Wednesday, May 12, 2010

Ye Olde Specie | Idaho silver-based currency bills might have failed, but the 'sound money' movement marches on | Innovation | Boise Weekly

Ye Olde Specie | Idaho silver-based currency bills might have failed, but the 'sound money' movement marches on | Innovation | Boise Weekly

On a sunny Monday in January, Reps. Phil Hart and Lenore Hardy Barrett stood on the Idaho Capitol steps and introduced a crowd of Tea Partiers to two pieces of legislation that would have remade the state's economic landscape.

The Idaho Silver Gem Act, fronted by Hart, an Athol Republican, proposed that Idaho citizens ought to be able to pay their taxes with special medallions or bars struck from silver mined in North Idaho's Silver Valley--part of Hart's home district.

The Idaho Constitutional Tender Act, introduced by Barrett, a Republican from Challis, went even further. It sought to make silver and gold--both in physical coins and electronic ounces drawn from an online exchange--just as valid as Federal Reserve notes for the purchase of everything from groceries to new cars to property.

With similar bills floated in at least seven states, Tea Partiers chanting "end the fed" and the Idaho Republican Party adding "sound money" to its platform in 2008, the gold (or silver) standard may be making a comeback.


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  1. A gold standard, while a good start, isn't enough by itself.

    The fact is, it doesn't really matter what we use for money, what matters is *who issues it* and *in what quantity*

    While a metals-backed currency may be convenient, the accounting of scrip exchangeable for it must be controlled by congress, and the accounting must be completely transparent.

  2. Actually, the Constitutional Tender Act doesn't return the national dollar to a "gold standard" - it just brings the State back into compliance with what the Constitution requires every State to do.

    The national government does indeed have responsibility regarding money in America: to coin it (notice it does not give Congress the power to "emit bills of credit", the common parlance of "print currency", nor does it give Congress the power to bestow that power on any other entity); to regulate (literally, "make regular" - to make sure there is no deviance in the specie content of) the value of the money they have coined; to regulate (again, "make regular") the value of foreign coins (which meant they could be used here, but they had to be of a specific value of gold or silver content); to fix the Standard of Weights and Measures for circulating coins (grains, ounces, pounds, etc.); and to declare what the punishment should be for anyone who counterfeits what the U.S. Mint coins (which, by the way, was death - that's how seriously they took the idea of making our money worth less).

    Remember, in obeying the Constitution, we should always try to understand it as written, with the definitions it was meant to be understood by, and not by overlaying modern definitions or understandings upon it. (Can you imagine the international uproar if Congress were to "regulate the Value of foreign currency" today?) If we don't like what the framers meant, then they gave us the means to change it: the Amendment process.

    So, Article I, Section 8 declares specifically what Congress can do (Section 9 makes some specific declarations of what they can't do); Section 10 declares specifically what the States cannot do. Included in there is that they can't print currency ("emit bills of credit"), that they can't coin money, AND that they can't "make any Thing but gold and silver Coin a Tender in Payment of Debts". Now, that's pretty clear: if a State owes money to anyone, it can't "make a tender" (offer to pay the debt) to those entities in anything but gold or silver coin; and if the State is owed money, the State can't accept any tender made except if it is made in gold or silver coin.

  3. (For the understanding of this phrase "to make something a tender in payment of debt" see the original 1828 Webster's Dictionary - "TENDER: In law, an offer, either of money to pay a debt, or of service to be performed, in order to save a penalty or forfeiture which would be incurred by non-payment or non-performance; as the tender of rent due, or of the amount of a note or bond with interest. To constitute a legal tender, such money must be offered as the law prescribes; the offer of bank notes is not a legal tender.")

    Article I, Section 10 has not been amended. No matter what Congress does - and no matter whether or not they have violated the Constitution with our current monetary system - the Constitution remains very clear: No State is allowed to make or accept payments in anything but gold or silver coins. It's not up to the federal government to determine whether or not States can now disobey that direct prohibition, any more than it's up to the federal government to determine whether or not States can now disobey the direct prohibition on passing an ex post facto Law or granting any Title of Nobility. The Constitution says the State CANNOT do it - so the State must simply obey the Constitution, NO MATTER WHAT the federal government says or does. It is our duty as a State, and it is the duty of our State's elected officials, in keeping with their Oath before God, to pass laws that conform to the directives of the U.S. Constitution. Again, we can preface any question we may have, when possible, with this statement: "Since the U.S. Constitution requires every state to ONLY use gold and silver coins in payments to and by the State, then... [insert question here]". The key is to figure out HOW to do this, since we are required TO do this.