U.S. Rep. Ron Paul | legal tender |
legal tender
Monetary Policy
16 October 1998 1998 Ron Paul 120:15
Second, Congress should legalize the Constitutional principle that gold and silver be legal tender by prohibiting sales and capital gains taxes from being placed on all American legal tender coins.
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The US Dollar and the World Economy
September 6, 2001 2001 Ron Paul 75:1
Congress has a constitutional responsibility to maintain the value of the dollar by making only gold and silver legal tender and not to “emit bills of credit.”
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Foolishness Of Fiat
31 October 2001 2001 Ron Paul 92:2
Fiat money is paper money that gets its value from a government edict and compulsory legal tender laws. Honest money, something of real value, like a precious metal, gets its value from the market and through voluntary exchange. The world today is awash in fiat money like never before, and we face a financial crisis like never before, conceived many decades before the 9–11 crisis hit.
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Beware Dollar Weakness
June 5, 2002 2002 Ron Paul 52:1
Mr. Speaker, I have for several years come to the House floor to express my concern for the value of the dollar. It has been, and is, my concern that we in the Congress have not met our responsibility in this regard. The constitutional mandate for Congress should only permit silver and gold to be used as legal tender and has been ignored for decades and has caused much economic pain for many innocent Americans. Instead of maintaining a sound dollar, Congress has by both default and deliberate action promoted a policy that systematically depreciates the dollar. The financial markets are keenly aware of the minute-by-minute fluctuations of all the fiat currencies and look to these swings in value for an investment advantage. This type of anticipation and speculation does not exist in a sound monetary system.
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Abolishing The Federal Reserve
10 September 2002 2002 Ron Paul 86:7
In fact, Congress’ constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our Nation’s founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true free-market economy.
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Legislation To Prohibit The Federal Government From Imposing A “Carry Tax”
17 July 2003 2003 Ron Paul 78:2
Proposals to punish people if their economic behavior meets with the disapproval of government officials form the foundation of the type of central planning which caused so much misery in the last century. The carry tax proposal is obviously incompatible with a free market. This proposal is also a major threat to personal and financial privacy and thus individual liberty. In order to enforce the carry tax, the government would need a means of monitoring how long each piece of currency has been in circulation and how many hands it passed through before coming into the possession of the person on whom the tax is assessed. Thus, enforcing this tax would also give the government the power to monitor the transactions of individual Americans. The Federal Government should not abuse the authority granted it by our current monetary system and legal tender laws as a backdoor means of prying into the private economic transactions of American citizens. That is why my legislation also forbids the Federal Government from placing any information storage capacity on any Federal Reserve notes.
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Bring Back Honest Money
17 July 2003 2003 Ron Paul 82:1
Mr. Speaker, I rise to introduce the Honest Money Act. The Honest Money Act repeals legal tender laws, a.k.a. forced tender laws, that compel American citizens to accept fiat (arbitrary) irredeemable paper-ticket or electronic money as their unit of account.
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Bring Back Honest Money
17 July 2003 2003 Ron Paul 82:2
Absent legal tender laws, individuals acting through the markets, rather than government dictates, determine what is to be used as money. Historically, the free-market choice for money has been some combination of gold and silver, whenever they were available. As Dr. Edwin Vieira, the nation’s top expert on constitutional money, states: “A free market functions most efficiently and most fairly when the market determines the quality and the quantity of money that’s being used.”
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Bring Back Honest Money
17 July 2003 2003 Ron Paul 82:3
While fiat money is widely accepted thanks to legal tender laws, it does not maintain its purchasing power. This works to the disadvantage of ordinary people who lose the purchasing power of their savings, pensions, annuities, and other promises of future payment. Most importantly, because of the subsidies our present monetary system provides to banks, which, as Federal Reserve Chairman Alan Greenspan has stated, “induces” the financial sector to increase leverage, the Federal Reserve can create additional money, in Mr. Greenspan’s words, “ without limit .” For this reason, absent legal tender laws, many citizens would refuse to accept fiat irredeemable paper-ticket or electronic money.
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Bring Back Honest Money
17 July 2003 2003 Ron Paul 82:4
Legal tender laws disadvantage ordinary citizens by forcing them to use money that is vulnerable to vast depreciation. As Stephen T. Byington wrote in the September 1895 issue of the American Federationist : “No legal tender law is ever needed to make men take good money; its only use is to make them take bad money. Kick it out!” Similarly, the American Federation of Labor asked: “If money is good and would be preferred by the people, then why are legal tender laws necessary? And, if money is not good and would not be preferred by the people, then why in a democracy should they be forced to use it?”
