are Colorado, Georgia, Montana, Missouri, Indiana, Iowa, New Hampshire, Oklahoma, South Carolina, Tennessee, Vermont and Washington.
Backers of Utah's bill say they want to send a message to the rest of the country.
"People sense that in the era of quantitative easing and zero interest rates, something has gone haywire with our monetary policy," said Jeffrey Bell, policy director for the Washington-based American Principles in Action, which helped shape the bill.
"If one state recognizes gold as a valid currency, I think it would embolden people not just in other states but in Washington," he said.
The U.S. used the gold standard from 1873 until 1933, when President Franklin D. Roosevelt outlawed the private ownership of gold amid the Great Depression. President Richard Nixon abandoned the gold standard altogether when he announced in 1971 that the U.S. would no longer convert dollars to gold at a fixed value.
(Excerpt) Read more at foxnews.com ...
The states dictate to the feds not the otherway around!
How can Utah be the “first of 13 states” when 12 other states have already proposed similar laws?
And what’s the big deal. It has to be minted by the federal government. That means any silver or gold coin from any other nation or from an private mint won’t qualify.
That’s what I figured. Then there was a SCOTUS case where I think they determined that if the bank wants to accept a note, that’s fine.
My guess would be they are trying to say that if it passes the Utah Senate then Utah would be the first state to have a bill pass both House and Senate. I'm working on the assumption that "proposed" means something less than that.
Lately I've been trying to understand how States are able to issue bonds. While a bond has a maturity date, in "all" the other important ways (represents a promise of value, can be traded for other items, has a relatively inelastic value, etc) there doesn't seem to be much difference between bonds and reserve notes.
Suppose you could get a guy to sell you a new car for $400, as long as you paid in US gold coins. A $20 gold piece is worth about $1500 today. $400 dollars worth could get you a car worth $30,000 in paper money.
So, if you pay just "$400" for the car, do you pay tax and licensing on that amount, and does the guy who sold you a $30,000 car for "$400" get a $29,600 tax write-off on the loss?
I suspect that this is not legal, but it seems strange that the US government puts $1500 worth of value into a $20 legal tender coin.
>Currency is not my strong suit, but I’m just wondering...if I go to a store to buy something, and I can either trade my physical gold, or my federal reserve note representing the same nominal value, why on earth would I part with my gold?<
No current notes are backed by gold anymore. haven’t been for a very long time. The government recalled them many years ago.
Then they went to silver. These too were recalled.
The notes we now have are a fiat currency.
By the end of the year, if things continue to go as they are with the IMF stating the dollar is no longer viable as a world currency. China is pushing the yen as the new global currency very hard. (They now only sell in trade of you use the yen as of last week on many things). They believe that by the end of 2011 it will replace the dollar as the global currency.
If that happens .. you would be saving money wiping your bum with $50.00 bills as it will be less expensive than a roll of toilet paper.
...Other than gold or silver.
If you care to read the debates, they clearly were horrified by paper money. And since the states held sovereign rights and created this monstrosity we call the Federal Government, the rights were reserved to the STATES and NOT the federal government.
Now having made that clear, they put in the No state shall coin money which meant worthless currency. Then, they made it so only Congress can set the value thereof. Why? Because to make commerce regular throughout the union..which meant the value of each states currency would be the same all over the union. The federal standard for currency only became in effect totally during the civil war, why? Because the north had to pay for the war.
Oh My GAWD!
Go read the ratification debates.
States can coin their own currency as long as it is backed by gold and silver. But, Only Congress sets the value. Why? To make commerce regular..or to regulate commerce. How do you make it regular? You set the value so each states currency is equal in value throughout the union.
All they have to do is pass a currency law.
So what would happen if they did that? You’d find that each state would NOT be held liable for another states debt since each state coined their own currency.
Think we could do this in Texas?
People can refuse you service, they can refuse to sell you something right now if they want.
