The US dollar may soon face competition in South Carolina. A bill filed by Rep. Stewart Jones would make gold and silver coins legal tender across the state, effectively undermining the Federal Reserve’s monopoly on currency. Should the bill pass, South Carolina residents would be allowed to use gold and silver coins to pay taxes and other debts owed to the state, equaling gold and silver to the US dollar.
The proposed bill reads that “gold and silver coins minted foreign or domestic shall be legal tender in the State of South Carolina under the laws of this State.” It also states that no one may compel anyone else “to tender or accept gold or silver coin unless agreed upon by the parties.” This final phrase means that if both parties agree to pay/be paid in gold or silver, the courts could not enforce any other currency as payment, such as Federal Reserve notes.
Back in 2011, Utah became the first state to recognize gold and silver as legal currency, followed by Wyoming and Oklahoma. In Utah, all taxes on gold and silver were eliminated
One barrier to using gold and silver in everyday transactions in South Carolina has already been removed when the state repealed the sales taxes on the two metals. If gold and silver are recognized as legal tender, it’s expected that the state will no longer impose capital gains taxes on them, leaving the door wide open to using gold and silver as money.
According to the United States Constitution, “No State shall […] make any Thing but gold and silver Coin a Tender in Payment of Debts.” (Article 1, Section 10). All debts and taxes in South Carolina (and most other states) are currently paid either with Federal Reserve Notes (dollars) or with coins issued by the US Treasury, most of which contain no gold or silver.
The South Carolina bill would reestablish gold and silver as legal tender by moving towards the constitutional requirement. Competition in the monetary system would undermine the central bank’s monopoly on creating and controlling our money.
Professor William Greene, a constitutional legal tender expert, states that the fact gold and silver hold their value more than Federal Reserve Notes would lead to a situation “where good money (told and silver) would drive out bad money (Federal Reserve Notes).” In turn, “a cascade of events can begin to occur, including the flow of real wealth towards the state’s treasury, an influx of banking business from outside of the state […] and an eventual outcry against the use of Federal Reserve Notes for any interactions.”
From the unprecedented purchases of gold by global central banks to our own states bringing back gold and silver as legal tender, gold is regaining its central status as a store of wealth and currency worldwide.