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Bring Back Honest Money
17 July 2003 2003 Ron Paul 82:6
While harming ordinary citizens, legal tender laws help expand the scope of government beyond that authorized under the Constitution. However, the primary beneficiaries of legal tender laws are financial institutions, especially banks, which have been improperly granted the special privilege of creating fiat irredeemable electronic money out of thin air through a process commonly called fractional reserve lending. According to the Federal Reserve, since 1950 these private companies (banks) have created almost $8 trillion out of nothing. This has been enormously advantageous to them.
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Bring Back Honest Money
17 July 2003 2003 Ron Paul 82:7
The advantages given banks and other financial institutions by our fiat monetary system, which is built on a foundation of legal tender laws, allow them to realize revenues that would not be available to these institutions in a free market. This represents legalized plunder of ordinary people. Legal tender laws thus enable the redistribution of wealth from those who produce it, mostly ordinary working people, to those who create and move around our irredeemable paper-ticket electronic money which is, in essence, just scrip.
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Bring Back Honest Money
17 July 2003 2003 Ron Paul 82:8
The drafters of the Constitution were well aware of how a government armed with legal tender powers could ravage the people’s liberty and prosperity. That is why the Constitution does not grant legal tender power to the federal government, and the states are empowered to make legal tender only out of gold and silver (see Article 1, Section 10). Instead, Congress was given the power to regulate money against a standard, i.e., the dollar. When Alexander Hamilton wrote the Coinage Act of 1792, he simply made into law the market-definition of a dollar as equaling the silver content of the Spanish milled dollar (371.25 grains of silver), which is the dollar referred to in the Constitution. This historical definition of the dollar has never been changed, and cannot be changed any more than the term “inch,” as a measure of length, can be changed. It is a gross misrepresentation to equate our irredeemable paper-ticket or electronic money to “dollars.”
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Bring Back Honest Money
17 July 2003 2003 Ron Paul 82:9
However, during the 20 th century, the legal tender power enabled politicians to fool the public into believing the dollar no longer meant a weight of gold or silver. Instead, the government told the people that the dollar now meant a piece of government-issued paper backed up by nothing except the promises of the government to maintain a stable value of currency. Of course, history shows that the word of the government (to protect the value of the dollar) is literally not worth the paper it is printed on.
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Bring Back Honest Money
17 July 2003 2003 Ron Paul 82:10
Tragically, the Supreme Court has failed to protect the American people from unconstitutional legal tender laws. Salmon Chase, who served as Secretary of the Treasury in President Lincoln’s administration, when he was Chief Justice of the Supreme Court, dissenting in Knox vs. Lee, summed up the argument against legal tender laws in twelve words: “The legal tender quality [of money] is only valuable for the purposes of dishonesty .” [emphasis added.]
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Bring Back Honest Money
17 July 2003 2003 Ron Paul 82:11
Another prescient Justice was Stephen Field, the only Justice to dissent in every legal tender case to come before the Court. Justice Field accurately described the dangers to our constitutional republic posed by legal tender laws: “The arguments in favor of the constitutionality of legal tender paper currency tend directly to break down the barriers which separate a government of limited powers from a government resting in the unrestrained will of Congress. Those limitations must be preserved, or our government will inevitably drift from the system established by our Fathers into a vast, centralized, and consolidated government.” A government with unrestrained powers is properly characterized as tyrannical.
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Bring Back Honest Money
17 July 2003 2003 Ron Paul 82:12
Repeal of legal tender laws will help restore constitutional government and protect the people’s right to a medium of exchange chosen by the market, thereby protecting their current purchasing power as well as their pensions, savings, and other promises of future payment. Because honest money serves the needs of ordinary people, instead of fiat irredeemable paper-ticket electronic money that improperly transfers the wealth of society to a small specially privileged financial elite along with other special interests, I urge my colleagues to cosponsor the Honest Money Act.
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Abolishing The Federal Reserve
17 July 2003 2003 Ron Paul 83:8
In fact, Congress’ constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our nation’s founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true free-market economy.
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:6
Our Founders thoroughly understood this issue, and warned us against the temptation to seek wealth and fortune without the work and savings that real prosperity requires. James Madison warned of “The pestilent effects of paper money,” as the Founders had vivid memories of the destructiveness of the Continental dollar. George Mason of Virginia said that he had a “Mortal hatred to paper money.” Constitutional Convention delegate Oliver Ellsworth from Connecticut thought the convention “A favorable moment to shut and bar the door against paper money.” This view of the evils of paper money was shared by almost all the delegates to the convention, and was the reason the Constitution limited congressional authority to deal with the issue and mandated that only gold and silver could be legal tender. Paper money was prohibited and no central bank was authorized. Over and above the economic reasons for honest money, however, Madison argued the moral case for such. Paper money, he explained, destroyed “The necessary confidence between man and man, on necessary confidence in public councils, on the industry and morals of people and on the character of republican government.”
