HJ590: Monetary unit based on metallic standard; joint subcommittee to study feasibility, etc.
HJ590H2
HOUSE JOINT RESOLUTION NO. 590 FLOOR AMENDMENT IN THE NATURE OF A SUBSTITUTE (Proposed by Delegate Marshall, R.G. on February 4, 2013) (Patron Prior to Substitute--Delegate Marshall, R.G.) Establishing a joint subcommittee to study the feasibility of a metallic-based monetary unit. Report.
WHEREAS, the purpose of money is to provide a reliable measure of value to facilitate the voluntary exchange of goods and services to the economic benefit of society; and
WHEREAS, the need to establish a sound money unit was deemed so essential for assuring the success of the United States that Thomas Jefferson personally assumed the task of defining the dollar as a fixed standard of value in his Notes on the Establishment of a Money Unit and of a Coinage for the United States; and
WHEREAS, 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; and
WHEREAS, unprecedented monetary policy actions recently taken by the Federal Reserve through activist intervention in banking and credit markets, including massive purchases of federal debt, have raised concern over the risk of dollar debasement and prompted inquiries into whether a metallic basis for United States currency might engender a more stable money unit consistent with limited government; and
WHEREAS, foreign threats to the United States in the form of sophisticated cyberattacks have begun to target banks and financial institutions, including primary banking service providers based in or operating within the Commonwealth, with the aim of undermining consumer confidence and seriously disrupting the functioning of our nation's economy; and
WHEREAS, the availability of a trustworthy money unit to facilitate productive economic and financial activity has historically been a major factor in restoring confidence and civil order under conditions of duress, and since the United States Constitution (Article I, Section 10) decrees that "no state shall make anything but gold and silver coin a tender in payment of debts"; now, therefore, be it
RESOLVED by the House of Delegates, the Senate concurring, That a joint subcommittee be established to study the feasibility of a metallic-based monetary unit. The joint subcommittee shall have a total membership of 10 members that shall consist of eight legislative members and two nonlegislative citizen members. Members shall be appointed as follows: five members of the House of Delegates to be appointed by the Speaker of the House of Delegates in accordance with the principles of proportional representation contained in the Rules of the House of Delegates; three members of the Senate to be appointed by the Senate Committee on Rules; one nonlegislative citizen member with expertise in monetary and financial issues to be appointed by the Speaker of the House of Delegates; and one nonlegislative citizen member with expertise in monetary financial issues to be appointed by the Senate Committee on Rules. Nonlegislative citizen members of the joint subcommittee shall be citizens of the Commonwealth of Virginia. The joint subcommittee shall elect a chairman and vice-chairman from among its membership, who shall be members of the General Assembly.
In conducting its study, the joint subcommittee shall receive testimony from such witnesses and take such other evidence as it deems appropriate and shall consider recommendations for legislation, with respect to the need, means, and schedule for establishing a metallic-based monetary unit to serve as a contingency currency for the Commonwealth.
Administrative staff support shall be provided by the Office of the Clerk of the House of Delegates. Legal, research, policy analysis, and other services as requested by the joint subcommittee shall be provided by the Division of Legislative Services. Technical assistance shall be provided by the Treasurer of the Commonwealth of Virginia and the Bureau of Financial Institutions of the State Corporation Commission. All other agencies of the Commonwealth shall provide assistance to the joint subcommittee for this study, upon request.
The joint subcommittee shall be limited to four meetings for the 2013 interim, and the direct costs of this study shall not exceed $17,440 without approval as set out in this resolution. Approval for unbudgeted nonmember-related expenses shall require the written authorization of the chairman of the joint subcommittee and the respective Clerk. If a companion joint resolution of the other chamber is agreed to, written authorization of both Clerks shall be required.
No recommendation of the joint subcommittee shall be adopted if a majority of the House members or a majority of the Senate members appointed to the joint subcommittee (i) vote against the recommendation and (ii) vote for the recommendation to fail notwithstanding the majority vote of the joint subcommittee.
