From: msb@sq.sq.com (Mark Brader)
Subject: Re: Gold coins (Was: Re: You are humble and loveable.  CHOMP!)
Organization: SoftQuad Inc., Toronto, Canada
Date: Tue, 1 Sep 92 07:48:04 GMT

[Apologies if you see this twice; the first posting seems to have failed.]
 
> I am well aware that gold coins have recently been, and in some cases
> still are, *legal tender*.  Canada minted a twenty-dollar gold coin in
> 1967 as part of its centennial series, and I have no reason to believe
> that it is not still legal currency here.  However, it is highly
> doubtful that anyone was foolish enough to spend one, even during the
> brief period when its gold content was actually worth less than its
> face value.

Well, in fact, Canada has minted a number of subsequent legal-tender gold
coins as well, in denominations of $50 and/or $100.  So many of them that
their value to collectors has in some cases fallen below their face value.
Some of the owners did try to spend them, deposit them in banks in the
ordinary way, or pay their taxes with them -- and they were refused!

I'm not up on the legal ramifications, but I do know that "legal tender"
isn't as strong a concept as most people think it is.  In the particular
case of these gold coins, I believe I heard something about a court ruling
requiring them to be accepted, but I might have it wrong, as I'm not
personally affected by it.

Oh, yes... in Ontario at least, the original purchasers of these coins --
sold only above face value by the mint -- were required to pay sales tax
on the full purchase price, *including the face value* of the coin.  

> Hence my doubts that gold coins were in *common
> circulation* at any time in the recent past.  The instinct to hoard
> currency of intrinsic material value ... is quite universal ...

Dorothy L. Sayers's character Lord Peter Wimsey, in the 1932 mystery
"Have His Carcase", makes remarks that support this thesis.  (I think
this book has another title.  It's the one where Harriet finds a body
on a rock in the sea, dripping with blood from a cut throat.)  The sum
of 300 sovereigns -- that is, 300 pounds in gold coins -- figures in
the story, and Lord Peter is commenting on the gold...

| He put his hand in his pocket and drew out a handful of gold
| sovereigns.  They rolled ringing over the table as he threw them
| down, and Glaisher and Umpelty flung out eager hands to catch
| them as they spun away in the lamplight.  They picked them up
| and weighed them in their palms; they held them between their
| fingers, passing inquisitive fingers along the milled edges and
| over the smooth relief of the gleaming George and Dragon.
| 
| "Yes," said Wimsey, "they feel pleasant, don't they?  There are
| ten of them there, and they're worth no more than paper pounds*,
| and to me they're actually worth nothing, because, being a tom-
| fool, I can't bring myself to spend them.  But they're gold.  I
| wouldn't mind possessing three hundred pounds' worth of them,
| though they might weigh five pounds avoirdupois and be an
| infernal nuisance. ..."
|
| *The acute reader will discern that at the date of this story
| Great Britain had not yet gone off the Gold Standard.

The acute reader will discern from the author's footnote that it
did soon afterwards, presumably during the course of publication.
And I think it's very clear from the above text that gold coins
were anything but in common circulation in the years just before
that transition.

That's Britain, of course, but I rather suspect the US was similar.
In Canada, incidentally, the only issues of gold coins for general
circulation (as opposed to numismatic/commemorative mintings) took
place from 1912 to 1914.
-- 
Mark Brader			Also, be sure to include your signature TWICE in
SoftQuad Inc., Toronto		each article. That way you're sure people will
utzoo!sq!msb, msb@sq.com	read it.   -- "Emily Postnews" (Brad Templeton)

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