OKLAHOMA CITY, June 11, 2014 – Oklahoma Gov. Mary Fallin has signed a bill into law that declares gold and silver as legal tender within the state.
Signed last week, Senate Bill 862 (SB862) was introduced by Sen. Clark Jolley and Rep. Gary Banz, with co-sponsorship from Sen. Natham Dahm. It reads, in part:
Gold and silver coins issued by the United States government are legal tender in the State of Oklahoma. No person may compel another person to tender or accept gold or silver coins that are issued by the United States government, except as agreed upon by contract.
The law also provides a state-level tax exemption to Oklahoma residents exchanging their precious metals for another medium of change:
For taxable years beginning on or after January 1, 2015, there shall be exempt from Oklahoma taxable income, or in the case of an individual, the Oklahoma adjusted gross income, any amount of net capital gains, as defined in 26 U.S.C.A., Section 1222 of the Internal Revenue Code and included in the federal income tax return, which result from the sale or exchange of gold or silver for another form of legal tender.
Oklahoma has become the second state to recognize gold and silver as legal tender authorized for payments of debts and taxes. Earlier this year, the Arizona senate also passed a similar bill by a vote of 18-12, but that bill has stalled in the state house.
Previously, all debts and taxes in Oklahoma and the rest of the United States were either paid with Federal Reserve Notes (dollars) which were authorized as legal tender by Congress, or with coins issued by the U.S. Treasury — very few of which have gold or silver in them.
The United States Constitution states in Article I, Section 10, “No State shall…make any Thing but gold and silver Coin a Tender in Payment of Debts.” This law is an important step towards that constitutional requirement which has been ignored for a long time in every state of the country. It begins the process of abolishing the Federal Reserve system by attacking it from the bottom up – pulling the rug out from under it by working to make its functions irrelevant at the State and local levels.
The passage of this legislation also marks the beginning of currency competition between precious metals and Federal Reserve Notes in the state of Oklahoma. Professor William Greene explains:
“Over time, as residents of the State use both Federal Reserve Notes and silver and gold coins, the fact that the coins hold their value more than Federal Reserve Notes do will lead to a “reverse Gresham’s Law” effect, where good money (gold and silver coins) will drive out bad money (Federal Reserve Notes). As this happens, a cascade of events can begin to occur, including the flow of real wealth toward the State’s treasury, an influx of banking business from outside of the State – as people in other States carry out their desire to bank with sound money – and an eventual outcry against the use of Federal Reserve Notes for any transactions.”
Once things get to that point, Federal Reserve notes would become largely unwanted and irrelevant for the general public. Nullifying the Fed on a state by state level is what will get us there.
Without a single act of Congress, the Federal Reserve system can be brought to its knees by passing bills similar to SB862 in states all over the country.
SB862 passed through the Senate by a 39-3 margin and then passed through the House by a 57-11 margin. The overwhelming majority voting in support of gold and silver as legal tender demonstrates that the mandate for a monetary alternative to Federal Reserve notes is building. Legislators just need to be made aware of the problem and how it can be remedied at the state level.
For more information about how to get back to sound money and restore constitutional tender in your state, click HERE.