Gold Commission, 1982

Gary North

Aug. 29, 2012

In 1980, Jimmy Carter signed into law a bill promoted by Sen. Jesse Helms to set up a commission to study the feasibility of returning the United States to a gold standard. Anyone knew the fix was in when Carter signed it.

In 1981, a newly inaugurated President Reagan called for the commission to be appointed. It was a set-up from day one. The Secretary of the Treasury, Donald Regan, appointed the commission. Only two members were in favor of gold as the basis of a monetary standard: Congressman Ron Paul and businessman Lewis Lehrman. The only reason why Paul was on it is because House Minority Leader Bob Michel appointed him as a favor.

The Gold Commission came out against the gold standard. The report is here.

Three good things came out of the Commission.

First, the Commission recommended that the U.S. Mint set up a gold "coin" -- token -- production program. The Mint did. This is why we can buy American eagle gold tokens and silver tokens.

Second, the minority report by Paul and Lehrman was turned into a book, The Case for Gold, which remains in print. You can download it for free here.

Third, Edwin Viera's report was published by the government. Vieira has a law degree from Harvard. He is an Austrian School scholar. His report on the origin of the silver standard in 1792 shows that it is still in force. The report is here. His conclusion pulled no punches. It was also ignored by the Commission.

The simple fact is that the majority of people in the United States is not prepared to pay the exorbitant costs--of the policies that influential special-interest groups have enacted into law with- the aid of pliant politicians and functionaries at the local, state, and national levels. Resistance to increases in taxation, and even to payment of the present tax-bills, appears in everything from overt political action on behalf of tax-limitation proposals to covert expansion of the "underground economy". Under these circumstances, to continue to reward the special-interest groups that maintain them in power, the politicians and functionaries must deceive the people about the costs or the incidence of the costs of the endless "welfare"-programs, "make-work" projects, "pork-barrel" legislation, and other doles and "transfer payments" that overflow from the public trough. They accomplish this task through monetary manipulations made easy in the first place by their utter disregard of, if not contempt for, the constitutional limitations of Article I, § 8, cls. 2 and 5, and made possible in the final analysis by the cowardly refusal of the Judiciary to pay any attention to what is going on.

About the nature of the problem, there can be no serious dispute. The present monetary arrangements of the country are unconstitutional, even anti-constitutional, root and branch, and augur economic catastrophe in the not-distant future. But what can be done about it in today's climate of economic and legal ignorance, and rampant political opportunism, is anyone's guess.

Nothing was done about it. Thirty years later, we see more of the same: a call for another gold commission. But at least more Americans know of the problems with Federal Reserve money than was the case in 1982.

A history of the Commission was provided by Anna Schwartz, the Commission's main researcher. She had been the co-author with Milton Friedman of A Monetary History of the United States (1963), a pro-fiat money book. Her report is here. She died in June 2012, at the age of 96. She wrote this in the Conclusion.

The creation of the Gold Commission served one paramount objective of its sponsors. It promoted discussion of gold in the media, on television, and among a lay public committed to the view expressed in the minority report that only gold is "honest" money. The minority report itself is a rallying call for the faithful. Both Helms and Paul were committed to the immediate objective of the minting of gold bullion coins by the Treasury. As the minority report noted: "We are extremely pleased that the Gold Commission has recommended to the Congress a new gold coinage. It has been almost fifty years since the last United States gold coins were struck, and renewing this Constitutional function would indeed be a cause for celebration and jubilee." Short of the appointment of a Commission committed to restoring the gold standard, the sponsors probably view the limited results attained as a gain in achieving their ultimate objectives.