Washington State proposed bill to make gold and silver legal tender

I don't see what the big deal is. I mean you can exchange your fiat for gold and vice versa anytime.

And what's so bad about fiat? You can get it in nickel and copper if you like.

 

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That depends on how you interpret the Constitution...because it doesn't prohibit the Federal government from making currency nor does it specify any restrictions for how they can do it (what form it must be). Since the Federal government has been issuing currency for almost as long as the Constitution has existed...clearly the government is saying that it is legal since it's not prohibited.

That is completely and 100% wrong.

 

The reason it prohibits them from doing so, even though not explicitly, is because of the 10th Amendment.

"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

Maybe it isn't illegal, that might be debatable with the laws these days, but what I can say with certainty is that it is not within their purview to be acting in this role.

I would like to think that we can all agree that it was a loophole that allowed money to be created by an entity that did not have the right to do so, and since it was not named in the regulations of the task it took ownership of then it was yet another loophole that allowed it to undermine the Constitutional mandate that money must be coined from gold and silver.

The proposed law is merely a restoration of what the founding fathers intended, and is perfectly appropriate and legitimate, whether or not we agree on if it is ideal or beneficial.

 

To help clarify it, the constitutionality of the Federal Reserve Act has never been tested and that is the whole point. Clearly the Constitution defines what the US government can do or not do. The US Treasury is bound by it, but t the Federal Reserve isn't.

The Federal Reserve is an entity that was created by the federal government but isn't considered part of the federal government. Hence, for the purposes of the Constitution, it's considered a private company whose shareholders are the banks, and when people deal in federal reserve notes, they are not dealing with the federal government. The US Treasury still has the full authority to issue currency, but it choses not to because of the Constitutional limits placed on its currency. If it wasn't for this distinction, then there would be no need for the Federal Reserve.

 

As I read the article the bill would make gold and silver COINS legal tender. now since the state doesn't have any coins of their own and legally can't make them (Coining money is reserved for the Federal government) then about the only gold and silver coin would be the older US gold and silver coins. Well I hate to tell them this, but those are already legal tender.

They never said anything about refusing the government fiat money. There law would simply make gold and silver legal tender. The fiat paper already IS legal tender.

 

Gold is just ONE of the disqualifying properties. Also included is artwork, precious stones, and evidently "more than 25 chickens". (http://www.upi.com/Top_News/World-N...elfare-rules/UPI-44181328131969/?spt=hs&or=tn)

 

Art. I Sec. 10 Cl. 1:
"To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures"
http://www.constitution.org/constit_.htm#con1.8.5

 

I disagree. Inflexion is right that the Constitution is a document that only gives limited, explicit power to the Feds and reserving all other power to the states and citizens. However, "promote the general welfare" and "regulate interstate commerce" are the two clauses, which together, basically gives the Feds unlimited power when read the Supreme Court started to read these clauses starting in the 30's. The way they read these sections now, there is almost no restrictions on what the federal government can do. Those sections, in my view, were a mistake. They should have been much more specific and narrow.

 

This is incorrect. The states are specifically allowed to coin gold and silver coins as specified in Article 1. and they are allowed to designate it as legal tender.

 

Actually since about 2000 or so, the Supreme Ct. has made the point this isn't the case and has invalidated a number of laws where the Federal government went too far. This will be given a very important test when the Supreme Ct. hears the case brought forth by more than 1/2 the states concerning the constitutionality of Obamacare.

The Feds can only go so far. They face the issue of nullification from the states if they don't respect the bounds of the Constitution.

 

It's like you haven't actually read it.

"No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing 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."

Note the "coin money" part. That's EXACTLY the opposite of what you say.

 

I recommend that you read it again. Not the use of the word "but". as in "make any Thing but gold and silver Coin a Tender in Payment of Debts". In modern english this means they can only use silver & gold if they issue their own legal tender. This has been readily accepted to mean the states have the right to coin silver and gold as legal tender. This has been reaffirmed in numerous court decisions made over the years and that is noted in the very link you posted above. (which you must not have read). If you are going to post 25 links to Wikipedia, you ought to read them first.

 

No it doesn't, when it very specifically says states CANNOT COIN MONEY, that phrase means they cannot ***demand*** anything else as payment to the state. "Don't make me pay you in something besides gold or silver". It also doesn't preclude accepting other forms of legal tender. That kind of English.

States most certainly have absolutely no right to coin money or issue currency.

 

Then you don't understand the context of the clause. The law says that states can designate gold and silver coin as legal tender. It doesn't say that states must use US coined gold and siver coins. Where many modern people get mixed up is they don't understand the value of a gold coins isn't in who issued the coin but rather, the value is in the PM itself. The issuer of a gold/silver coin has simply assayed the coin to contain a certain amount of PM. Nothing more/nothing less. There is nothing wrong with the state assaying gold bullion and stamping it into a payment coin. There is nothing wrong with a private mint doing the same and submitting it to the state for payment.

The reason the clause was put in there is because the Framers did not want the states to be issuing "paper" money of their own. This clause effectively nullifies this. During the Colonial period there was widespread use of "Colonial" script issued by the states and by the time of the Revolutionary War the economy had been wrecked by high inflation due currency print. (The BOE also injected counterfeit script as punishment.) The Framers did not want another repeat of this.

 

(duplicate)

 

ctrl, if you substitute the word 'except' for the word 'but' it makes more sense what some of us are getting at.

Regarding:

"No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing 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"

It is not saying that states can't coin money. It is basically going through the list of all types of money, debt, payment methods, contractual agreements, etc. that might possibly be in the realm of a debt obligation, and then it says they can't create or enter into any of these things but (except for) gold and silver as payment of debts. The language is specifically calling out gold and silver as the only acceptable recourse for debt repayment by the states.

 

This is absurd.

"It is not saying that states can't coin money."
Constitution says: "No State shall ... coin Money;"

Further explained in some federal court cases:

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I agree, it clearly prohibits States from coining money. It is black and white.

Concerning making something a tender, it is simply saying for "legal tender", (a term reserved exclusively to debts, ie what a court can force someone to pay), states can only designate gold or silver. What this means in this context is the Federal government has full authority to declare legal tender, and create such, within the entire US. If a state wishes to add to what is "legal tender" it can only designate gold or silver as such.

The historical background was the US was woefully short of coinage when the Constitution was written. This clause allowed the States to declare Spanish silver and gold coin as legal tender, in addition to whatever US legal tender was, to facilitate trade. However, its clear both in the Constitution as well as the Federalist papers, that the right to coin money for the United States was agreed to strictly be a Federal function.

Sorry, but to read the Constitution says only gold and silver are money from this clause I strongly disagree with. It sounds like a conspiracy theory popularly written in gold bug blogs. If this was an accepted view, why has no state ever attempted it? Even those coining money before they were states stopped immediately before they became states.

 

OK you guys you've convinced me. I apologize for my misguided assertions. Any time the truth is propagated is a good thing in my book.

Still, it does say that states may only pay debt in gold and silver, which is not the case. The proposed law that started this thread is a step toward Constitutionality nonetheless.

 

The apparent legal interpretation is that states on their own cannot declare that something other than gold or silver is legal tender. It is the Federal government that can make that decision for all states.

The fact that Utah/Washington is declaring gold & silver coins minted by the US Mint to be good legal tender is not prohibiting anything. The effect is rather to make it so that if you want to pay your taxes using the face value of your gold coins, the state will accept that (of course). The more practical effect is that the sale of gold & silver is no longer subject to sales tax because it's technically like exchanging currency denominations.