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Paper Money and Tyranny
September 5, 2003 2003 Ron Paul 93:80
Repeal of all legal tender laws is a must. Sound money never requires the force of legal tender laws. Only paper money requires such laws.
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Gold And The U.S. Dollar
25 April 2006 2006 Ron Paul 23:47
The Founders were especially adamant about avoiding the chaos, inflation and destruction associated with the continental dollar. That is why the Constitution is clear that only gold and silver should be legal tender in the United States. In 1792, the Coinage Act also authorized the death penalty for any private citizen who counterfeited the currency. Too bad they weren’t explicit that counterfeiting by government officials is just as detrimental to the economy and the value of the dollar.
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Statement for Hearing before the House Financial Services Committee, “Monetary Policy and the State of the Economy”
15 February 2007 2007 Ron Paul 32:17
Change legal tender laws to allow constitutional legal tender (commodity money) to compete domestically with the dollar.
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In The Name Of Patriotism (Who Are The Patriots?)
22 May 2007 2007 Ron Paul 55:21
Protesters against this unconstitutional system of paper money are considered unpatriotic criminals and at times are imprisoned for their beliefs. The fact that, according to the Constitution, only gold and silver are legal tender and paper money outlawed matters little. The principle of patriotism is turned on its head. Whether it’s with regard to the defense of welfare spending at home, confiscatory income tax, or an immoral monetary system or support for a war fought under false pretense without a legal declaration, the defenders of liberty and the Constitution are portrayed as unpatriotic, while those who support these programs are seen as the patriots.
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Introduction Of The Honest Money Act
15 June 2007 2007 Ron Paul 64:1
Mr. PAUL. Madam Speaker, I rise to introduce the Honest Money Act. The Honest Money Act repeals legal tender laws that force American citizens to accept fiat money in their economic transactions.
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Introduction Of The Honest Money Act
15 June 2007 2007 Ron Paul 64:2
Absent legal tender laws, individuals acting through the market will determine what is money. Historically, when individuals have been free to choose their money they have selected items that are portable, widely accepted, and have a stable value. Having the market, rather than the government, define money is integral to the functioning of a free economy. As Edwin Vieira, perhaps the Nation’s top expert on constitutional monetary policy says, “. . . a free market functions most efficiently and most fairly when the market determines the quality and the quantity of money that’s being used.”
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Introduction Of The Honest Money Act
15 June 2007 2007 Ron Paul 64:3
While fiat money produced by the State is portable and, thanks to legal tender laws, widely accepted, it is certainly not of stable value. In fact, our entire monetary policy is predicated on the government’s ability to manipulate the value of the currency. Thus, absent legal tender laws, many citizens would refuse to accept government money for their transactions.
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Introduction Of The Honest Money Act
15 June 2007 2007 Ron Paul 64:4
Legal tender laws disadvantage ordinary citizens by forcing them to use inferior money, which they would otherwise refuse. As Stephen T. Byington put in the September 1895 issue of the American Federationist: “No legal tender law is ever needed to make men take good money; its only use is to make them take bad money. Kick it out!”
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Introduction Of The Honest Money Act
15 June 2007 2007 Ron Paul 64:5
It may seem surprising that the Mr. Byington’s well-phrased attack on legal tender laws appeared in the publication of the American Federation of Labor. However, enlightened union leaders of that time recognized that ways in which workers where harmed by the erosion of the value of money which inevitably follows when governments pass legal tender laws.
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Introduction Of The Honest Money Act
15 June 2007 2007 Ron Paul 64:6
Legal tender laws may disadvantage average citizens but they do help power-hungry politicians use inflationary monetary policy to expand the government beyond its proper limits. However, the primary beneficiaries of legal tender laws are the special interests who are granted the privilege of producing and controlling the paper money forced on the public via legal tender laws. Legal tender laws thus represent the primary means of reverse redistribution where the wealth of the working class is given, via laws forcing people to use debased money, to well-heeled, politically powerful bankers.
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Introduction Of The Honest Money Act
15 June 2007 2007 Ron Paul 64:7
The drafters of the Constitution were well aware of how a government armed with legal tender powers could ravage the people’s liberty and prosperity. This is why the Constitution does not grant legal tender powers to the federal government. Instead, Congress was given powers to establish standards regarding the value of money. In other words, in monetary matters the Congress was to follow the lead of the market. When Alexander Hamilton wrote the coinage act of 1792, he simply adopted the market-definition of a dollar as equaling the value of the Spanish milled silver coin.
