true U.S. dollar is. . ?
< THESE ITEMS ARE ALL U.S. LEGAL TENDER.The six objects at left are all marked "One Dollar" but no court in the land will examine why they are all so drastically different in physical appearance and composition.
How is it possible for a paper IOU ($1.00 Federal Reserve Note) to bear the same face value as the coin below it? The coin is legal tender for $1.00 but contains 480 grains of pure silver.
You may wish to remind me that no sane person would trade a silver dollar for anything worth only one dollar. But the difference remains
The mint is keenly aware the price of silver is more than a dollar. That's why it will not sell one to you for less than $19.60 (as of 2-15-'18).
Then, why would the mint stamp
"One Dollar" on a coin it intended to sell for $19.60 or more?
Because the silver eagle was launched in 1986 strictly as a bullion
coin and was never intended to circulate. To guarantee that no
one would be foolish enough to trade this handsome coin in the
marketplace it chose a face value that was drastically below the value
of its metal content. It also evoked memories of the old U.S.
silver dollar which was the underpinning of U.S. circulating money
beginning in 1792.
Here's the point: The U.S. cannot make any distinction among the "dollars" displayed in the photo above. Along the top row is the Eisenhower dollar, made chiefly of copper with a silvery-looking veneer of copper/nickel. Next is the Susan B. Anthony dollar....about the size of a quarter. It is also a legal tender for a dollar's worth of goods and services. It, too, is clad in a silvery nickel/copper veneer.
Next, the Sacajawea dollar and then one of the Presidential Dollar
The paper note in the center is an entirely difference critter and does
not come from the mint. It is made at the Bureau of Engraving and
Printing and skidloads of these paper notes are purchsed by the Federal
Reserve at a small markup above the cost of production. The face
value of the paper notes has no bearing on the matter. The Fed
does, however, have to purchase coins
from the mint at face value.
This establishes the distinct contrast between coins...which are not IOUs...and the paper notes
which are. The are promises
duly signed by the U.S. Treasurer and the Secretary of the U.S.
Treasury. (For years Federal Reserve Notes always had
printed on them a phrase indicating they were redeemable upon
demand in "lawful money." That promise mysteriously disappeared
in November, 1963, a time when the nation was stunned to distraction
by the death of a president in a shooting in Dallas, TX.
It soon became apparent that the cost of making dimes, quarters, and halves, was exceeding their face value. By 1965 Congress switched the metal for those coins from mostly silver to cupro-nickel, assuring us they would circulate side by side with the old silver coins on an equal footing. By the end of 1965 one only rarely found a silver coin in general circulation. Silver hoarders, including the government, picked out the silver as fast as they could. A person with the foresight in 1965 to lift $1,000 worth of silver coins from circulation would find their retail value today valued at about $12,000. Not a great return but certainly a decent offset for years of price inflation!
But the federal government cannot make a legal distinction between U.S.
coins of silver and those of cupro-nickel. Here's why.
Suppose you were a house-painter who understood the intrinsic
value of silver coins as opposed to paper dollars, checks, etc.
Suppose I offered you a bag of circulated U.S. silver coins all dated
prior to 1965. The face value is $1,000 but you and I know that
bag today contains more than $12,000 worth of silver. Being a
guy, and knowing the government cannot make a legal distinction between
90 percent silver coins and the cheap cupro-nickel coins that replaced,
them, you accept the deal. You plan to report your
income for the job as $1,000 and pay income taxes on that
Such clever schemes have been tried many times. Not usually with much success.
But the fact remains, a 1964 U.S. quarter-dollar and a 1965
are of completely different metallic composition. The
never wanted to debate the point. Likewise, there is no legal
distinction between the face value of a paper Federal Reserve dollar
note and that of a one dollar silver eagle, although the coin's one
troy ounce of silver is some twenty
times more valuable than the paper dollar.
When the U.S. Constitution was adopted in 1789 it defined the basic
money unit as a specific measure of precious metal. The Constitution has never been amended to
change the reference to money. Moreover, it was well
understood at the time that a PROMISE to pay money was not the same as
actually making the payment.
Proponents of the present debt-money system insist that the ancient constitution is out-of-date and doesn't matter any more. We disagree. The Founders concluded that honest money was an important pillar of a sound republic, and it is as true today as it was in the late 18th century. Until we return to the tenets of the U.S. Constitution we are stuck with persistent price inflation, unpayable debt, and all of the other miserable attributes of a fiat currency...including the legal embarrassment of not being able to see a distinction between a 90 percent silver coin of 1964 and the cupro-nickel coin of 1965.
The upshot is - you cannot find a court of law that will examine the
sharp differences among the objects in the photo atop this page.
From a legal standpoint each item has a legal tender value of $1.00
whether it's made of base
metal, paper, or silver.
Small wonder no one can accurately define the simple noun "dollar".
February 16, 2018