In 2017, a Colorado stream yielded these minuscule specks of gold through the process of panning. (Max McCoy/Kansas Reflector)
Some Republican lawmakers in Topeka have recently proposed bills in both chambers that aim to establish gold and silver as legal tender. These bills seek to recognize gold and silver in various forms such as coins, bullion, and even natural nuggets as valid forms of currency.
At first glance, this may seem like a joke, the type of proposal that would leave news pundits shaking their heads in disbelief and saying, “There’s money to be made in those bills.”
Wouldn’t it be amazing if we could have that kind of luck?
Once upon a time, this level of fringe was associated with individuals like anti-government extremists, paramilitary enthusiasts, doomsday preppers, or the infamous former Texas Congressman Ron Paul, who was a staunch advocate for the gold standard. However, these fringe beliefs have now become more prevalent and worrisome, and the consequences are far from pleasant.
Welcome to the year 2024, where we find ourselves immersed in a society that has embraced misguided concepts that have been brewing for decades. These ideas, born out of the decaying remnants of trickle-down economics and stagnant Tea Party libertarianism, have now gained a firm foothold. However, it is crucial to recognize that these ideas are not only lacking in intelligence, but they also pose a significant threat to our well-being.
Kansas came close to implementing a flat tax, reminiscent of the unsuccessful Brownback experiment in state economics. However, this time it was avoided as the GOP-controlled House failed to gather the necessary two-thirds majority to override Gov. Laura Kelly’s veto.
After the Supreme Court’s landmark decision in Roe v. Wade, Kansas became the first state to hold a vote on abortion rights. In August 2022, the residents of Kansas overwhelmingly rejected the proposal to remove reproductive rights from the state constitution, voting against it by a margin of about 3-2. It is worth noting that the amendment to change the constitution was introduced by the GOP-dominated Legislature.
Kansas could be a more favorable place to reside if common sense and public opinion were considered when evaluating flawed proposals. Unfortunately, there haven’t been any state referendums on significant matters like expanding Medicaid, legalizing recreational marijuana, or addressing the depleting water resources in the western part of the state. Surprisingly, these issues garnered substantial support in the “Kansas Speaks” survey conducted in the fall of 2023.
Most Kansans don’t really think about precious metals as money, so it wasn’t included in the survey. However, there are a few individuals who do ponder this topic. They may be bullion and silver round dealers, historians familiar with the complexities of bimetallism, or part of the radical fringe that blames our economic problems on fiat money.
Those two bills in Kansas, along with similar ones in various red states over the years, serve as cautionary indicators. They reflect a deep skepticism towards the Federal Reserve, the country’s central banking system, and reveal a widespread economic anxiety. In times of fear and uncertainty, people often turn to hard money as a means of navigating through challenging periods.
The pursuit of gold and silver, which would be stored in a state-run Fort Knox, as a means to outshine paper money supported by the unwavering trust and credit of the United States, should raise concerns. This topic has not received significant media coverage due to other urgent matters and the intricate nature of monetary history.
Max McCoy, a columnist for Kansas Reflector, has amassed an impressive collection of silver coins.
Money, in essence, is a medium of exchange. It is a tool that enables transactions to take place between individuals, businesses, and governments. It serves as a unit of account, allowing us to measure and compare the value of goods and services. Money also functions as a store of value, allowing us to save and accumulate wealth over time. It is a fundamental aspect of our modern economic system, facilitating trade and commerce on a global scale. Without money, the exchange of goods and services would be much more challenging and less efficient. Overall, money plays a vital role in our everyday lives, enabling us to meet our needs and pursue our goals.
Money is essentially anything that can serve as a medium of exchange. Throughout history, various forms of currency have been used, including gold, silver, tulips, cigarettes, and bank notes. For instance, in colonial America, the Spanish-minted silver coin called “Pieces of Eight” was commonly used. To facilitate transactions, the coin was often cut into eight pieces or bits, which explains why a quarter is still referred to as two bits today.
The U.S. monetary system traces its origins back to a bimetallic standard, where the value of gold was 15 times higher than that of silver, as highlighted in a Congressional Research Service report. However, due to the global preference for gold, most of our gold was sold to other countries, leaving us with a de facto silver standard. In 1834, changes in the exchange rate and the discovery of new ore deposits led to a decline in the value of gold, resulting in a decrease in circulating silver. During the Civil War, the government transitioned to a fiat money standard, not backed by any precious metal, but later returned to a bimetallic standard within a few years. The gold standard was adopted from 1900 to 1933, during which the government nationalized the gold supply and prohibited private ownership for an extended period. From 1934 to the 1970s, a quasi-gold standard was in place, but it was eventually abandoned as it became challenging to maintain a fixed link between the currency and the value of gold.
Ever since then, fiat money has been in circulation.
