Legal Writing On Various U.S. Currency
GoldFinger1969
Posts: 1,908 ✭✭✭✭✭
I like to study monetary history -- yup, read Friedman & Schwartz' magnus opus in college 
-- and doing some readings the last few years or so with books spanning the gold standard to the 1921 Recession and The Great Depression.
The changes in the writings concerning gold, silver, and legal tender are fascinating. Even as a young collector (or spender of bills ! ) I never really paid too much attention to them but you can see there are big differences and the changes over the years WERE important.
Here's a Gold Certificate, and the seal writings clearly state you are entitled to Gold...and the writing at the bottom of the obverse says gold coin (Eagles, DEs, etc.)
Notice that it is good for ALL DEBTS with no exceptions.
Next we have a United States Note (Red Seal) which states it is legal tender....for all debts public and private.....but then says "except duties on imports and interest on the national debt."
Why these obscure exclusions ? Because the Treasury didn't want a gold drain out of the U.S. so NOT allowing these to be used for duties on imports and interest on the national debt helped towards that goal.
Next up, a 1928 Federal Reserve Note which says that is was redeemable in gold...on demand....at the U.S. Treasury (so you had to goto Washington, DC I guess) or of the Federal Reserve Banks. I need to do more work on why this was written this way.
What I find interesting is that at 1st glance this bill looks like a hybrid: it's a FRN...it's worth $20 dollars ("bearer on demand" language at bottom)...but it has the quasi-gold certificate language above the seal. But while you could get gold at the Treasury, it's unclear if the FRB's that you went to could pay you off with gold or a pair of $10 bills at their choice... or your choice. Again, unless Federal Reserve Bank means a MEMBER bank, then FRB means you would need to goto 1 of the 12 actual physical locations which would be a PITA.
Lastly, after we went off the Gold Standard we have this **FRN **which says that the note is legal tender for ALL debts public and private with no exceptions regarding national debt or imports.
I guess "redeemable in lawful money" (isn't this bill lawful money ?:D ) means a pair of $20's and a $10 bill. Also known as....change !!
Comments
The payment clause on a banknote is essentially the definition of the how the banknote can be used and predates U.S. Federal issues. It addresses the with whom, when and how the currency may be used.
The clauses found on various U.S. notes evolved since the Civil War in response to monetary needs and conditions of the times. New types of currency were conceived and issued to accommodate changing needs and conditions. National Banknotes evolved directly out of the state banknote systems used in various states. Fractional currency was issued out of a need for change or coins for everyday commerce. Silver Certificates and Treasury notes were issued later in response to mining interests and production factors. Each had their own purpose and place in the monetary system.
Reading about the history of the legislation that created these different types of currency gives one an overall understanding of how our currency evolved and why so many different payment clauses.
love the notes to
I always loved the anti counterfeiting warnings on the old notes below the legalese on the payment clause
"any paper made in imitation of the Paper..."
So one could be prosecuted for possession of paper "made in imitation" of currency paper. What if the paper in question was banknote paper made for another use or country? Big grey area. I wonder if anyone was ever prosecuted for possession of banknote paper alone because it was too close to U.S. banknote paper.
The Gilbert Paper Company out of Menasha Wisconsin manufactured security paper for the Japanese government to use in printing paper money before winning a contract and manufacturing security paper for the United States.
Great info all around.
I wasn’t aware of Gilbert paper, and just thought Crane was the sole supplier.
Is Gilbert still making paper for our currency?
30+ years coin shop experience (ret.) Coins, bullion, currency, scrap & interesting folks. Loved every minute!
No. Their security paper was used to produce certain 1963 and 1963A $1 FRNs, and later they were bought up by Mead Paper Products.
I believe that "lawful money" was a reference to (before 1934) coins composed of silver and gold, and (after 1933) silver coins alone. Paper currency was payable in "money", which had the interesting consequence of the Fed not having to redeem a $10 bill for cents or nickels due to the fact that according to federal law, only silver, gold, and paper money are legal tender. Now that applies to all coins. You must then infer that copper and nickel coins are not legal tender and thus cannot be used to pay taxes.
However, apparently they will let you?
Here is an article courtesy of the HuffPost website.
"On Dec. 11(2016), Nick Stafford pushed five wheelbarrows full of loose coins into Department of Motor Vehicles in Lebanon, Virginia, according to a statement he made on his company’s website.
Stafford, who has been fighting with DMV for months, decided to pay $2,987.14 in taxes on his car with 298,745 pennies. The facility’s automated coin-counting machine couldn’t handle the load, and employees were forced to count the 1,548 pounds of change by hand. Stafford said that he arrived at the DMV at 9 a.m. Wednesday and staff was not done counting the pennies until early Thursday morning, the BBC reports."
(Photo courtesy of Nick Stafford himself.)
Apparently the DMV staff were not aware that taxes cannot be paid in coins (unless the fee is $0.10 or less.)
Conclusion: If you ever decide to pay taxes in coins, do it in silver or gold or they can refuse to take it, but may not.
I am confusing, sorry about that.
God bless all who believe in him. Do unto others what you expect to be done to you. Dubbed a "Committee Secret Agent" by @mr1931S on 7/23/24. Founding member of CU Anti-Troll League since 9/24/24.
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There are 12 Federal Reserve Bank districts.
But there are a lot more than 12 Federal Reserve bank locations.
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What happened to Mead ?
I took it to mean the HQ of the various FRB's. Maybe they have other offices/space elsewhere but I'd have to check.
>
Mead is still around.
Now it’s the MeadWestvaco Corporation.