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To: Hornitos
I wonder if they could just claim the coins are “non-legal tender”

No reason to. The constitution defines gold as the only legal tender.

69 posted on 11/16/2007 12:32:50 PM PST by editor-surveyor (Turning the general election into a second Democrat primary is not a winning strategy.)
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To: editor-surveyor
The constitution defines gold as the only legal tender.

Not true. The Constitution defines gold and silver as real money.

"Legal tender" is another thing entirely, and here we get into terminology and legal semantics. Legally speaking, "legal tender" = "forced tender". It's when a government says, "I, the government, am telling you that this piece of paper, although it is not made of precious metals (ie. real money) nor backed by precious metals, is as good as gold and silver specie. I say it is money, and it is to be used as money for all debts public and private. And that's the law, which I will back up with my police and military power."

For hard money advocates, who -- incidently -- have the Constitution to back them up, legal tender is an abomination. For fiat money advocates, legal tender is how business is done in the world.

The Gold and Silver Clause of the Constitution came out of a terrible mess that pretty much wrecked the Articles of Confederation. Our first national currency was the Continental Dollar, a piece of paper that was defined as legal tender and was supposed to be backed by one Spanish Milled Dollar each. Of course, the infant US didn't have enough Spanish Milled Dollars to back the currency, so it became a fiat currency. Patriotic Americans were supposed to accept Continental Dollars for commerce, and most did. However, many preferred to deal with the British Army because those guys paid in gold and silver, not paper.

Once the Revolution ended and British troops sailed home, the Continental Dollar was discounted and began to fail as a currency. Commerce collapsed and states beggared each other via tariffs to raise the money necessary to pay off their war debts. One of the core issues of Shays' Rebellion in Massachusetts was the issue of whether creditors could be forced to accept Continental Dollars in payment. With a weak Confederation government and no official coin of the realm, the Bank of North America collapsed and financial chaos reigned. The Constitutional Convention was the result.

The Constitution defined gold and silver as real money. The Coinage Act of 1792 set the relationship of gold and silver to the dollar, and standard coins of gold, silver and base metals were to be minted. "Legal tender" was something the Framers wanted to avoid, thanks to their recent experience with a fiat currency.

106 posted on 11/16/2007 1:32:22 PM PST by Publius (A = A)
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To: editor-surveyor
The constitution defines gold as the only legal tender.

Cite?

133 posted on 11/16/2007 4:00:05 PM PST by DeaconBenjamin
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