The joint subcommittee shall complete its meetings by November 30, 2013, and the chairman shall submit to the Division of Legislative Automated Systems an executive summary of its findings and recommendations no later than the first day of the 2014 Regular Session of the General Assembly. The executive summary shall state whether the joint subcommittee intends to submit to the General Assembly and the Governor a report of its findings and recommendations for publication as a House or Senate document and shall specify the date by which the report shall be submitted. The executive summary and the report shall be submitted as provided in the procedures of the Division of Legislative Automated Systems for the processing of legislative documents and reports, and shall be posted on the General Assembly's website.
Implementation of this resolution is subject to subsequent approval and certification by the Joint Rules Committee. The Committee may approve or disapprove expenditures for this study, extend or delay the period for the conduct of the study, or authorize additional meetings during the 2013 interim.
HOUSE JOINT RESOLUTION NO. 590 AMENDMENT IN THE NATURE OF A SUBSTITUTE (Proposed by the House Committee on Rules on January 31, 2013) (Patron Prior to Substitute--Delegate Marshall, R.G.) Establishing a joint subcommittee to study the feasibility of a monetary unit based on a metallic standard, in keeping with constitutional precepts and our nation's founding principles, to facilitate commerce in the event of a major breakdown of the Federal Reserve System or disruption of financial services. Report.
RESOLVED by the House of Delegates, the Senate concurring, That a joint subcommittee be established to study the feasibility of a monetary unit based on a metallic standard, in keeping with constitutional precepts and our nation's founding principles, to facilitate commerce in the event of a major breakdown of the Federal Reserve System or disruption of financial services.
The joint subcommittee shall have a total membership of 10 members that shall consist of eight legislative members and two nonlegislative citizen members. Members shall be appointed as follows: five members of the House of Delegates to be appointed by the Speaker of the House of Delegates in accordance with the principles of proportional representation contained in the Rules of the House of Delegates; three members of the Senate to be appointed by the Senate Committee on Rules; one nonlegislative citizen member with expertise in monetary and financial issues to be appointed by the Speaker of the House of Delegates; and one nonlegislative citizen member with expertise in monetary financial issues to be appointed by the Senate Committee on Rules. Nonlegislative citizen members of the joint subcommittee shall be citizens of the Commonwealth of Virginia. The joint subcommittee shall elect a chairman and vice-chairman from among its membership, who shall be members of the General Assembly.
HOUSE JOINT RESOLUTION NO. 590 Offered January 9, 2013 Prefiled January 3, 2013 Establishing a joint subcommittee to study whether the Commonwealth should adopt an alternate medium of commerce or currency to serve as an alternative to the currency distributed by the Federal Reserve System in the event of a major breakdown of the Federal Reserve System. Report.
Patron-- Marshall, R.G.
Committee Referral Pending
WHEREAS, the Supreme Court of the United States has ruled in In re Rahrer, 140 U.S. 545, 554 (1891), that "the police power" of a State "is a power originally and always belonging to the states, not surrendered by them to the general government, nor directly restrained by the Constitution of the United States, and essentially exclusive"; and
WHEREAS, the Supreme Court of the United States has ruled in Beer Company v. Massachusetts, 97 U.S. 25, 33 (1877), that the police power of the states "extend[s] to the protection of the lives, health, and property of the[ir] citizens, and to the preservation of good order"; and
WHEREAS, the protection of the lives, health, and property of Virginia's citizens and the preservation of good order in the Commonwealth depend upon the maintenance of both an adequate system of governmental finance and a sound and robust private economy; and
WHEREAS, an adequate system of governmental finance and a sound and robust private economy cannot be maintained in the absence of a sound currency; and
WHEREAS, from our nation's founding, there has been concern regarding the country's monetary and banking systems and their potential to harm the citizenry; and
WHEREAS, founding father Thomas Jefferson expressed deep concern about the social instability that may ultimately result from bank-issued paper money; in a letter to John Wayles Eppes dated June 24, 1813, Mr. Jefferson stated, "Bank-paper must be suppressed, and the circulating medium must be restored to the nation to whom it belongs"; and
WHEREAS, Mr. Jefferson also cautioned Americans regarding the role that banks play in fostering excessive public borrowing, stating in a letter to John Taylor dated May 28, 1816: "And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale"; and
WHEREAS, this concern has been voiced through the years by many people and was to a certain extent realized during a series of "bank panics" occurring throughout the country's history culminating in the Great Depression in the 1930s; and
