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States seek currencies made of silver and gold
NEW YORK (CNNMoney) -- A growing number of states are seeking shiny new currencies made of silver and gold.
Worried that the Federal Reserve and the U.S. dollar are on the brink of collapse, lawmakers from 13 states, including Minnesota, Tennessee, Iowa, South Carolina and Georgia, are seeking approval from their state governments to either issue their own alternative currency or explore it as an option. Just three years ago, only three states had similar proposals in place.
"In the event of hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System ... the State's governmental finances and private economy will be thrown into chaos," said North Carolina Republican Representative Glen Bradley in a currency bill he introduced last year.
Unlike individual communities, which are allowed to create their own currency -- as long as it is easily distinguishable from U.S. dollars -- the Constitution bans states from printing their own paper money or issuing their own currency. But it allows the states to make "gold and silver Coin a Tender in Payment of Debts."
To the state legislators who are proposing state-issued currencies, that means gold and silver are fair game, said Edwin Vieira, an alternative currency proponent and attorney specializing in Constitutional law. And since gold has grown exponentially more valuable, while the U.S. dollar continues to lose ground, the notion has become increasingly appealing to state lawmakers, he said.
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4 comments:
That's an interesting constitutional clause to parse:
Article 1; Section. 10: "No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."
No State shall...coin Money; make any Thing but gold and silver Coin a Tender in payment of Debts;"
So, no State shall coin money, but can Tender gold and silver Coin in payment of debt. They can't coin it, but can make it to tender debts? Strange.
That also begs the question of whether any taxes/debts owed by a State to the US Federal Government are not paid in Gold or Silver coin, was the payment method unconstitutional?
'Thing' is capitalized, which must mean something, albeit vague.
The Courts will have a field day with that one.
As to the centralization of coinage, a common money is central to a unified nation. Permitting states to refuse to accept each other's coinage wouldn't have been a sound basis for unity.
The current paper money regime is only as old as the New Deal or the Nixon administration, depending on one's view. FDR prohibited redemption in specie for private citizens and Nixon prohibited specie redemption internationally. Because both of these events have occurred so recently, there are plenty of docs and cites for discerning the Founders' mind in this matter.
The larger question, however, is whether the Founders' wisdom matters anymore.
I believe "Thing" is capitalized because the convention at that time was that all nouns were capitalized.
There were some interesting court cases, if my memory has not failed, in the early 30's revolving around the constitutionality of FDR's taking the country off the gold standard. I think I will do some research on that.
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