It is beginning to look like Virginia could emerge as a leading role among the states in respect of monetary reform. They are one of a number of states that are reaching deep into the Constitution of the United States to protect themselves in an era when the value of the dollars issued by the federal government is collapsing.
Editorial of The New York Sun
February 5, 2013
It’s starting to look like Virginia could yet emerge in a leading role among the states in respect of monetary reform. The lower chamber of its general assembly has passed a bill to underwrite a study of the feasibility of a monetary unit based on a metallic standard. It is one of a number of states that are reaching deep into the Constitution of the United States to protect themselves in an era when the value of the dollars issued by the federal government is collapsing.
We wrote about the situation in the Old Dominion two years ago, in an editorial called “Virginia’s Golden Opportunity.” The measure was still in its earliest stages, but it was important in and of itself and also because Virginia is such an important state, particularly in respect of the Constitution. The chairman of the convention that wrote the Constitution, George Washington, the so-called “father of the Constitution,” James Madison, and the author of the Declaration of Independence, Thomas Jefferson, were, after all, all Virginians.
They were also of the view that gold and silver are the true money. Washington warned that paper money always has the effect “to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice." Jefferson called specie — meaning gold and silver “the most perfect medium because it will preserve its own level; because, having intrinsic and universal value, it can never die in our hands, and it is the surest resource of reliance in time of war.” Madison had a similar view.
This is why, when the Constitution was written, it prohibited the states from coining money or emitting paper money or making “any Thing but gold and silver Coin a Tender in Payment of Debts.” This means that Virginia can’t make its own coins, but it can make gold and silver coins legal tender within the state. More than a dozen states are exploring doing just that, spurred, at least in part, by the American Principles Project and also by the collapse in the value of the fiat dollars being issued by the Federal Reserve.
It’s unclear at the moment whether the measure in Virginia will clear the state’s senate. The Washington Post quoted one legislator in Virginia, Mark Sickles, as asking, “Are we seriously going to spend taxpayer resources studying a replacement to the world’s backbone currency?” But it’s not just Virginia’s delegates who are growing concerned. At various times during the recent collapse of the dollar, China, key ministers in Europe, and the United Nations itself have all begun to speak out on the need to establish a new reserve currency.
“Our nation’s most fundamental principles — equal rights, rule of law, private property rights, individual liberty — still require a dependable dollar to be meaningfully preserved,” the Washington Post quotes the Virginia bill as saying. This is precisely why the study that Virginia is considering could prove to be so important. By our lights this is another area — like public service unions, spending and tax reduction, entitlement reform, eminent domain protection, and vouchsafing the right to keep and bear arms — where the states are leading the reform effort in the country.
Call it the miracle of federalism. Virginia has an opportunity to begin an important study of the powers of the states at a time when the value of the dollar has plunged to below a 1,670th of an ounce of gold, little more than half of what it was valued at when Barack Obama acceded to the presidency. It is less than a 6th of the value at which the dollar stood at the start of the Bush presidency. If Virginia acts, it would not be surprising to see more states follow its lead.
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