Will Arizona become the second U.S. state to approve Gold and Silver as a legal form of currency? The Arizona Senate approved State Bill 1439 and the bill will go to a vote in the Arizona House.
The State of Utah is the only other state that officially recognizes gold and silver coins as a form of legal tender. Governor Gary Herbert signed the bill into law in March of 2011, recognizing federally issued gold and silver coins as currency. In the State of Utah the law is now known as the Sound Money Act. In 2012, the number of U.S. states that were considering or had legislation pending to recognize gold and silver coins as legal tender was as high as 13 at one point.
When the Arizona Legislature moves to enact State Bill 1439 and Governor Brewer signs it into law, it would mean that any coin that is issued from the U.S. government, and contains gold or silver could be used for the payment of taxes and debts, which is the definition of legal tender. The law would also state that it could not be taxed as property, since it would now be considered money. If Arizona does pass the state bill, it would become effective in the year 2014. And although it would be considered a new currency in the state, nobody would be forced to accept gold or silver as payment.
Other states, including Virginia, South Dakota and Indiana all have similar bills, but have seemed to have either died in the in the State Assembly or were buried in Senate Committees. Some still see the move as a step that would undermine the U.S. dollar.
Many supporters of precious metals feel that the central bank is permanently damaging the value of the our currency by printing trillions of dollars and pumping it into the economy, which they feel is destroying the buying power of the greenback. Many have put that allegation squarely on the shoulders of Federal Reserve Chairman Ben Bernanke and the government's financial policies.
The question that arises is, why states are looking to take this course of action? The Utah bills name may very well sum it all up, the sound money act. What many people do not remember and for good reason is that in 1779 the United States defaulted on the Continental and again in 1862 with the Greenback. So it would be hard to say that it is has never happened before, when history would tell us something different.