[hanamizu]

I used to show my students a silver certificate where if you read the note carefully says the U.S. will pay the bearer one dollar in silver on demand. The F.R. Notes promised payment in ‘lawful money’. Back in the primitive times when real money was gold and silver and paper was just the government’s promise to pay in the real stuff.

[Oatka]

I used to show my students a silver certificate where if you read the note carefully says the U.S. will pay the bearer one dollar in silver on demand. The F.R. Notes promised payment in ‘lawful money’.

Up until the '30s, paper "money" was just a warehouse receipt, sounding almost like God, "This certifies there has been deposited in the Treasury of the United States of America X dollars in gold coin, payable to the bearer upon demand"

During the Carter years, one guy sent in a $20 bill and demanded it be converted into "lawful money". They sent him two $10 bills. He raised Hell, to no avail, and said that getting two smaller IOUs for one large one wasn't lawful money. The Supreme Court disagreed. The Feds quickly changed the note to say "This note is legal tender for all debts public and private".

i.e. "This IOU is money cuz we say it is." Works OK as long as this doesn't occur.

or this: