Gold as Legal Tender in Utah… and Montana?

Tim Iacono

Gold has now become legal tender in Utah after Governor Gary Herbert reportedly signed off on the Utah Sound Money Act last week, meaning that, while 7-11 clerks are now required to accept gold coins in exchange for Slurpees, they may only do so at face value and, for some, Slurpees could become very expensive. The real impact of the bill will be seen when state residents take their gold coins to a coin shop and receive about 30 times their face value in U.S. dollars, these profits no longer needing to be reported as capital gains in Utah, though, Washington D.C. will still want 28 percent.

Here in Montana, the legislature has rejected a similar bill as detailed in this AP reportappearing in the local Bozeman Daily Chronicle the other day, what comes as something of a disappointment to me and not just because of buying Slurpees.

The state House rejected a plan Tuesday to have Montana do some of its business by electronically trading gold rather than exchanging dollars — a plan either lauded as a first step toward an “honest” money system or ridiculed as another conservative move toward state secession.

The plan failed in a 52-48 vote, as 20 Republicans joined 32 Democrats in opposing a measure that shifted attention away from stated Republican leadership priorities, such as cutting the budget.

Republican Rep. Bob Wagner of Harrison said his proposal would require the Montana state government to trade with some taxpayers and contractors in units of gold, starting with those who pay taxes on tobacco products. Supporters say the new currency exchange would be “separate and parallel” to the traditional exchange of federal notes.

Supporters argue that the measure has nothing to do with secession. They say the federal currency is doomed without sound backing and states can help push the system back to a gold standard by unilaterally trading in gold.

You hear that more and more these days in state legislatures – about the U.S. currency, in its current form, being doomed. That can’t be a good thing.

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