The Quest for Sound Money in New Hampshire
There are two principal monetary provisions
in the American Constitution. Taken together they make clear
the intent of that document's Framers.
Article I, section 8 states: "The Congress shall have
To coin Money, regulate the Value thereof
The repeated misinterpretation of this clause has enabled
it to be misused and abused. There exists a widely accepted
but horribly erroneous notion that this clause empowers Congress
to make the dollar whatever it decides the 'dollar' to be,
but the Framers intended something entirely different. To
them 'regulate' meant the occasional adjustment of the ratio
between gold and silver so as to keep the exchange rate of
these two monetary metals consistent with their prevailing
supply and demand. It clearly did not mean any extension of
power to Congress to create a fiat currency not backed by
silver or gold, like the dollar as it presently exists.
Then Article I, section 10 states: "No State shall
any Thing but gold or silver Coin a Tender in Payment of debts."
The meaning of this provision is self-evident. Given the monetary
abuses perpetrated by the states, both as a colonial government
and under the confederation, the Framers intended that the
states be subject to the requirement of fair and just compensation
in the repayment of their own debts.
Though the above two provisions are different
in the sense that one imposes conditions on the federal government
and the other imposes conditions on the states, they do have
one thing in common. Both of these provisions are being ignored.
To put it another way, the monetary system used within the
US today is wholly unconstitutional. In the words of Edwin
Vieira, from his truly monumental undertaking, Pieces of
Eight: The Monetary Powers and Disabilities of the United
States Constitution, http://www.piecesofeight.us/PofE.html
"the monetary system of the United States is [today]
the very antithesis of what the Founders contemplated and
the Constitution embodies."
We can ignore this reality, or we can try to do something
about it. I have chosen the latter alternative.
GoldMoney provides the means for individuals to protect themselves
from the monetary perfidy of politicians, but more is needed.
Consequently, I have been participating in a nascent effort
to restore sound money in New Hampshire.
Last year State representative Henry McElroy introduced HB
1342, which has been dubbed the New Hampshire Sound Money
Bill. This bill enables people to use gold and silver in their
transactions with the state of New Hampshire. In other words,
if this bill is eventually signed into law, people will be
given a meaningful choice. For everyone who needs to transact
with the state government, they can continue to do so in terms
of fiat currency, i.e., Federal Reserve dollars. Or they can
demand that the state of New Hampshire transact with them
in gold and silver, as is required in Article I, Section 10.
Therefore, those who need to pay money to the state (in taxes
for example) and people who receive payments from the state
(such as employees, suppliers and contractors) can under this
bill ask the state of New Hampshire to accept gold or silver
from them or require the state to pay in gold or silver.
Thus, this bill will enable gold and silver to circulate
once again as currency, at least in regard to transactions
with the state. Of particular importance is the form of currency
to be used.
Firstly, US minted coins are acceptable, but they will circulate
on the basis of metal content, and not the dollar amount stamped
into the coin. The rate of exchange used in a transaction
depends upon the prevailing market rate of exchange between
Federal Reserve dollars and gold/silver at the time of the
transaction. The dollar face value on the gold or silver coin
(for example, the $50 'value' stamped onto a Gold Eagle) is
ignored. It is solely the weight of gold and silver within
the coin that determines the coin's value in exchange for
Federal Reserve dollars.
Secondly, a more modern form of currency can also be used.
The bill allows digital gold currency - like that made available
through GoldMoney - to be used as a means of payment. The
bill requires basic fiduciary criteria for digital currency
providers, thereby ensuring the state government and other
users that the digital gold currency system is managed and
run by scrupulous and honest operators. These criteria include
the provisions already being used in GoldMoney, so once this
bill passes into law, I intend to make GoldMoney the first
digital currency provider sanctioned by the New Hampshire
To sum up, the Framers of the Constitution purposefully included
the two monetary provisions noted above. They wanted to "form
a more perfect union" because the collapse of the continental
- the currency of the confederation - had created chaos and
deprivation. What's more, they were opposed to what they called
"consolidation", that the federal government would
usurp powers delegated to the states, eroding the protection
of individual rights granted by the Constitution. Gold and
silver protect us from "consolidation".
In the telling words of RJ Rushdoony as quoted
by Vin Suprynowicz in his excellent article "Franklin
Delano Mussolini": "The rise of the modern totalitarian
state has its economic origin in the abandonment of gold coinage
for paper money. As the creator of fiat money, of instant
money by means of legalized counterfeiting of wealth, the
state is always the wealthiest and most powerful force in
To learn more about New Hampshire's Sound Money
Bill, go to www.goldmoneybill.org.
The bill is scheduled for a vote by the New Hampshire legislature
in January 2006.
I hope New Hampshire makes history by signing this important
piece of legislation into law, and I encourage you to contact
the legislators in your state to also adopt this Sound Money
Bill. It was drafted by Edwin Vieira, who was careful to make
sure that it is constitutional and conforms with existing
US law. In other words, there is nothing to stop gold and
silver from circulating as currency once again, and thereby
restoring the original intent the Framers set out in the Constitution.
2004 by The Freemarket Gold & Money Report. All rights reserved
James Turk is the editor of Freemarket
Gold & Money Report
and the founder of GoldMoney