P.O. Box 656, Sparks, Nevada 89432
775-352-8262, fax 775-356-0727
www.nevadafullstatehood.orgJune 18, 2003
For Immediate Release
Solution to budget "impasse" proposed.
The Nevada Committee for Full Statehood has sent Governor Kenny Guinn a way around the present budget "impasse".
"The 'impasse' is easy to solve," said "Chris" Johnson of Elko, Chairman of the non-partisan Nevada Committee for Full Statehood.
"All the 'alternatives' of the Regular and Special Sessions were not thinking 'outside the box'," explained Johnson. "All legislators heard were plans to tax the other guy and protests from the other guy".
"That scenario was destined to fail--there was no basis for common agreement," said Johnson.
"The Nevada Silver Coin Bill is a workable solution. It does not involve re-opening the budget. All that is necessary is for the new taxes to be held in abeyance so long as the Nevada Silver Coin Bill produces enough revenue to pay the bills," said Johnson.
"Gaming's tax rate would not go up and might even be reduced under the plan," explained Johnson. "In effect, gaming could "pay its taxes" by pushing silver coins on tourists," Johnson, an Elko businessman stated.
"Any new tax, whether on gaming, banking, business or sin, takes money out of the economy. It reduces business profit and therefore the capitalized value of all Nevada businesses and depletes the loan reserves of all Nevada banks--all of which is bad for the economy," explained Johnson.
"The Nevada Silver Coin Bill, by comparison, puts money into the economy in the process of providing funds for the government expenditures. Putting more money into the economy increases the profit of Nevada businesses, which results in increased deposits in Nevada banks and reduced expenditures for welfare payments by providing more jobs," said Johnson.
"Additionally, the secondary effect of stimulating the economy with more money is that it increases revenue from existing tax sources such as sales tax. A conservative model of the effect of the Nevada Silver Coin Bill showed that there would be more new revenue from existing tax sources than was made by the original issuance of the coins: And this revenue would continue from year to year," concluded Johnson.
"It would be an easy matter to adapt the Nevada Silver Coin Bill to meet the present budget 'impasse': No re-opening of the budget would be necessary; the collection of the new taxes would be held in abeyance so long as the issuance of the coins (and the added tax collections) met the needs of the approved budget.
Gaming’s tax rate could even be reduced, not increased, under this plan. In effect, gaming could "pay its taxes" by pushing silver coins on tourists," stated Johnson.
"There is support for the Nevada Silver Coin Bill in both houses. (See letter to Kimberly Morgan attached.) If the Coin Bill is used as a way out of the present impasse, it will help make Nevada a "100% State", by assuming local control of some of Nevada’s local purchasing power. Are you interested in examining this means as a way out of the present 'impasse'?"
"I would be happy to meet with you or with others of your designation to discuss these matters," stated Johnson.
"Are you interested in examining this alternative?" Johnson asked the Governor.
"The Nevada Committee for Full Statehood awaits your response," concluded Johnson.
Respectfully submitted,
O.Q. "Chris" Johnson, Chairman
Nevada Committee for Full Statehood
For further information contact: "Chris" Johnson, Chairman, Nevada Committee for Full Statehood, (775) 738-3881; Janine Hansen, Executive Director, Nevada Committee for Full Statehood, (775) 352-8262; or Glade Hall, (775) 324-6447
For information on the Nevada Silver Coin Bill see the Legislative web site at:
(HTML) www.leg.state.nv.us/72nd/bills/AB/AB532.html
(PDF) www.leg.state.nv.us/72nd/bills/AB/AB532.pdf
(See attached letter to Kimberly Morgan following):
OPEN
October 23, 1992
Kim Morgan
Legislative Counsel
Bureau
Capitol Complex
Carson City, Nevada 89710
Dear Kim:
Thank you for your call in which you said you will be drafting, at Joe Dini’s request, an up-dated version of the Nevada Silver Coin Bill.
Here is the legal basis for the bill:
The Bill corrects a violation of the United States Constitution as well as providing Nevada with a non-tax source of government revenue.
