NASHVILLE, Tenn. (Feb. 8, 2023) – A bill filed in the Tennessee House would make gold and silver legal tender in the state. Passage into law would eliminate a big barrier to using gold and silver in everyday transactions, a foundational step for the people to undermine the Federal Reserve’s monopoly on money.
Rep. Bud Hulsey (R) introduced House Bill 1481 (HB1481) on Feb 1. Under the proposed law, gold and silver coins would be deemed legal tender in this state. It is a companion bill to Senate Bill 311 (SB311) sponsored by Sen. Frank Niceley (R).
“Notwithstanding a law to the contrary, gold and silver coinage must be accepted as legal tender, at their spot price, and must be receivable in payment of all debts, public or private, hereafter contracted in this state. Costs incurred in the course of verification of the weight and purity of any gold or silver coinage during any such transaction must be borne by the receiving entity.”
Practically speaking, this would allow Tennesseans 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 footing as Federal Reserve notes.
HB1481 would specifically require the state to accept gold and silver as payment for taxes.
Provisions in the legislation would also authorize any person or entity in the state to produce and sell gold or silver coins each coin is labeled in a clear and intelligible manner with the weight and purity of the metal.
This legislation is part of a two-pronged approach to establishing sound money in Tennessee. Niceley also introduced a bill to establish a state bullion depository. Under HB1481, the state would be required to deposit any gold and silver collected for the payment of taxes in the depository.
Tennessee 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.”
In 2022, Tennessee passed a bill repealing the sales tax on gold and silver bullion.
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 Tennessee 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 HB1481 would remove legal barriers that hinder the use of gold and silver as money in Tennessee.
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
HB1481 has not yet been referred to a committee. When it is, it must be scheduled for a hearing and pass committee with a majority vote in order to continue on in the legislative process.
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