WHEREAS, the closing of American banks during the Great Depression led to the issuance of scrip or emergency currency by both public and private institutions beginning in 1933; and
WHEREAS, efforts to establish strong and stable currency markets also proceeded at the international level; and
WHEREAS, to rebuild an international monetary system shattered by World War II, 44 Allied nations met in July 1944 to establish a system of rules, institutions, and procedures to regulate the international monetary system; and
WHEREAS, the resulting agreement, known as the Breton Woods Agreement, began operation in 1945 and established the International Monetary Fund with a key feature being the requirement for each country to adopt a monetary policy that maintained the exchange rate by tying its currency to the U.S. dollar, thereby making the dollar the reserve currency; and
WHEREAS, recent efforts have been made to remove the U.S. dollar as the reserve currency; and
WHEREAS, the present monetary and banking systems of the United States, centered around the Federal Reserve System, have come under ever-increasing strain during the last several years, and will be exposed to ever-increasing and predictably debilitating strain in the years to come; and
WHEREAS, the Federal Reserve System, in addition to the continuing strain it is under, continues to take actions that are questionable and simply not in the best interests of Virginia citizens, including in October 2011 authorizing the transfer of nearly $76 trillion in credit default swap insurance investment instruments to be insured by the Federal Deposit Insurance Corporation (FDIC) over the FDIC's objection; and
WHEREAS, the legality of the extension of the Federal Reserve System's activities in recent years has been compounded by the role it has taken with respect to the Troubled Asset Relief Protection Program (TARP) and the distribution of federal stimulus funds; and
WHEREAS, officials of the Richmond Federal Reserve Bank have indicated to Delegate Robert Marshall of the Virginia House of Delegates that federal officials had significant doubts regarding the legality of the role of the Federal Reserve System with respect to TARP; and
WHEREAS, many widely recognized experts predict the inevitable destruction of the Federal Reserve System's currency through hyperinflation in the foreseeable future; and
WHEREAS, in the event of hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System, for which the Commonwealth is not prepared, the Commonwealth's governmental finances and the Commonwealth's private economy will be thrown into chaos, with gravely detrimental effects upon the lives, health, and property of Virginia's citizens, and with consequences fatal to the preservation of good order throughout the Commonwealth; and
WHEREAS, Virginia can avoid or at least mitigate many of the economic, social, and political shocks to be expected to arise from hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System only through the timely adoption of an alternative sound currency that the Commonwealth's government and citizens may employ without delay in the event of the destruction of the Federal Reserve System's currency; and
WHEREAS, "legal tender" denotes a currency that must be accepted in payment of a debt denominated in United States "dollars" if the parties have not stipulated that some alternative currency is to be used as their medium of payment or are not otherwise required to use such alternative currency; and
WHEREAS, the Federal Reserve System's currency has been designated "legal tender" under color of Title 31, United States Code, Section 5103; and
WHEREAS, under Title 12, United States Code, 411 and Title 31, United States Code, 5118(b) and (c), the Federal Reserve System's currency is not redeemable in gold or silver coin or the equivalent in bullion; and
WHEREAS, that the Federal Reserve System's currency is not redeemable in gold or silver coin or the equivalent in bullion is being identified by more and more experts as a, if not the, major reason for the ever-increasing instability of the Federal Reserve System; and
WHEREAS, all gold and silver coins of the United States are designated "legal tender" under the aegis of Title 31, United States Code, 5103 and 5112(h) and must be so designated perforce of Article I, Section 8, Clause 5 and Article I, Section 10, Clause 1 of the United States Constitution; and
WHEREAS, pursuant to Article I, Section 10, Clause 1 of and the Tenth Amendment to the United States Constitution, each state must make gold and silver coin a tender in payment of debts; and
WHEREAS, the Supreme Court of the United States in Lane County v. Oregon, 74 U.S. (7 Wallace) 71, 76-78 (1869), and Hagar v. Reclamation District No. 108, 111 U.S. 701, 706 (1884), has ruled that the states may adopt whatever currency they desire for the purposes of performing their sovereign governmental functions, even to the extent of adopting gold and silver coin for those purposes while refusing to employ a currency not redeemable in gold or silver coin that Congress has designated "legal tender"; and
