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Hard Tender, Sound Money

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Much to the chagrin of Progressive Pulse, Blue NC, the Charlotte Observer, and various other left-wing publications across the state, NC House Representative Glen Bradley is at it again.

Having already introduced bills to protect North Carolina Intrastate Commerce and firearms manufacturers, as well as to nullify the Food Safety Modernization Act, Bradley’s next project is a bill to require the state government to accept gold and silver coin as payment.

The North Carolina Constitutional Hard Tender Act, currently in drafting, gives legal tender status to “Any Tender Silver, Tender Gold, or Registered Specie.”  By doing so, it makes any gold or silver bullion, coin, shot, or bulk material (excepting jewelry or artwork) of a sufficient purity just as legal as the U.S. dollar for payment of state taxes and fees. The bill defines the purity requirements for gold as 22 and 24 carat, with silver required to be from .90 and .999 purity.

What’s interesting about the bill is how open-ended it is. It requires the state government to accept gold and silver as legal tender, but it does not require private companies and individuals to do the same. It says that they may do so, but they do not have to. It sets a state exchange rate for swapping gold and silver tender with U.S. Dollars, but rather than fixing the rate, simply says, “Exchange rate is the Current Median of 168- by 24-hour Moving Average Spot Price.” For private entities, it allows exchanges of State and Federal money, “at the exchange rate agreed upon by both parties of the exchange” and says that, “Assessing of handling fees is allowed for private exchanges.” However, for state government-run exchanges, “The State Treasury may assess handling fees at the exchange rate equal to the operational costs of the exchange.”

One of the main things the Hard Tender Act does is repeal many of the taxes now levied on the purchase of gold and silver coins, shot, and bullion. It repeals capital gains taxes on gold and silver held long-term by private citizens. With the record-breaking price gains made by both gold and silver over the last decade, this will save commodity investors significant amounts of money. It also repeals sales and use taxes on gold and silver, giving them the same status as currency exchanges between U.S. dollars and Euros, Yen, and other foreign currencies.

Finally, the bill adds a single position to the State Bureau of Investigation to oversee enforcement against monetary fraud connected with gold and silver state money, and specifies that the position and the exchange services provided by the state be funded by receipt of fees assessed for performing the currency exchanges.

As calls for increased oversight at the Federal Reserve grow (Congressman Ron Paul’s 2011 Fed Audit bill just gained its 100th co-sponsor) and the natural disasters in Japan increase the likelihood that foreign nations holding trillions in U.S. treasuries will call our debt, the importance of providing a sound money alternative for North Carolinians has never been greater. North Carolina’s Campaign for Liberty will keep readers apprised of the progress of this bill through drafting and submission, and make sure they know how to contact their legislators to ask that they lend it their support. The current draft of the legislation can be found here.

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Adam Love is the NC State Coordinator for Campaign for Liberty. The Mission of Campaign for Liberty is to promote and defend the great American principles of individual liberty, constitutional government, sound money, free markets, and a noninterventionist foreign policy, by means of educational and political activity.

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