NASHVILLE. Tenn. (Jun. 5, 2017) – Last spring, Tennessee Gov. Bill Haslam signed a resolution in support of creating a state gold bullion depository. Both houses of the legislature passed the measure unanimously. So, what’s happened since? Nothing.
Rep. Bud Hulsey (R-Kingsport) sponsored House Joint Resolution 516 (HJR516) during the 2016 legislative session. It declares support for creation of a gold bullion depository in Tennessee
“The State of Tennessee supports the safekeeping and storage of gold and precious metal bullion and coins in a Tennessee bullion depository or other such similar facility.”
The Senate approved the resolution 27-0, and the House passed the measure 95-0. Unanimous approval of HJR516 in both the House and the Senate put every single member of the Tennessee legislature on record as supporting a gold bullion depository in Tennessee, along with Gov. Haslam.
When the resolution passed last year, it was our hope that the legislature would seize the momentum, follow up and pass legislation to establish a bullion depository this year. Instead, all we heard were crickets from the Tennessee General Assembly. Nobody even introduced a bill.
Resolutions can serve a valuable purpose, laying a foundation for further action. But without some kind of substantive follow-up, they are merely empty words. Unfortunately, Tennessee legislator’s dropped the ball on this one.
In 2015, Texas Gov. Abbott signed a bill into law to create a bullion depository in the Lone Star State. Since then, the state has moved forward in getting the facility up and running. The new Texas Bullion Depository will not only provide a place to safely store gold and silver, it will enable Texans to conduct transactions using sound money.
In a nutshell, through the depository, Texans will be able to deposit gold or silver and pay other people through electronic means or checks. Once fully operational, private individuals and entities will be able to purchase goods and services using assets in the vault in the same way they use cash today. Doing so has the potential to open the market to sound money in day-to-day transactions.
This process is already happening in Utah. After the state passed its legal tender act in 2011 United Precious Metals Association (UPMA) set up the state’s first “gold bank.” It offers publicly available accounts denominated in gold and silver dollars. According to the UPMA, in the past year it has grown 700 percent in assets under management and made up 2 percent of the market for U.S gold and silver coins. You don’t even have to live in Utah to open an account, and an account-holder can conduct business in gold and silver with any other account-holder across the country. Efforts are underway in Utah to create a legal environment even more favorable to such private gold banks and encourage an expanding market for their services in the sate.
Both private and state-run “bullion banks” can seriously undermine the Fed’s monopoly on money. They allow for the easy transfer of physical precious metals, meaning everyday people can easily transact business using gold and silver. The option to use sound money can force rapidly depreciating Federal Reserve notes out of the marketplace. Constitutional tender expert Professor William Greene said when people in multiple states actually start using gold and silver instead of Federal Reserve Notes, it would effectively nullify the Federal Reserve and end the federal government’s monopoly on money.
“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.”
Tennessee missed a golden opportunity (pun intended) to seize on the momentum generated by passage of HJR516 last year and move forward to establish a bullion depository in the state. But it’s not too late for legislators in the Volunteer State to take action. If you live in Tennessee, contact your state representative and senator, and remind them they voted to support a gold depository in the state. Then ask them to follow through and introduce a bill to establish one during the 2018 legislative session. You can find contact information for your state reps HERE.
