HELENA, Mont. (Feb. 26, 2023) – On Friday, a Montana House committee held a hearing on a bill that would take important steps toward treating gold and silver as money instead of commodities. Passage would set the stage for the people to undermine the Federal Reserve’s monopoly on money.
Rep. Joe Read (R) introduced House Bill 629 (HB620) on Feb. 17. The legislation would establish “specie” as legal tender in the state, making it receivable in payment of all public and private debts contracted for in the state of Montana.
“Specie legal tender, including specie legal tender recognized in other states, is legal tender in this state.”
Specie is generally defined as gold or silver coin or bullion issued by the United States.
Practically speaking, this would allow Montanans to use gold or silver coins as money rather than just as mere investment vehicles. In effect, it would put gold and silver on the same practical footing as Federal Reserve notes.
On Feb. 24, the House State Administration Committee held a hearing on HB620, an important first step in the legislative process.
MORE DETAIL
Under the proposed law, “Gold or silver coin or bullion, other than gold or silver coin that is issued by the United States, is considered to be specie legal tender if a court of competent jurisdiction issues a final, unappealable judgment or order determining that the gold or silver coin or bullion may be recognized as legal tender in this state.”
By allowing the court to designate additional specie to be used as legal tender, Montana could free its citizens from potential supply constraints imposed by the use of only United States-minted gold and silver coin. More importantly, the people of the state of Montana would be able to define what specie is considered constitutional tender, further distancing themselves from potential control of their competing currency by Washington D.C.
The proposed law would require the state treasurer to create a process so people could use specie and specie legal tender for the payment of state and local taxes, “subject to authentication procedures determined by the state treasurer that are consistent with the precious metals industry standards.”
The treasure would also be required to determine, maintain, and publish market-based exchange rates between specie, specie legal tender, and other legal tender currencies on a real-time basis on the department’s website for the purpose of calculating tax payments to or from the state.
If market conditions warrant, the treasure would be empowered to invest in precious metal leases or bonds payable in precious metals.
Montana 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.
The effect has been most dramatic in Utah where United Precious Metals Association (UMPA) was established after the passage of the Utah Specie Legal Tender Act and the elimination of all taxes on gold and silver. UPMA offers accounts denominated in U.S.-minted gold and silver dollars. The company was also instrumental in the development of the “Utah Goldback,” described as “the first local, voluntary currency to be made of a spendable, beautiful, physical gold.”
BACKGROUND
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.” Currently, all debts and taxes in Kansas are 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 Federal Reserve destroys this constitutional monetary system by creating a monopoly based on its fiat currency. Without the backing of gold or silver, the central bank can easily create money out of thin air. This not only devalues your purchasing power over time; it also allows the federal government to borrow and spend far beyond what would be possible in a sound money system. Without the Fed, the U.S. government wouldn’t be able to maintain all of its unconstitutional wars and programs. The Federal Reserve is the engine that drives the most powerful government in the history of the world.
The passage of HB620 would remove legal barriers that hinder the use of gold and silver as money in Montana.
Making gold and silver legal tender also takes another step in 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, and setting the stage to undermine the Federal Reserve monopoly by introducing competition into the monetary system.
In a paper presented at the Mises Institute, 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.”
Once things get to that point, Federal Reserve notes would become largely unwanted and irrelevant for ordinary people. Nullifying the Fed on a state-by-state level is what will get us there.
WHAT’S NEXT
HB620 was referred to the House State Administration Committee where it must pass by a majority vote before moving forward in the legislative process.
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