First, there was an outpouring of support from grassroots Constitutionalist activists. Within just a few days of its introduction, emails, phone calls and faxes came in from all over the State, spurred on by the online networks we had built up in anticipation of the bill being brought up. Rep. Franklin reported to us that a good number of his fellow legislators were coming up to him on the floor of the House, asking what this bill was all about, and why they were getting contacted about it by so many of their constituents.
As a result of this grassroots support, and in combination with the “grasstops” activism we had already been engaging in (personal contact with the Banks and Banking Committee and Subcommittee chairs with whom we had been developing relationships), we landed something we didn’t think we’d get, at least not so soon: a combined Financial Institutions & Services Subcommittee / Regulations & Oversight Subcommittee hearing.
Apparently, there were others who were just as surprised, and their reaction was swift, too: the most powerful bureaucrats and banking lobbyists in the State. To our surprise (and delight), the State Treasurer himself, along with the heads of the top two lobbying groups for the banking industry in Georgia, showed up to testify against our bill. They were obviously quite concerned.
They had just as obviously not bothered to read the the bill itself.
First, testimony in favor of the bill was given by Rep. Franklin, myself (Bill Greene), Aaron Krowne, Sean Mangieri, Jesse Bickel, and the well-renowned expert on using gold and silver as currency, “The Moneychanger” Franklin Sanders (who had opened a gold and silver bank in Tennessee, and paid dearly to the IRS for his impudence, back in 1984). (You can view the testimonies here, here, here, here, here, and here.)
The witnesses testified and explained to the Members of these Banks and Banking Committee subcommittees the absolute requirement of the U.S. Constitution for the State of Georgia to ONLY use gold and silver coins in its transactions, and a dialogue was begun in the best MEANS by which this should be done. These experts and Rep. Franklin explained to the Members the need to shift away from our fiat money system, and into a sound money system. The hyperinflationary end of various countries’ fiat money was explained. The fallacies of fractional reserve banking was shown, and how the system robs the inherent wealth of the American citizens. The likely complete devaluation of Federal Reserve Notes, and thus the need for Georgia to protect its citizens via returning to Constitutional Tender, was also explained.
Then the bureaucrats and banking lobbyists testified. They were concerned with cost, efficiency, and change, but it was apparent that they had not read the bill thoroughly (if at all) or with an open mind, and especially had not read the Frequently Asked Questions we had put together in advance. Dan Ebersole, who was at that time the Director of the Georgia Office of Treasury and Fiscal Services, worried that the State would have to start storing physical gold and silver right there in their office, and he’d have to load his pockets with gold and silver coins and have a bodyguard wherever he went. His “concern” made no sense, of course; our question in response was, why would his office have to store the gold physically, if the Constitutional Tender Act explicitly required that depositary banks will have to have the appropriate gold/silver backed accounts? Did his office currently have to store all of their physical Federal Reserve Notes right there in their office, too? Did he have to stuff his pockets full of hundred-dollar bills and surround himself with bodyguards now? Of course not; his office used banks, just like they would continue to do under the ConTen Act.
Mr. Ebersole also expressed his worry that he would have a hard time investing the State’s money if we actually obeyed the plain and obvious words of Article I, Section 10, and went back to using Constitutional tender. What he didn’t seem to understand is that, as the value of FRNs drops like a base-metal balloon (the dollar has already lost over 95% of its value since the creation of the Federal Reserve in 1913), all of that fiat money he had so “wisely” invested would be GONE — and the people of the State will want to know just WHO is responsible. It would be his head they would be demanding.
Next, the State’s top two banking industry lobbyists at that time, Joe Brannen of the Georgia Bankers Association and Steven D. Bridges of the Community Bankers Association of Georgia, made it very clear that their biggest worry was that, if the ConTen Act passed in Georgia, they’d have to — gasp! — change the way they do business. They might have to convert Federal Reserve Notes to legal tender gold and silver coins and vice versa; they might have to store gold and silver in vaults; they might have to hire bank security; they might have to initiate electronic transactions… the list went on and on.
We responded by asking them, “Don’t you convert legal tender FRNs to legal tender foreign currency now? How would this be any different? Don’t you keep FRNs in bank vaults now? Why should this be any different? Don’t you have security guards in banks now? Don’t you do electronic transactions now? Isn’t that what banks DO?“
In other words, as one of our folks remarked, it was largely a puerile dodge, where they pretended like we were demanding they go back to pre-19th century money handling, where there wouldn’t even be any of the conveniences of modern banks and so every single transaction would consist of gold and silver coins being physically moved around. They then made a straw man out of that and knocked it down, since they wouldn’t (or couldn’t) challenge the actual bill. In reality, the Constitutional Tender Act merely establishes gold and silver coins as standard backing for electronic money, operating in the same manner of the current banking system (except for the additional requirement of full, rather than fractional, reserves).
One more response we gave to them: we pointed out, “Georgia currently leads the nation in bank failures. Do you think that, just maybe, you might need to change the way you do business?”
Overall, our folks — most of them simply citizens of the Sovereign State of Georgia, not bureaucratic wonks or paid lobbyists — made stunningly adept & forceful presentations, while the “big guns” who testified in opposition were shown to be “shooting blanks”. Yes, there was at least one legislator that left in a red-faced huff, remarking that he wasn’t going to “waste his time” listening to this stuff; but it was just as clear that many eyes were opened that day, and it seemed that several legislators were actually impressed by the sound argumentation.
William Greene is the author of the original Constitutional Tender Act, a bill template that can be introduced in every State legislature in the nation, returning each of them to adherence to the United States Constitution’s actual legal tender provisions. He is an Assistant Professor of Political Science at South Texas College.