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Introduction Of The Honest Money Act
15 June 2007 2007 Ron Paul 64:8
Legal tender laws have reversed that order to where the market follows the lead of Congress. Beginning in the 19th century, Federal politicians sought to enhance their power and enrich their cronies, by using legal tender powers to change the definition of a dollar from a silver-or-gold-backed unit whose value is determined by the market, to a piece of paper produced by the State. The “value” of this paper may be normally backed in part by gold or silver, but its ultimate backing is the power of the State, and its value is determined by the political needs of the State and the powerful special interests who influence monetary policy.
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Introduction Of The Honest Money Act
15 June 2007 2007 Ron Paul 64:9
Unfortunately, the Supreme Court failed to protect the American people from Congress’ unconstitutional legal tender laws. Supreme Court Justice, and Lincoln Treasury Secretary, Salmon Chase, writing in dissent in the legal tender cases, summed up the main reason why the Founders did not grant Congress the authority to pass legal tender laws: “The legal tender quality [of money] is only valuable for the purposes of dishonesty.” Justice Chase might have added dishonesty is perpetrated by State-favored interests on the average American.
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Introduction Of The Honest Money Act
15 June 2007 2007 Ron Paul 64:10
Another prescient Justice was Stephen Field, the only justice to dissent in every one of the legal tender cases to come before the Court. Justice Field accurately described the dangers to the constitutional republic posed by legal tender laws: “The arguments in favor of the constitutionality of legal tender paper currency tend directly to break down the barriers which separate a government of limited powers from a government resting in the unrestrained will of Congress. Those limitations must be preserved, or our government will inevitably drift from the system established by our Fathers into a vast, centralized and consolidated government.”
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Introduction Of The Honest Money Act
15 June 2007 2007 Ron Paul 64:11
Considering the growth of government since the Supreme Court joined Congress in disregarding the constitutional barriers to legal tender laws, can anyone doubt the accuracy of Justice Field’s words? Repeal of legal tender laws would restore constitutional government and protect the people’s right to use a currency chosen by the market because it serves the needs of the people, instead of having to use a currency chosen by the State because it serves the needs of power hungry politicians and special interests. Therefore, I urge my colleges to cosponsor the Honest Money Act.
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Introduction Of The Federal reserve Board Abolition Act
15 June 2007 2007 Ron Paul 65:6
In fact, Congress’ constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our Nation’s founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true free-market economy.
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Statement of Ron Paul on H.R. 5140
29 January 2008 2008 Ron Paul 2:7
Tax cuts by themselves will not restore long-term economic health unless and until this body finally addresses the fundamental cause of our economic instability, which is monetary policy. The inflationary policies of the Federal Reserve are the root of the boom-and-bust cycle that has plagued the American economy for almost 75 years. The Federal Reserve’s inflationary polices are also at the root of the steady decline in the American people’s standard of living. A good step toward monetary reform would be for Congress to pass my HR 2576, which repeals the federal legal tender laws. This would allow people to use alternatives to government-issued fiat money and thus protect themselves from Federal Reserve-created inflation.
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Statement on Competing Currencies
February 13, 2008 2008 Ron Paul 4:7
The first step consists of eliminating legal tender laws. Article I Section 10 of the Constitution forbids the States from making anything but gold and silver a legal tender in payment of debts. States are not required to enact legal tender laws, but should they choose to, the only acceptable legal tender is gold and silver, the two precious metals that individuals throughout history and across cultures have used as currency. However, there is nothing in the Constitution that grants the Congress the power to enact legal tender laws. We, the Congress, have the power to coin money, regulate the value thereof, and of foreign coin, but not to declare a legal tender. Yet, there is a section of US Code, 31 USC 5103, that purports to establish US coins and currency, including Federal Reserve notes, as legal tender.
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Statement on Competing Currencies
February 13, 2008 2008 Ron Paul 4:8
Historically, legal tender laws have been used by governments to force their citizens to accept debased and devalued currency. Gresham’s Law describes this phenomenon, which can be summed up in one phrase: bad money drives out good money. An emperor, a king, or a dictator might mint coins with half an ounce of gold and force merchants, under pain of death, to accept them as though they contained one ounce of gold. Each ounce of the king’s gold could now be minted into two coins instead of one, so the king now had twice as much “money” to spend on building castles and raising armies. As these legally overvalued coins circulated, the coins containing the full ounce of gold would be pulled out of circulation and hoarded. We saw this same phenomenon happen in the mid-1960s when the US government began to mint subsidiary coinage out of copper and nickel rather than silver. The copper and nickel coins were legally overvalued, the silver coins undervalued in relation, and silver coins vanished from circulation.