Two provisions of the U.S. Constitution are involved: Article I, Section 8, Clause 5; "The Congress shall have power…To coin Money (and) regulate the Value thereof…" and Article I, Section 10; "No State shall…coin Money, (or) make any Thing but gold and silver Coin a Tender in Payment of Debts;"
These two provisions are the mechanism by which the power to issue money, which inheres in the Sovereignty of the State, was delegated by the individual States, in the Constitution, to their common agent, the Congress. There is no question but what these two provisions intended precisely that delegation. They are clearly stated.
In order to see the legal basis for the opportunity that Nevada has with the Nevada Silver Coin Bill, it is necessary to examine what happened since the States agreed to give to Congress their power to issue money.
In a nutshell, thirteen Nations won their nationhood, and were recognized by the Treaty of Paris, in which "the State (nation) of Great Britain" recognized her thirteen former colonies as "Free, Sovereign and Independent States (nations)." If fewer than nine of these new Nations had agreed to the terms of the Constitution, all powers of each of the thirteen sovereign Nations, including the power to issue money, would have remained where those powers originated—with each State (Article VII, U.S. Constitution).
When nine, later 13, States agreed to the Constitution, the delegation of the power to issue money to the Congress was complete.
However, in stead of going by the Constitution, which directs the Congress to issue the money, the Congress has done something else—surrendered the power to issue money that it got from the States to a consortium of private bankers (the Federal Reserve Corporation). Nowhere was this surrender agreed to by any State from which the Congress obtained the power to issue money. The Constitution said one thing; the Congress did something else.
It is this violation of the Constitution that the Nevada Silver Coin Bill addresses.
The State of Nevada has the power, and the duty, to "support this (U.S.) Constitution" by putting down violations of the Constitution within its borders. The legislature speaks for the State "in its highest sovereign capacity" (See Report of the New York Legislature, 1833, reprinted pp. 550 ff., Vol. II of the 1918 Annual Report of the American Historical Association). Each State officeholder also is sworn "to support this (U.S.) Constitution" (Article VI, par.3).
When violations occur, the State is not the hapless and helpless victim of the agent it created with its sister States. As a Principal to the Constitutional Compact, Nevada has all of the powers of the sovereignties that were recognized by the Treaty of Paris, having been brought in "on an equal footing" with the 13 original Nations.
This status as a Sovereign State creates the responsibility for correcting Constitutional violations within the boundary of the State. When the Constitution is violated by an agency, such as the Congress, the State, "whose creature it is…must take such measures to redress the injury done to the Constitution as the exigency may suggest and prudence justify" (Federalist No. 33).
The Nevada Silver Coin Bill is such a measure. It provides for the resumption by Nevada of a portion of her power to issue currency unless and until the Congress wakes up to its responsibility under Article I, Section 8, Clause 5, and starts issuing all of the money. When that happens, the Nevada Silver Coin Bill provides that the coins issued by Nevada, in protest to and in correction of the Constitutional violation, may then be retired (Sec. 3).
The Nevada Silver Coin Bill gives Nevada an opportunity to defend and restore the Constitution, while at the same time, raising millions of non-tax dollars for Nevada and stimulating our economy.
Attached are a photocopy of pp. 91 ff. of Col. Roberts’ book "The Most Secret Science" and two Bulletins of the Committee to Restore the Constitution that relate to this proposal. They can by summarized as follows:
"The Most Secret Science"
The power to issue money is the supreme prerogative of government (p. 92); this power has been taken over by private banking interests, which supply debt money (p. 93). Debt money does not serve the needs of a free-enterprise economy (p. 94).
U.S. Notes are the direct issue of the Congress and are interest free; their use, starting in Lincoln’s Administration, has saved the American economy billions of dollars in unnecessary interest charges (p. 95).
The use of a debt money system compels the issuance of money that is based upon debt, and socialist, unconstitutional schemes are the result, because they create the federal debt that is needed to support the issuance of more and more debt money (p. 96). The reversal of this trend requires the issuance by the Congress of the United States Notes to replace Federal Reserve Notes. The development of Local Control of Local Purchasing Power helps insulate a State’s economy from outside manipulation (p. 97).
