Posted on 11/26/2019 6:40:43 PM PST by Perseverando
COLUMBIA, S.C. (Nov. 22, 2019) – A bill prefiled in the South Carolina House would make gold and silver coins legal tender in the state. Passage of this bill would take a step toward creating currency competition in South Carolina and undermine the Federal Reserve’s monopoly on money.
Rep. Stewart Jones filed House Bill 4678 (H.4678) on Nov. 20. Under the proposed law, “gold and silver coins minted foreign or domestic shall be legal tender in the State of South Carolina under the laws of this State. No person or other entity may compel another person or other entity to tender or accept gold or silver coin unless agreed upon by the parties.”
Practically speaking, this would allow South Carolina residents to use gold or silver coins to pay taxes and other debts owed to the state. In effect, it would put gold and silver on the same footing as Federal Reserve notes.
The phrase, “unless agreed upon by the parties” has important legal ramifications. This wording reaffirms the court’s ability, and constitutional responsibility according to Article I, Section 10, to require specific performance when enforcing such contracts. If voluntary parties agree to be paid, or to pay, in gold and silver coin, South Carolina courts could not substitute any other thing, e.g. Federal Reserve Notes, as payment.
South Carolina could become the fourth state to recognize gold and silver as legal tender. Utah led the way, reestablishing constitutional money in 2011. Wyoming and Oklahoma have since joined.
(Excerpt) Read more at blog.tenthamendmentcenter.com ...
This is something of an oddball but worthy of a Federalist/Anti-Federalist ping. The Supreme Court’s decision in the Gold Clause cases of 1937 permitted abrogation of all gold contracts and cemented our Federal Reserve Notes as forced tender.
Thanks for the ping. Good thing for states to be doing.
This shouldn’t even be necessary. The Constitution is quite clear on what constitutes money and what States May use for payment of debts.
L
Federal government can mint currency.
Hallelujah! The Republic is saved!
The Supreme Court was wrong.
Good idea, but I would step it up a notch by creating a special state gold repository.
1) Anyone could bring their gold there for assaying and purification to a high standard, like the Canadian Gold Maple Leaf (GML), of .9999 or 24 carat purity. Then it would be minted with a hologram (like a GML) for authenticity, and put in a special box to protect it. The person who brought it in would either get the coins or their cash value.
2) The same concept would apply to high purity minted silver, platinum, palladium, and rhodium coins.
3) Unlike typical coinage, the face value of such coins could be near to or even higher than their value (typical maximum market value) as metal. So the state makes a profit when it sells such coins.
Salmon P. Chase declared his Civil War issued notes to be legal tender.
Once he became Chief Justice of the SCOTUS, he declared ONLY GOLD and SILVER to be legal tender.
Good luck keeping it from becoming ‘funny money’ as soon as it hits the streets.
Even pure gold coins become fakes as quick as they get out the bank vault.
We are headed back to the gold standard for the USD. Goodbye inflation!
It'd be interesting to know how many transactions per year are done in gold or silver in these states, especially Utah since it's been legal there for eight years.
Why? If it's been legal in Utah since 2011 and the federal courts haven't stepped in yet then why would they do so merely because South Carolina is the fourth state to legalize it?
In the mid/late 1950’s, I bought gas at $.17-.22 per gal. in Dallas TX. As a student in HS and part time worker at a local A&P grocery making $.50/hr., that was doable!
American Eagle gold coins are legal tender (at face value) in the United States already.
So a gallon of gas was the equivalent of 44% of your hourly rate. Today the equivalent would be gas for $3.19 a gallon. I don't know about you but I can fill up for about $2.35 a gallon in the KC area.
Another interesting idea comes to mind... Let's say you are called for jury duty. Could you demand to be paid in silver for the pitiful $5/day they pay you? If so, I'd like 5 silver eagles, which have a face value of $1, or would accept 5 pre-1933 Morgan/Peace dollars even though they are less valuable from an actual silver content point of view.
If I had a bunch of money to waste, I'd like to do exactly that, right here in Texas, which doesn't have such a law, since it says right there in black and white in the Constitution:
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 anything 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.
Let's say Alice buys a car from Bob, who runs a used auto dealership. They agree to make the transaction in modern U.S. Gold Eagles. The price of the car is $295. Alice pays with five 1 oz (face value $50), one 1/2 oz (face $25), one 1/4 oz (face $10), and one 1/10 oz (face $5). According to the face value of the coins, the transaction was $295, but the spot price of gold that day is $1,456.70, making the 'value' of the transaction in FRNs $8,521.70. Most states would require a sales tax on such a transaction. Let's say the tax rate is 7%. How is the transaction taxed? Is the tax applied to $295 or $8521? If the former, would it be $20 in gold (two .10 oz eagles), or $20 in FRNs? Or, would they claim the state was owed $596 in FRNs based on the spot price that day?
Since the state conducts most of it's business in FRNs, and the price was denominated in "dollars", it would be logical for Bob and Alice to argue that $20 in FRN was an appropriate tax, as the coins are issued by the U.S. government and are denominated in 'dollars'.
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