Q: Is gold legal tender?

Me ^ | Just now | Me

[cleoning]

Question for the Freepers:

Article 1 Section 10 reads in part: "No state shall ... make anything but gold and silver coin a tender in payment of debt"

Can gold be used a legal tender to pay debts or obligations to the US or state governments by private citizens? Could I send a few ounces of gold to my county courthouse to pay property taxes? Or show up at the DMV counter with some gold to register my car?

The Founders totally abhorred fiat currency and reluctantly allow reedemable currency. Jefferson talked about citizens being "filched" by treasury notes (not the modern T-notes) and looking forward to getting rid of them. But do I have the right to pay my government(s) in gold? Or can I only use whatever us defined as "legal tender" (by a stamp on a piece of paper)?

What do you all say?

[Young Rhino]

Gold is only legal tender when you wear a tinfoil hat during the transaction. Beware of the trilateralists...and remember to take your meds.

[Traffic_Can]

The one ounce American Gold Eagles have a denomination of $50.00 stamped right on them and thats the legal tender value.

With that said, I sold 6 eagles today for $363 a piece; totalpayout: $2178.00

[Modernman]

Article 1 Section 10 reads in part: "No state shall ... make anything but gold and silver coin a tender in payment of debt"

This just means that states can't print their own currency. I suppose a state could pass a law allowing debts owed to the state to be paid in gold or silver, but I doubt any state does that.

[Dog Gone]

The language you quoted is a limitation on the states. It also provides that the states may not coin money.

So Federal rules are going to prevail. You could pay in $20 gold pieces, which are still legal tender, but you'd be crazy to do so.

[cleoning]

Ok, the language is limited to the states. But the Founders had no intention of private citizens making payments directly to the Federal Government for anything, so I am thinking their intention would apply to private citizens nowadays (I know no judge would see it this way today).

But still my question is, can I pay my debts in (raw) gold if I wanted to today?

[Modernman]

But still my question is, can I pay my debts in (raw) gold if I wanted to today?

No. This constitutional provision allows states to accept gold as payment for debts, but it doesn't require them to do so. Absent a law allowing payment in gold, no government or private citizen is required to accept payment in anything other than US dollars.

BTW, raw gold and silver, long-term, are the only investments you would lose money in over a given 20-year period. You're better off investing in junk bonds (one of the best investments over the long-term).

[cleoning]

Ok. I am not wanting to use gold for investments. There is a particular government entity that may give me a hard time about a particular form of payment I gave it. Rather than fight a battle around this particular form of payment, I was thinking I could default to what it said in the Constitution (which I thought said I could pay with gold but memory doesn't seem correct), and just see what happens.

[wideawake]

I know no judge would see it this way today

No judge would have seen it that way 150 years ago, either.

And you are completely wrong about the Founding Fathers and fiat currency.

The Continental Congress, peopled by our Founding Fathers, issued paper currency in 1775 backed by the "anticipated revenues" of the US Government, not gold or silver.

That sounds a lot like the "full faith and confidence" of the US Government that backs our currency currently.

Wouldn't you say?

[Modernman]

I'd say pay cash- save yourself a headache. You don't want to end up paying extra penalties on top of what you already owe....

[wideawake]

There is a particular government entity that may give me a hard time about a particular form of payment I gave it.

Unless you want to ruin your life for no good reason, I would suggest that you tender American dollars as payment to that government entity pronto.

[Dog Gone]

But the Founders had no intention of private citizens making payments directly to the Federal Government for anything, so I am thinking their intention would apply to private citizens nowadays (I know no judge would see it this way today).

You definitely may not pay in raw gold. And the 16th Amendment to the Constitution definitely requires payments by individuals to the federal government.

It sounds like you're wanting to make some political or constitutional point with the authorities, and you are only going to make things worse for you.

[cleoning]

Oh, mercy. I thought I would find some knowlegeable people here. I didn't want to spend my time educating everyone.

First, the Continental Congress? That was before the US, and it's paper currency didn't turn out very well did it.

The fact that you would say that I was completely wrong in saying the Founders abhorred fiat money shows that you speak of things you do not know. I am not trying to berate you, but here are some relevant quotes:

"I apprehend these general reasonings will be found true with respect to paper money: That experience has shown that, in every state where it has been practised since the revolution, it always carries the gold an silver out of the country...therefore, that it must be a discouragement to commerce...Every medium trade should have an intrinsic value, which paper money has not; gold an silver are therefore the fittestfor this medium" - Charles Pinckney, South Carolina Ratifying Convention, 20 May 1788

"By the tenth section every State is prohibited from emitting bills of credit-As it was reported by the committee of detail, the States were only prohibited from emitting them without the consent of Congress; but the convention was so smitten with the paper money dread, that they insisted the prohibition should be absolute..." Luther Martin, Genuine Information, 1788.

