Harwood backs ‘sound money’

BOISE – If one North Idaho lawmaker has his druthers, Idaho residents will be able to pay state taxes with gold and silver.

“A lot of people are putting gold and silver in their portfolios right now,” said Rep. Dick Harwood, R-St. Maries. “It makes sense to broaden the uses of them.”

With the weakening dollar, Harwood is one of a number of state legislators around the country working on similar gold and silver legislation. He and others want to base currency on “sound money,” or money that has intrinsic value. The dollar, on the other hand, is a federal note based on debt, he said.

Gold and silver, however, aren’t currently legal tender in Idaho, according to Dan John, tax policy manager for the Idaho State Tax Commission.

“You would have to determine what is the value, how do you get rid of it … there are a myriad of issues that would be have to be discussed,” John said.

Harwood said he’s interested in presenting his bill to Idaho lawmakers to see what their reaction is to the proposal. “It probably won’t go anywhere, but I want to put it in the public consciousness as a possibility,” the third-term representative said.

So far, he has not talked to other legislators about the bill. But at least one North Idaho legislator is skeptical.

“I would have to look at the proposal before I can say anything, but it doesn’t sound promising,” said Rep. Mary Lou Shepherd, D-Wallace, who is in the same district as Harwood. “I’ve never heard of anything like that ever.”

The basis for Harwood’s interest in the possible bill comes from a similar plan in the New Hampshire General Court that has been proposed over the past two years. Several lawmakers there – in a Legislature with 400 representatives and 24 senators, the largest in the country – introduced a set of bills that would allow gold and silver to be used for transactions between the state and individuals or businesses.

One bill, in 2003, proposed the state of New Hampshire mint and bring into circulation $50 million worth of gold and silver coinage.

Pamela Walsh, a spokesperson for newly appointed New Hampshire Gov. John Lynch, said, “There are a number of pretty crazy legislators in this state. You can’t take all of the bills they propose seriously.”

But former New Hampshire Rep. Henry McElroy, one of three original legislators who came up with that state’s plans, said the intent of the proposals is to “stabilize the state’s economy and, ultimately, the nation’s economy by getting other states to adopt similar measures.”

Safety issues around counterfeiting are another reason for the proposal, McElroy added.

“Gold and silver are much harder to manipulate than paper money,” he said. “Can they be manipulated? Yes, but it is much harder. They are sound money.”

But New Hampshire, according to McElroy, hasn’t made a decision on the bill – discussion will continue later this year – and neither has any other state. McElroy said lawmakers in other states, including Virginia and Alaska, also are interested.

In the words of Harwood, however, “New Hampshire is known as being always out there, for doing things differently.”

So, why should the Idaho Legislature consider a comparable action?

Harwood, whose district includes the Silver Valley, thinks it might stimulate the area’s economy. When asked in what form that stimulation could come, he said, “Well, I am not sure, but every little bit helps.”

Added Harwood: “And gold and silver have become a popular thing to invest in.”