By Rudi Keller | Columbia Tribune | May 17, 2012
JEFFERSON CITY — In a debate that has roots in Jacksonian monetary theory, the Missouri Senate yesterday considered how to make gold and silver coin into real money again.
In a bill that tried to exempt gold investors from capital gains taxes, Sen. Chuck Purgason, R-Caulfield, also sought to create a new way to use the value in investors' hoards without actually selling the coins.
The distrust of central authority behind President Andrew Jackson's fight in the 1830s with the Bank of the United States has risen again in the backlash against the Federal Reserve. Purgason's bill would create "non-bank depositories," regulated by the secretary of state, where the value of deposited gold and silver could be used via debit card.
Purgason was unable to explain exactly how it would work before opponents began questioning the bill.
"That is the gold standard," said Sen. Joe Keaveny, D-St. Louis.
"That has nothing to do with that," Purgason replied.
The most scathing attack on the bill came from Sen. Kevin Engler, R-Farmington. "If you listen real close, you hear the black helicopters. They are coming over the Capitol," Engler said. "This is spooky."
Almost 180 years have passed since Jackson killed the central bank and made payment in specie — gold and silver coin — supreme. The affection for what was known as "hard money" has deep roots in Missouri, and U.S. Sen. Thomas Hart Benton was known as "Old Bullion" for his efforts alongside Jackson.
Purgason's bill has had a troubled history. It originated in the House, sponsored by Rep. Paul Curtman, R-Pacific. It failed on its first House roll call, 81-42 — 40 members failed to answer the roll — and passed 95-37 on a second attempt as 31 members remained out of the chamber.
The bill amended a law that has remained unchanged for more than 100 years, declaring that U.S. silver coin must be taken at face value. The law's provisions also refer to a half-dime, a coin that has not been minted since the 1850s.
The problem, Purgason told his colleagues, was that many people who buy gold and silver bullion coins want to retain ownership but also have a way to use some of the value when they need money.
The U.S. Mint has been making gold and silver bullion coins for investors since the mid-1980s. For many years, gold traded at about $300 an ounce and silver near $7, but in recent years, the price has soared, with gold currently near $1,550 an ounce and silver at $27.25 yesterday afternoon.
Those investor coins have a stated value — $50 for a 1-ounce gold coin — and legally may be spent for that amount. Older U.S. coins with precious metals may be legally spent for their face value but are worth far more if sold for their metal value.
"It is something you can't actually use until you sell it," Purgason said.