by Shane Trejo
May 26, 2015
A bill taking a step towards gold and
silver as commonly-used legal tender in Texas passed in the state
Senate today by an overwhelming 29-2 vote.
Introduced by State Rep. Giovanni Capriglione (R- Southlake)
and four co-sponsors on Feb. 12, House Bill 483 (HB483)
would create a state bullion depository.
It reads, in part:
The Texas Bullion Depository is
established as an agency of this state in the office of the
The depository is established to
serve as the custodian, guardian, and administrator of
certain bullion and specie that may be transferred to or
otherwise acquired by this state or an agency, a political
subdivision, or another instrumentality of this state.
What the bill essentially does is create
a means for transactions to occur in precious metals.
It allows people to open an account and
deposit their precious metals in the state depository. They could
then use the electronic system to make payments to any other
business or person who also holds an account.
This opening of the market is considered by many insiders to be the
most important first step towards bringing sound money to mainstream
"The key is to make it so people can
use gold and silver instead of fiat paper money," said Michael
Boldin of the Tenth Amendment Center. "A bill like this won't
nullify the Fed on its own, but it is an important step forward
in that direction."
Currently, all debts and taxes in Texas must either get paid with
Federal Reserve Notes (dollars), authorized as legal tender by
Congress, or with coins issued by the U.S. Treasury - very few of
which have gold or silver in them.
But the United States Constitution states in Article I, Section 10,
"No State shall… make any Thing but
gold and silver Coin a Tender in Payment of Debts."
The legislation in Texas takes a step
towards that constitutional requirement, ignored for decades in
Such a tactic would undermine the
the Federal Reserve system by introducing competition into
the monetary system.
Professor William Greene is an expert on constitutional
tender and said when people in multiple states actually start using
gold and silver instead of Federal Reserve Notes, it would
effectively nullify the Federal Reserve and end the federal
government's monopoly on money.
Over time, as residents of the state use both Federal Reserve notes
and silver and gold coins, the fact that the coins hold their value
more than Federal Reserve notes do will lead to a "reverse Gresham's
Law" effect, where good money (gold and silver coins) will drive out
bad money (Federal Reserve notes).
As this happens, a cascade of events can begin to occur, including
the flow of real wealth toward the state's treasury, an influx of
banking business from outside of the state - as people in other
states carry out their desire to bank with sound money - and an
eventual outcry against the use of Federal Reserve notes for any
Once things get to that point, Federal Reserve notes would become
largely unwanted and irrelevant for ordinary people. Nullifying the
FED on a state by state level is what will get us there.
The passage of HB483 would mark the
first step toward that ultimate goal.
HB483 previously passed the House by a vote of 140-1. After some
amendments were added in committee on the Senate side, the bill will
first go back to the House for concurrence.
On Twitter, Capriglione said the
amendments were "minor" and in the vote, he "will concur."
Should the House join with Capriglione,
the bill will move to Gov. Abbott's desk for a signature.