The bills currently being proposed in Kansas reflect the same concerns and uncertainties that have plagued society in the past. This ongoing battle between the wealthy and the general population is reminiscent of historical struggles. In fact, it brings to mind the famous “Cross of Gold” speech delivered by William Jennings Bryan at the 1894 Democratic convention in Milwaukee. Bryan’s powerful political appeal continues to resonate in American history.
“There are two contrasting ideas when it comes to government,” Bryan declared. “Some believe that by enacting legislation to benefit the affluent, their prosperity will trickle down to those beneath them. However, the Democratic notion is that by implementing policies to uplift the masses, their prosperity will permeate through every social stratum built upon them.”
I’ve never been a big fan of Bryan, as he was a religious extremist whose influence dwindled after his display of ignorance during the Scopes trial. However, I must give him credit for his political beliefs, as he understood the risks associated with concentrated wealth.
The allure of precious metals has a tendency to captivate individuals. Take, for instance, Lamar Hunt, the owner of the K.C. Chiefs and various other ventures, who, during the 1980s, made an ambitious attempt to control the global silver market. Unfortunately, his endeavor ended in bankruptcy when the market unexpectedly crashed. On a different note, there are the ever-optimistic metal detectorists who find joy in discovering pre-1965 quarters and dimes, when U.S. coins were still made with a substantial 90% silver content.
I must admit that I fall into the latter category, as I have enthusiastically convinced my wife, Kim, to join me in exploring countless old parks and playgrounds across eastern Kansas, all in pursuit of the elusive treasures that may lie beneath the surface. While we did manage to uncover a fair share of old coins during our years of treasure hunting, our collective findings never amounted to more than a hundred dollars in value. Nevertheless, this pastime proved to be an enjoyable way to spend our summer afternoons. Curious as to why our discoveries were limited, Kim pointed out two factors. Firstly, she believed that my impatience hindered my ability to be a truly skilled treasure hunter. Secondly, she suggested that our frequent visits to playgrounds were not the most fruitful endeavors, as children tend to have minimal amounts of money to lose.
When we ventured into the mountains of Colorado in search of gold, we did manage to find a small amount. However, the endeavor proved to be incredibly challenging and required a specific set of skills. Despite our efforts, the financial reward fell short, barely surpassing the minimum wage. It became evident that those who excelled in this field were the ones willing to undertake the laborious task of moving vast quantities of earth. Unfortunately, it seemed that prospecting was not a suitable occupation for me.
William “Coin” Harvey was perhaps one of the most economically anxious individuals in American history. Despite the Free Silver cause being lost, he remained a staunch advocate.
Harvey, an author and political activist, held the belief that the key to American prosperity lay in the unrestricted conversion of silver into currency. As a result, he dedicated himself to campaigning for Bryan. However, in 1900, Harvey’s disillusionment with politics grew, prompting him to purchase land near Rogers, Arkansas, with the intention of establishing a resort. As his pessimistic outlook on the world intensified, he devised a unique plan to create a pyramid-shaped monument that would serve as a time capsule, preserving knowledge for future generations.
According to Oliva Paschal in 2011, in Latham’s Quarterly, the pyramid represented Harvey’s final attempt to impart his wisdom to the world. He believed that although his ideas did not gain traction during his lifetime, they would eventually benefit future societies on the path to modernism. Paschal noted that the era of free silver and Populism had come to an end.
Harvey, who passed away in 1936 at the age of 84, was unable to complete his pyramid.
In a span of three years, the U.S. Army Corps of Engineers took the initiative to dam the White River, resulting in the flooding of a significant portion of Harvey’s resort, Monte Ne, which was situated below the newly formed Beaver Lake.
Harvey may not be widely recalled today, but I have a hunch that he would strongly support the adoption of gold and silver as legal tender by states. Interestingly, Kansas lawmakers are currently considering this idea, while Texas has already established a bullion depository.
The Texas Comptroller’s official website states that the depository is situated approximately 30 miles from Austin and operates as an agency of the state. It has been accessible to any U.S. citizen or resident since 2018, with future plans to accommodate depositors from other countries.
According to a recent update by the Houston Chronicle in 2021, it was revealed that the depository had not been successful, with only a small number of people using it. Moreover, the state had to bear the high costs of running the facility.
The Kansas legislation proposal also includes the establishment of a gold depository, which will be managed by a third party. Additionally, the state treasurer will be granted the power to regulate the state’s digital asset-backed gold currency system. However, the House bill has faced opposition from the Kansas Bankers Association and the Kansas Credit Union Association. These organizations have expressed concerns about the potential complexity of the system and how it may conflict with federal banking regulations.
This proposed legislation may seem like a promising opportunity, but upon closer examination, it becomes evident that it is nothing more than a deceptive illusion.
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