"In Rhode Island, the paper money had depreciated to eight for one, and a hundred percent with us..." (they are not talking about redeemable money) Mr. Davie, Debate in North Carolina Ratifying Convention, 29 July 1788

But I don't need to try to convince people of what I already know to be true.

[cleoning]

Man, I just signed up today and I thought there were some true-blue conservatives.

First, I know about the 16th amendment. My point was that the Founders did not envision a 16th amendment (Article 1 Section 9 "No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken"). If they thought that states should only pay the federal government in gold or silver, don't you think they would expect the same to be true for private citizens?

Second, I detect a sense of "choose your battles, don't make things any harder for yourself." I don't mean to set up a straw man, so I appologize if I am in error of this characterization. But I feel like I will choose my own battles, what's it to everyone else? Most of the people during the Revolutionary War sat by and waited to see who won and where to put thier allegiance to. They chose there battles.

Sigh, I just was wondering whether the original Constitution and the Founder's intent indicated that I could pay my debts to the gov. in gold.

Never mind.

[Dog Gone]

The Founders envisioned a Constitution which could be amended and expressly provided for it. It sounds as if you think they made a mistake on one hand, yet holding them out to be infallible on the other.

There are plenty of conservatives here, but you'll never discourage them from offering advice. Sorry if it offended you.

And welcome to FR.

[Salman]

It says no state, the doesn't exclude the Feds from doing so under some pretext ot "the general welfare".

However gold can be used in payment if both parties agree to it. By the way, that would have been very illegal 1933 - 1975.

[MayDay72]

"...that would have been very illegal 1933 - 1975." -Salman

...Are you referring to 'Breton Woods'? I've seen that reference before regarding the time period you describe and 'fiat money'. What exactly happened at 'Breton Woods' in 1933? I hope 'cleoning' will not mind this 'tangent', since it is his [or her] post...

[Salman]

...Are you referring to 'Breton Woods'?

I never heard of Breton Woods. What I know is that in 1933, congress passed a bunch of "reforms" that included this law, at FDR's request. Congress repealed the gold ban in 1975.

[wideawake]

First, the Continental Congress? That was before the US, and it's paper currency didn't turn out very well did it.

The question was not whether the Continental Congress preceded the US or whether the Congress' paper currency was a success.

The question was whether the Founding Fathers were unalterably opposed to fiat currency or not.

I think you'll find that the Continental Congress was as much a creation of the Founding Fathers as the US.

You can't bait-and-switch me.

I am not trying to berate you, but here are some relevant quotes

While Charles Pinckney may be relatively well known (he was arguably a "Founding Father" but more accurately a protege of theirs), Luther Martin and "Mr. Davie" (presumably William R. Davie of Halifax) don't exactly spring to the lips of any American when they are asked to name some of the Founding Fathers.

While Martin was a patriot of local importance in Maryland, he failed to even attend one session of the Continental Congress and he fought the Constitution tooth and nail - most people would agree that a notorious absentee in the councils of the young nation and a lifelong opponent of Jefferson, Hamilton, Jay, Madison and Adams was not exactly a Founding Father. He was also an ally of Aaron Burr - not a name associated with loyalty to this country - and was busy drinking himself to death as America was endeavoring to make its way in the world.

The fact is, the great founders of our country, Thomas Jefferson, George Washington, Samuel Adams, John Adams, John Jay, James Madison, Alexander Hamilton et al. cannot be so easily recruited to your narrow cause as the minor historical footnotes of personages that you cite.

Oh, mercy. I thought I would find some knowlegeable people here. I didn't want to spend my time educating everyone.

Unfortunately for you in your insufferable arrogance, you have found very knowledgeable people here - people who can express their own thoughts without cutting and pasting those of others.

But I don't need to try to convince people of what I already know to be true.

Whether or not you want to convince yourself that Luther Martin was more important an influence on the founding of our nation than Alexander Hamilton or George Washington is your own affair.

But to follow your own line of "reasoning", why should we here listen to you who are incapable of incorporating unpleasant facts into your obsessive worldview?

The funny thing is that everyone here probably prefers hard money to fiat currency - we just don't need to falsify history in order to hold that opinion.

[Maceman]

As Irwin Schiff has correctl noted, the Constitution gives the federal government the power to coin money -- not make coins.

Under the constitution, nothing but gold and silver are legal tender. In other words, only gold and silver are money. The government is charged with "coining money," which means that it can take gold and silver, make it into coins, regulate the weight of the coins and affix value to those coins.

The current Federal Reserrve "Notes," are blatantly unconstitutional. (Please don't cite case law in opposition -- unless you think the Supreme Court's affirmative action ruling makes that abomination constitutional as well.)

The consitution says what it says about money. Why would the Founders have bothered to place that gold and silver language in the constitution and define the feds' money coining power -- except to ensure that the federal government would never have the power to foist worthless paper with no intrisic value on the people?

The fact that our extra-legal monetary system is now so entrenched that no court will ever uphold the gold and silver clause does not change the fact that a constitutional amendment would be necessary to make federal reserve notes actual legal tender.