Bill Would Ban Federal Currency In SC
By Adam Fogle | February 17th, 2010
PITTS INTRODUCES LEGISLATION TO REPLACE PAPER MONEY WITH GOLD, SILVER COINS
South Carolina will no longer recognize U.S. currency as legal tender, if State Rep. Mike Pitts has his way.
Pitts, a fourth-term Republican from Laurens, introduced legislation earlier this month that would ban what he calls “the unconstitutional substitution of Federal Reserve Notes for silver and gold coin” in South Carolina.
If the bill were to become law, South Carolina would no longer accept or use anything other than silver and gold coins as a form of payment for any debt, meaning paper money would be out in the Palmetto State.
Pitts said the intent of the bill is to give South Carolina the ability to “function through gold and silver coinage” and give the state a “base of currency” in the event of a complete implosion of the U.S. economic system.
“I’m not one to cry ‘chicken little,’ but if our federal government keeps spending at the rate we’re spending I don’t see any other outcome than the collapse of the economic system,” Pitts said.
But one legal expert told The Palmetto Scoop that, even if it were passed, Pitts’ bill would quickly be ruled unconstitutional.
“It violates a perfectly legal and Constitutional federal law, enacted pursuant to the Commerce Clause of the U.S. Constitution, that federal reserve notes are legal tender for all debts public and private,” the expert said. “We settled this debate in the early 1800s. I appreciate the political sentiment but the law is blatantly unconstitutional.”
Pitts, however, dismissed that claim, saying that “adherence to the Constitution is a two-edged sword. The federal government has consistently violated the Constitution, especially the 10th Amendment and Commerce Clause.”
Constitutional issues aside, Pitts’ bill faces another hurdle. Critics point out that silver and gold coins can’t actually serve as a form of currency.
“You can’t put a set value on a pure silver or gold coin because it’s actual value fluctuates,” one expert said. “You can say a gold coin is worth $50 but it would actually be worth whatever the market says it’s worth, based on supply and demand. In reality, what you have is a bartering good, not a form of currency.”
Still, Pitts said, a system based around bartering is better than a currency-based economy.
“To me, something I can hold tangible in my hand I can put more value in, especially under the current rate of inflation,” Pitts said. “In the case of total economic collapse, a barter tool is going to be worth a whole lot more value than paper with ink on it.”
But Pitts admits it is unlikely the bill will be passed.
“I’ve been trying to push bills forward that would crack down on intrusions on state’s rights for eight years,” said Pitts. “I don’t see the intestinal fortitude of this legislative body to test the federal government on Constitutional issues. One that has this much teeth in it I don’t think has the ability to pass.”