State Gold Money Gaining Traction

An online article in the New American devotes itself to the progress made by the Utah Specie Tender Act of 2011, or “The Sound Money Act.” Unlike the state of Virginia's resolution to put the matter to a subcomittee, Utah's law is the real deal. It acknowledges the federal government's de facto monopoly on issuing fiat currency, and does not propose that the state of Utah coin gold or silver money. Eagles, junk silver coinage, and privately-issued gold and silver coins would be acceptable.

What it does do is authorize the Utah government to collect taxes and fees in gold and silver, and use either in any intrastate commerce transaction. It also authorizes the govenment to pay tax rebates in precious metals too.

Since the central bank came into existence in 1913, the bill points out that Federal Reserve Notes (what Americans today call dollars) have lost more than 90 percent of their purchasing power. Meanwhile, during that period “as well as throughout the entire course of recorded human history, gold and silver coin have reliably retained their purchasing power,” the legislation notes.

Since sound, constitutional money which retains its value is important to the people of Utah, the economy and the state government, the circulation of gold and silver coin in the state “vitally affects the public interest,” the bill states. And so, if passed, the government could deal in American Eagles, U.S. coins minted before the silver was removed, coins privately minted in Utah, or certain gold and silver coins produced by a small list of foreign governments.

Under the proposed law, the Utah Treasurer would be required to regularly calculate and publish the state’s exchange rate between precious metals and Federal Reserve Notes. “Specie Exchange rates should be set so as to achieve the wide use and circulation of gold and silver coin in the course and scope of Utah Intrastate Commerce, especially with respect to the collection of taxes and fees by Utah Governmental Entities.” Of course, the state’s exchange rates would not affect private transactions except for purposes of calculating tax liability.

The bill also explicitly ensures the protection of privacy, making clear that gold and silver holdings are not subject to disclosure requirements without a lawful warrant. It exempts gold and silver from capital gains, sales, and property taxes as well. The state’s metals would be protected by a reconstituted Utah Self Defense Force.

The end of the article points out that at least ten state legislatures have either introduced or considered similar bills.


I'm not trying to knock the gold standard by this comparison, but it's hard not to think of the California marijuana-legalization intiative (Proposition 19) that was narrowly defeated last November. Both of them show a drive for repeal at the state level; both seek rollback of 20th century laws that were once widely popular but are now becoming discredited.

It's as if Americans were living in the early stage of anti-Prohibition. The Eigtheenth Amendment was ratified in 1919, and the Volstead Act passed in the same year, but Kansas had outlawed liquor through an amendment to its state Constitution as far back as 1881. Movements that begin in one state, and spread to others, often make their impact at the federal level. It just takes some time, typically more than a decade, to trickle up.

Could Utah be the Kansas of the gold standard movement? We'll find out.


(As for California, I'm quite sure the legalization forces will try again next election. Possession of small amounts of marijuana is already decriminalized there; the penalty's now a $100 ticket. CA might well be the anti-Prohibition state in the area of currently illegal drugs.)