By Bradley Harrington
“Specie is the most perfect medium because it will preserve its own level, because, having intrinsic and universal value, it can never die in our hands …” — Thomas Jefferson, “Letter to John Wayles Eppes,” 1813 —
For those who don’t follow Wyoming legislative or financial issues very closely, it was easy to miss the July 1 enactment of a recently-passed law, the “Wyoming Legal Tender Act” of 2018.
It won’t be so easy to miss that law’s implications, however; but, first, in order to set the table properly, a few short digressions into history are necessary:
■ Back in 1791 — with thanks mainly to the masterly, if completely misguided, maneuvering of Treasury Secretary Alexander Hamilton, who sought to place the finances of the new U.S. government onto a solidly national, government-controlled platform — Congress passed, and Washington signed, a bill authorizing the “First Bank of the United States.”
The reasons why Hamilton favored such an establishment are worth noting: To “establish financial order,” to “establish credit” and to “resolve the issue of the fiat currency.”
Secretary of State Thomas Jefferson, however, violently opposed its implementation, on the basis of its monopolization of federal financial power as well as its conflict with the soon-to-be-adopted Tenth Amendment to the Bill of Rights. These arguments did little to convince either Congress or the President at the time — but, by 1811, with the Bank’s charter up for a 20-year renewal, such thinking was in a much greater ascendancy and the Bank’s charter was nullified.
■ The second time the United States starting fooling around with national banks was in 1816, with the establishment of the “Second Bank of the United States,” and this time it took Andrew Jackson and his “Bank War” to get rid of it completely (by removing all its deposits in 1833).
Mercifully, the economy of the increasingly-industrialized United States was spared such a national disaster for decades to come — but, by 1913, a powerful bloc of federally-inclined political forces and interests was in the ascendancy instead, and we ended up with:
■ The “Federal Reserve Act” of 1913, which established a de-facto “third” bank of the United States, brought in the new “Federal Reserve Note” and removed all restrictions on “fractional” banking (set down to 10 percent, in this case).
■ And, finally, with the abandonment of the gold standard nationally with the “Gold Reserve Act” of 1934, the foundation was laid for an inflationary spiral to take place in the decades to come (a power President Roosevelt acted on immediately, devaluing the now-unchained “fiat” dollar from $20.67 to $35 for a troy ounce of gold, a loss of over 40 percent).
■ So, now, fast-forward to 2018, 84 years later, where gold is now $1,233 an ounce and goods routinely cost 10 or more times now what they did then (gas in 1934, 19 cents; in 2018, $2.49; a carton of Camel cigarettes in 1934, $1.20; in 2018, $52.46.)
■ We are now left with the wreckage of the “Third Bank of the United States” and its multi-decades long impact on our economy: A hijacked financial system now controlled by political and economically-“elite” interests; a worthless paper dollar, no longer backed by any kind of commodity, that threatens to descend into a hyperinflationary mode at any time; and credit bubbles, both personally and governmentally, whose deficits can only be counted in the tens — HUNDREDS — of trillions of dollars.
All of the problems, in other words, that these “national banks” were supposed to solve. In this case, I’d say the “cure” has been much worse than the disease.
Well, that mess isn’t going to get cleaned up overnight, if at all — complete financial insolvency on all of those levels is much more likely — but, as a small step in that direction, Wyoming’s new Legal Tender Act reverses two of those maladies:
■ “Specie,” i.e., “coin having gold or silver content,” as well as “refined gold or silver bullion,” is now considered as “legal tender,” which means: Gold and silver now qualify as “money” again, not just a commodity (9-4-1302).
■ And, being actual money, therefore, “the purchase, sale or exchange of any type or form of specie legal tender” shall no longer “give rise to any tax liability of any kind” (9-4-1304).
The way has now been paved, in other words, for REAL money to compete with the phony Federal Reserve Notes within state boundaries. And that, Dear Readers, is a significantly necessary first step toward ending the Fed’s money monopoly forever that we’ve been needing for a long, long time.
Bradley Harrington is a computer technician and a writer who lives in Cheyenne. Email: firstname.lastname@example.org.
NOTE: This column was originally published in the Wyoming Tribune Eagle on August 5, 2018. Here is this column’s original downloadable PDF file.