You are right though, it would get to a point where a wheelbarrow full of notes would not be worth anything.
Don't know. I doubt that it's a high priority on our legislature's list of things to do this session.
If the US dollar falls through the floor, it'll happen by default - everywhere.
Exactly. And make sure though you have enough of your money in paper, because if just in the computer, when everyone tries to get paper, it’ll run out real quick.
I believe this is why so many people will jump to cashless society if things do crash.
Read the abridged version of the passage you just quoted:
“No State shall....coin Money...”
Per the Constitution, the states cannot coin their own money.
Bancroft’s History of the formation of the Constitution of the United States, vol. 2, p. 134.
And when the convention came to the prohibition upon the states, the historian says that the clause “No state shall make anything but gold and silver a tender in payment of debts” was accepted without a dissentient state. “So the adoption of the Constitution,” he adds,
“is to be the end forever of paper money, whether issued by the several states or by the United States, if the Constitution shall be rightly interpreted and honestly obeyed.”
Id., 137.
For nearly three-quarters of a century after the adoption of the Constitution and until the legislation during the recent civil war, no jurist and no statesman of any position in the country ever pretended that a power to impart the quality of legal tender to its notes was vested in the general government. There is no recorded word of even one in favor of its possessing the power. All conceded, as an axiom of constitutional law, that the power did not exist.
Mr. Webster, from his first entrance into public life in 1812, gave great consideration to the subject of the currency, and in an elaborate speech on that subject, made in the Senate in 1836, then sitting in this room, he said:
Page 110 U. S. 455
“Currency, in a large and perhaps just sense, includes not only gold and silver and bank bills, but bills of exchange also. It may include all that adjusts exchanges and settles balances in the operations of trade and business; but if we understand by currency the legal money of the country, and that which constitutes a legal tender for debts, and is the standard measure of value, then undoubtedly nothing is included but gold and silver. Most unquestionably there is no legal tender, and there can be no legal tender in this country, under the authority of this government or any other, but gold and silver, either the coinage of our own mints or foreign coins at rates regulated by Congress. This is a constitutional principle, perfectly plain and of the highest importance. The states are expressly prohibited from making anything but gold and silver a legal tender in payment of debts, and although no such express prohibition is applied to Congress, yet as Congress has no power granted to it in this respect but to coin money and to regulate the value of foreign coins, it clearly has no power to substitute paper or anything else for coin as a tender in payment of debts and in discharge of contracts. Congress has exercised this power fully in both its branches; it has coined money and still coins it; it has regulated the value of foreign coins, and still regulates their value. The legal tender, therefore, the constitutional standard of value, is established and cannot be overthrown. To overthrow it would shake the whole system.”
4 Webster’s Works 271.
And when the convention came to the prohibition upon the states, the historian says that the clause “No state shall make anything but gold and silver a tender in payment of debts” was accepted without a dissentient state. “So the adoption of the Constitution,” he adds,
“is to be the end forever of paper money, whether issued by the several states or by the United States, if the Constitution shall be rightly interpreted and honestly obeyed.”
Try to do better next time chum.
“Currency, in a large and perhaps just sense, includes not only gold and silver and bank bills, but bills of exchange also. It may include all that adjusts exchanges and settles balances in the operations of trade and business; but if we understand by currency the legal money of the country, and that which constitutes a legal tender for debts, and is the standard measure of value, then undoubtedly nothing is included but gold and silver”
Like I said..do better next time.
So..Now..they can coin money as long as it is Gold and Silver..
It doesn't say that states can coin their own money. It says" "...make anything but gold and silver Coin a Tender in Payment of Debts..."
In other words, the states cannot use anything but gold and silver as legal tender in the payment of debts.
Well, that was embarrassing. Those are great quotes, but you do realize that you haven’t proven your original assertion that the states can coin money, don’t you?
Find the passage authorizing them to do so in the US Constitution, and I’ll concede the argument.
Play on, if you can.
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