Legal tender bill introduced

This article was originally printed in Numismatic News.
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Rep. Ron Paul, R-Texas, chairman of the House coinage subcommittee and possible third-party presidential candidate in 2012, introduced a bill March 15 that would change the legal tender laws to allow states and others to make their own gold and silver coins and offer an alterative tothe output of the U.S. Mint and the U.S. Bureau of Engraving and Printing.

H.R. 1098 has no co-sponsors at the present time and has been referred to the Committee on Financial Services.

In an unusual twist, jurisdiction is also divided by the Committees on Ways and Means and the Judiciary, meaning that if it is examined seriously, it will wreak havoc on the Mint and BEP, which have had a monopoly in making money for more than a century.

Given a short title of “Free Competition in Currency Act of 2011,” it has the dual goal “to repeal the legal tender laws, to prohibit taxation on certain coins and bullion and to repeal superfluous sections related to coinage.”

The bill would repeal section 5103 of title 31 of the U.S. Code, the heart of the legal tender provisions of American coin and currency law. The section says that “United States coins and currency (including Federal Reserve Notes” and other items, “are legal tender for all debts, public charges, taxes and dues,” and then goes on to declare that “Foreign gold or silver coins are not legal tender for debts.”

Paul says he is concerned with individual rights and thus the bill provides that “no tax may be imposed on (or with respect to the sale, exchange, or other disposition of) any coin, medal, token, or gold, silver, platinum, palladium, or rhodium bullion, whether issued by a state, the United States, a foreign government, or any other person.”

It goes on to provide that “no state may assess any tax or fee on any currency, or any other monetary instrument, which is used in the transaction of interstate commerce or commerce with a foreign country, and which is subject to the enjoyment of legal tender status under article I, section 10 of the United States Constitution.”

This provision would go into effect on Dec. 31, 2011 if the bill passes before then.

The legislative initiative then mountsan assault on counterfeiting provisions of the U.S. Code by striking sections 486 (relating to uttering coins of gold, silver, or other metal) and 489 (making or possessing likeness of coins).

If adopted, the bill also would have a Special Rule Concerning Retroactive Effect – Any prosecution under the sections stricken by subsection (a) shall abate upon the taking effect of this section. Any previous conviction under those sections shall be null and void .

This would presumably include Bernard von NotHaus, who was convicted March 18 of a section 486 violation by a North Carolinajury after a lengthy prosecution and trial. Rep. Paul was subpoenaed to testify at that trial but asserted congressional immunity to avoid testifying.