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Statement on Competing Currencies
February 13, 2008 2008 Ron Paul 4:10
In the absence of legal tender laws, Gresham’s Law no longer holds. If people are free to reject debased currency, and instead demand sound money, sound money will gradually return to use in society. Merchants would have been free to reject the king’s coin and accept only coins containing full metal weight.
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FEDERAL RESERVE BOARD ABOLITION ACT
February 3, 2009 2009 Ron Paul 14:6
In fact, Congress’ constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our nation’s founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true free-market economy.
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The Federal Reserve Transparency Act
February 26, 2009 2009 Ron Paul 20:4
The Federal Reserve can enter into agreements with foreign central banks and foreign governments, and the GAO is prohibited from auditing or even seeing these agreements. Why should a government-established agency, whose police force has federal law enforcement powers, and whose notes have legal tender status in this country, be allowed to enter into agreements with foreign powers and foreign banking institutions with no oversight? Particularly when hundreds of billions of dollars of currency swaps have been announced and implemented, the Fed’s negotiations with the European Central Bank, the Bank of International Settlements, and other institutions should face increased scrutiny, most especially because of their significant effect on foreign policy. If the State Department were able to do this, it would be characterized as a rogue agency and brought to heel, and if a private individual did this he might face prosecution under the Logan Act, yet the Fed avoids both fates.
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INTRODUCING THE FREE COMPETITION IN CURRENCY ACT
December 9, 2009 2009 Ron Paul 102:6
The first step consists of eliminating legal tender laws. Article I Section 10 of the Constitution forbids the States from making anything but gold and silver a legal tender in payment of debts. States are not required to enact legal tender laws, but should they choose to, the only acceptable legal tender is gold and silver, the two precious metals that individuals throughout history and across cultures have used as currency. However, there is nothing in the Constitution that grants the Congress the power to enact legal tender laws. We, the Congress, have the power to coin money, regulate the value thereof, and of foreign coin, but not to declare a legal tender. Yet, there is a section of U.S. Code, 31 U.S.C. 5103, that purports to establish U.S. coins and currency, including Federal Reserve notes, as legal tender.
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INTRODUCING THE FREE COMPETITION IN CURRENCY ACT
December 9, 2009 2009 Ron Paul 102:7
Historically, legal tender laws have been used by governments to force their citizens to accept debased and devalued currency. Gresham’s Law describes this phenomenon, which can be summed up in one phrase: bad money drives out good money. An emperor, a king, or a dictator might mint coins with half an ounce of gold and force merchants, under pain of death, to accept them as though they contained one ounce of gold. Each ounce of the king’s gold could now be minted into two coins instead of one, so the king now had twice as much “money” to spend on building castles and raising armies. As these legally overvalued coins circulated, the coins containing the full ounce of gold would be pulled out of circulation and hoarded. We saw this same phenomenon happen in the mid-1960s when the U.S. government began to mint subsidiary coinage out of copper and nickel rather than silver. The copper and nickel coins were legally overvalued, the silver coins undervalued in relation, and silver coins vanished from circulation.
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INTRODUCING THE FREE COMPETITION IN CURRENCY ACT
December 9, 2009 2009 Ron Paul 102:9
In the absence of legal tender laws, Gresham’s Law no longer holds. If people are free to reject debased currency, and instead demand sound money, sound money will gradually return to use in society. Merchants would have been free to reject the king’s coin and accept only coins containing full metal weight.
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The problem is the currency
21 September 1998 Texas Straight Talk 21 September 1998 verse 15 ... Cached
A limited government designed to protect liberty and provide a national offense is one that could easily be managed with minimal taxes, but it would also require that we follow the advise of the Founders who explicitly admonished us not "to emit bills of credit" that is, paper money and use only silver and gold as legal tender. We need to lay plans for our future because we are rapidly approaching a time of crisis and chaos.
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Economic crisis looms
19 October 1998 Texas Straight Talk 19 October 1998 verse 15 ... Cached
Second, Congress should legalize the Constitutional principle that gold and silver be legal tender by prohibiting sales and capital gains taxes from being placed on all American legal tender coins.
Texas Straight Talk from 20 December 1996 to 23 June 2008 (573 editions) are included in this Concordance. Texas Straight Talk after 23 June 2008 is in blog form on Rep. Paul’s Congressional website and is not included in this Concordance.
Remember, not everything in the concordance is Ron Paul’s words. Some things he quoted, and he added some newspaper and magazine articles to the Congressional Record. Check the original speech to see.