WHEREAS, the police power being the primary sovereign governmental function of every state, under Lane County and Hagar every state may adopt its own currency, consisting of gold or silver, or both, whenever necessary and proper to facilitate exercises of that power in aid of the general welfare of the state and its citizens; and
WHEREAS, under the aegis of Title 31, United States Code, 5118(d)(2), and perforce of Article I, Section 8, Clause 5 and Article I, Section 10, Clause 1 of, and the Ninth and Tenth Amendments to, the Constitution of the United States, Americans may employ whatever currency they choose to stipulate as the medium for payment of their private debts, including gold or silver, or both, to the exclusion of a currency not redeemable in gold or silver that Congress may have designated "legal tender"; and
WHEREAS, under the aegis of Title 31, United States Code, 5118(d)(2), and perforce of Article I, Section 8, Clause 5 and Article I, Section 10, Clause 1 of, and the Ninth and Tenth Amendments to, the Constitution of the United States, the citizens of Virginia may choose to employ as the medium for payment of their private debts whatever alternative currency, consisting of gold or silver, or both, that the Commonwealth may adopt in the exercise of "the police power"; and
WHEREAS, in light of the possible instability of the Federal Reserve System, proposals for states and their citizens to adopt an alternative currency consisting of gold or silver, or both, are receiving increasing attention throughout the United States, as evidenced by bills that have been or are being introduced in the legislatures of the other states; and
WHEREAS, various systems of alternative currency employing gold or silver, or both, in the form of coin or its equivalent in bullion have already proved themselves in the free market and could either be employed by the Commonwealth directly or be used as models for a new system created by the Commonwealth to meet Virginia's unique needs; and
WHEREAS, the adoption of an alternative currency consisting of gold or silver, or both, would not destabilize the present monetary and banking systems, the Commonwealth's governmental finances, or Virginia's private economy because it would not compel or commit the Commonwealth or her citizens to employ such alternative currency to the exclusion of the Federal Reserve System's currency immediately, but would merely make the alternative currency available, and enable it to be used in competition with and preference to the Federal Reserve System's currency, to the degree that the need for such use became apparent; and
WHEREAS, the United States Congress, the U.S. Department of the Treasury, and the Federal Reserve System have taken and are preparing to take no action to provide the United States with an alternative to the Federal Reserve System's currency, in the likely event that the latter would be destroyed through hyperinflation; and
WHEREAS, because legislators in Virginia know or should know all of these facts; and because the General Assembly has the authority, the ability, and the duty to take timely action to deal with this situation without first seeking the approval of or assistance from Congress or any other state; and because the Constitution of Virginia provides, "That all power is vested in, and consequently derived from, the people, that magistrates are their trustees and servants, and at all times amenable to them" - for these reasons, the citizens of the Commonwealth will properly conclude that the members of the General Assembly will be primarily responsible if the Commonwealth is found to be without an alternative medium of commerce or currency when the Federal Reserve System's currency collapses in hyperinflation, or some other related economic calamity supervenes; now, therefore, be it
RESOLVED by the House of Delegates, the Senate concurring, That a joint subcommittee be established to study whether the Commonwealth should adopt an alternate medium of commerce or currency to serve as an alternative to the currency distributed by the Federal Reserve System in the event of a major breakdown of the Federal Reserve System.
The joint subcommittee shall consist of eight legislative members who shall be appointed as follows: five members of the House of Delegates to be appointed by the Speaker of the House of Delegates in accordance with the principles of proportional representation contained in the Rules of the House of Delegates and three members of the Senate to be appointed by the Senate Committee on Rules. The joint subcommittee shall elect a chairman and vice-chairman from among its membership.
In conducting its study, the joint subcommittee shall call or hear from such witnesses and take such other evidence as it deems appropriate and shall consider recommendations for legislation, with respect to the need, means, and schedule for establishing such an alternative currency.
The joint subcommittee shall be limited to six meetings for the 2013 interim, and the direct costs of this study shall not exceed $22,560 without approval as set out in this resolution. Approval for unbudgeted nonmember-related expenses shall require the written authorization of the chairman of the joint subcommittee and the respective Clerk. If a companion joint resolution of the other chamber is agreed to, written authorization of both Clerks shall be required.
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