Saturday, March 08, 2014

Legal tender

A while back I ordered a couple of Aurum 1/10 gram gold "bills". Very pretty! And I like the idea.

One thing that jumped out at me as I examined one is the statement printed thereon: "Not legal tender".

The first thing I thought was "Obviously! This has actual value!"

Then I got to thinking "Is this a warning or a promise?"

What is legal tender and why would I prefer it?

Well, the definition linked above says that back in the 1730s "legal tender" meant "currency that may be lawfully tendered in payment of a debt". Notice the word "may". Sounds nice and voluntary. I have no problem with that.

Unfortunately, the current definitions all include coercion: "Legally valid currency that may be offered in payment of a debt and that a creditor must accept" and "currency in specified denominations that a creditor must by law accept in redemption of a debt". Note the addition of the rude word "must".

I don't know about you, but my thinking has always been that if you feel the need to use coercion to get people to go along, your idea probably isn't a very good one.

Sure, I'll accept "legal tender" as long as it's around, but I'm always happy to accept money that avoids the "legal tender" trap. It's the polite alternative.

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