The Utah Legislature on Thursday passed a bill allowing gold and silver coins to be used as legal tender in the state — and for the value of their precious metal, not just the face value of the coins.

In a previous posting on this blog it was noted that the lower chamber of Utah’s government, the Utah House of Representatives, had passed the legislation referred to above, but at that time there seemed to be little information pertaining to the reasoning behind the passage of such legislation. The article cited above is quite informative in its coverage of this unfolding situation. To quote further from the aforementioned article:

The legislation directs a state committee to look at whether Utah should recognize an official alternate form of legal tender which could become a path for creating a formal state gold standard.

A spokeswoman for Gov. Gary R. Herbert, a Republican, said he has not yet taken a public stance on the bill.

State Rep. Brad J. Galvez, the chief sponsor of the measure, said he views it as a preliminary step on the path toward securing Utah’s business climate.

“If the dollar continues to fall, what this will do will help stabilize the value of the dollar in Utah, so it helps stabilize the economy,” Mr. Galvez, a Republican, said.

While similar legislation has been proposed in nearly a dozen states, Mr. Galvez said that if Mr. Herbert signs his bill, Utah will be just the second state to official recognize the coins as legal tender. Colorado has recognized gold and silver for decades, he said.[sic]

Those reading this posting are encouraged to click on the hyperlinks above to read the text of this article in full.

Clearly, Utah is not the only American State that is taking monetary measures with an eye toward maintaining a comparative advantage in the national and international business markets along with a healthy State economy. It will be interesting to see what position will ultimately be taken by the Governor of Utah as his stance on the issue has yet to be discerned as of the time of the writing cited above. Issues involving the currency within States can have tremendous ramifications and it would appear that due consideration is being taken.

The article was also notable for this blogger as it elucidated a thought from a legislator in Virgina who is advocating for similar legislation in that State. To quote further from the article by Stephen Dinan:

In Virginia, Delegate Robert G. Marshall, a Republican, successfully pushed through a bill — not yet signed by the governor — that authorizes the state to mint gold, silver and platinum coins. He said that there is probably a good market for collectors who would prefer not to have to buy federally minted coins and said state-minted ones would create a backstop against inflation.

“I’m looking at Congress, and I’m looking at what the Chinese are doing, and I don’t have a lot of confidence in what’s going on there,” Mr. Marshall said. “This is one way where Virginia can help our citizens as a security hedge against the inflationary action of Congress.”

This was an interesting insight for this blogger because it provides hope that more legislators on the State level are looking abroad when formulating policies which are designed to have a direct impact upon the lives of State Citizens. Although the United States Federal government’s enumerated powers provide wide latitude in matters of an international character, some international trends can have a significant economic impact upon the economics of a purely intrastate nature. Therefore, in the world in which we now live even legislators at the State level must have an eye on the evolving business and economic dynamics of countries as far geographically afield as Thailand, China, or any of the Association of Southeast Asian Nations (ASEAN) Member states in order to make fully informed decisions regarding the enactment of legislation which could impact those within that legislature’s jurisdiction.

As noted in the quotation above, the Governor of Virginia has yet to sign the legislation pending in that State. Therefore, the ultimate outcome remains to be seen, but one thing remains clear: few lawmakers are taking this legislation lightly as evidenced by the alacrity of these legislatures’ votes and the taciturn position of these States’ respective Governors.

This issue is coming to the foreground of the national political spectrum at a time when the legal issues surrounding the issue of same sex marriage and interstate Full Faith and Credit Clause interpretation versus the Federal-State sovereign relationship in the context of same sex marriages legalized and solemnized pursuant to the laws of sovereign American States is coming to the attention of the United States Federal Appellate Courts in the form of cases which have the potential to directly contravene the provisions of the so-called “Defense of Marriage Act” (DOMA). In an American Immigration context, Federal legislators such as Representative Jerrold Nadler of New York have continued to push legislation such as the Uniting American Families Act (UAFA) which would allow the United States Department of Homeland Security and the Department of State to adjudicate petitions for same sex “permanent partners” of United States Citizens and Lawful Permanent Residents in the same manner as different sex couples.  How the issues associated with legal tender reform and the issues associated with Full Faith and Credit for State recognized same sex marriages will be resolved remains to be seen, but clearly such issues will remain noteworthy as time goes on.

For information related to these issues please see: US Visa Thailand or Same Sex Visa.