The baneful effects of creeping socialism can be impeded by restoration of U.S. Notes as the circulating medium (p. 97), and can be accomplished by a simple amendment of the present U.S. Code (p. 99). The restoration of money issued by the Congress will balance the federal budget and force interest rates down (p. 100).1
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1 While the logic of this description is correct, we know from recent experience that the conclusion is flawed (that interest rates can come down only if the federal budget is balanced). Our current budget, with a bigger deficit than ever before in our history, has been accompanied by the lowest interest rates in over 20 years. This fact demonstrates that interest rates (and also much of the "value thereof" of our currency) are arbitrarily fixed by the Federal Reserve System. The Silver Coin Bill can help to place that control back into the hands (the Congress) that the Constitution directs, where it can be regulated (and stabilized) by statutory enactment. Keeping interest rates down for an extended period of time is one way to get the economy moving. The recent reduction of interest rates on a temporary basis (particularly when it has been accompanied with an increase of the capital requirements of the commercial banks, which prevents their making loans of any kind), will not have the desired effect of stimulating the economy, because (1), it is temporary, and cannot be the basis of long term planning or investment, and (2) it is countermanded, even in its immediate effect, by the requirement of increased capital for bank loans, which prevents the banks from putting more bank credit into the economy, and in stead, requires them to pull bank credit (purchasing power) out of the economy, thus deepening the recession, not relieving it.
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September, 1986, CRC Bulletin; Position paper of Nevada in issuing a one-ounce, twenty dollar legal tender coin:
The power to issue money inheres in the sovereignty of the State and was delegated by the States to the Congress on condition that the Congress, not a privately owned central bank, issue the money (p. 1).
The surrender by the Congress to the Federal Reserve Bank of the power to issue the money is a breach of the Constitution and an unlawful usurpation of the power that belongs to the State (p. 2); it is the State’s responsibility to correct the infraction (p. 2).
Nevada has previously used its legislative power to correct a Constitutional infraction and can use the same legislative power to force the Congress to resume its Constitutional obligation to issue our money. This power the Congress received from the States under Article 1, Section 8, Clause 5 of the Constitution (p. 2).
The form of currency selected by Nevada would result in approximately $15 profit per coin (p. 2) (over $37,000,000.00 on the monetization of 2.5 million ounces of silver; more as the issues are extended) and would continue in circulation until Congress resumes its duty of issuing the money under the Constitution (p. 3).
July, 1988, CRC Bulletin:
The constraints of the Debt Money System have caused congestion of the American population in urban areas. The issuance of a Nevada Silver Coin will promote the development of Nevada's economic autonomy and the expansion of her credit-creating capabilities; development of other sources of local credit will tend to reverse congestion of population in urban centers by making more purchasing power available where our natural resources are located. (pp. 2,3). The Nevada State Coin may prompt the Congress to resume control of the nation's currency, which will balance the federal budget and stimulate the economy (p. 3). The encouragement of "community" banks and the establishment of a state owned and operated commercial bank, patterned after the Bank of North Dakota, will increase the capital formation capabilities of Nevada and develop the State's resources (p. 4).
Basically, if one looks at the two Constitutional provisions that deal with money, and assumes that the Constitutional provisions are being carried out, then, yes, Nevada would be prohibited from issuing a legal tender silver coin. But that assumption is not correct. In stead, the Constitution says one thing and the federal agencies do something else-- they violate the Constitution by failing to carry it out. If they weren't violating the Constitution, there would be no Nevada Silver Coin Bill. Far from violating the Constitution, the Nevada Silver Coin Bill enforces the provisions of the Constitution by correcting a violation within the boundaries of Nevada. This correction is something that Nevada not only has a right to do, but it has the duty to do.
In addition, the Nevada Silver Coin Bill will do each of the things listed on page 5 of the Report: raise non-tax revenue; improve reserves of Nevada banks; reduce Nevada's interest burden; stimulate Nevada's economy; advertise our Silver State; improve the market for Nevada silver and prod Congress to correct a serious violation of the U.S. Constitution.
After you have reviewed this material, it would be a good idea to meet to discuss any remaining doubts there may be about the right/duty of Nevada to "support" the Constitution by enforcing it.
Very truly yours,
David Horton
Enc. Draft of Nevada Silver Coin Bill
Extract, "The Most Secret Science"
Sept. 1986, Bulletin of the Committee To Restore the Constitution
July 1988, Bulletin, Report on Nevada Silver Coin Bill
Cc: Speaker Dini