From: m1tca00@fed.frb.gov (Thomas C. Allard)
Newsgroups: alt.folklore.urban
Subject: re: Legal Tender
Date: 12 Nov 92 17:54:44 GMT


Well, I finally bogged down and looked it up.  The best reference I
found was _The Legal Qualities of Mony_ by Arthur Kemp (1956:
Pagaent Press, NY).  The one thing it makes absolutely clear is
that there is a lot of confusion on the subject:

  A student might reasonably suppose that such an extensive
  literature would have developed a common meaning for the
  word MONEY.  Normally the citizen in his day-to-day affairs
  is careless in his use of the word, but lawyers and
  economists, who are under more rigid scientific compulsions,
  might be expected to be more precise.  Unfortunately, this
  is not the case. [page 1]

According to Walter E. Spahr (_It's YOUR Money_, Economists'
1946, National Committee on Monetary Policy: NY):

  When a money is full legal tender it means that the debtor
  can tender it as a money which the government says shall be
  satisfactory to a creditor in settlement of his debtor's
  obligations.  In other words, in so far as the monetary
  aspect of the contract is concerned, a legal tender money,
  provided the amount tendered is in accordance with the
  contract, shall be deemed satisfactory by the creditor.
  A creditor may refuse to accept legal tender money for
  any number of reasons;  for example, there may be certain
  aspects of the contract which he insists the debtor is not
  fulfilling, but he may not raise in court any questions
  regarding the nature of the money that was tendered.

  Prior to May 12, 1933, at which time Congress unwisely
  declared all our money to be full legal tender (repeated
  in ammendment of June 5, 1933), the qualities of legal 
  tender were attached to our money in a variety of ways.
  For example, minor coins such as nicklels and pennies
  were legal tender up to 25 cents, and subsidiary silver
  coins up to $10...  Should a debtor wish to annoy his
  creditor by sending him a large bag or keg of pennies,
  he can under the present law force his creditor to accept
  such a payement if the amount is accurate and if all other
  terms of the contract are fulfilled. [page 15]

A few caveats:  (1) This was written in 1946, and MAY have since
been reversed.  (2) Spahr does not give references for his
assertion that creditors must accept legal tender.  In fact, Kemp
finds all sorts of discrepancies:

After describing the different phrases on different types of money
(ie "This note is legal tender...", "This certificate is...", and
"...redeemable in lawful money at the U.S. Treasury..."), Kemp
concludes:

  A brief survey of current money and banking textbooks, legal
  texts and a legal and monetary treatises will convince the
  reader that there is a current lack of understanding of these
  qualities of money... [page 5]

  Often, legislative authorities appear to have been ignorant
  of the principles involved, or even heedless or careless.
  The legal tender quality in particular has been used for
  such purposes as favoring debtors to creditors, or favoring
  government at the expense of all people...  Here and there,
  too, one discovers odd versions of fiat money which make
  money and legal tender identical...  legal treatises have
  sometimes avoided the issues or have shown inconsistencies
  with respect to the legal aspects alone.

  Monetary, legal and economic literature over the past half
  century reveals an almost negligible amount of discussion
  concerning legal qualities of money and, unfortunately,
  a good part of what does exist is erroneous. [page 5]

But it's not hopeless:

  Historically, the quality of full legal tender has indicated
  the widest recognition which can be bestowed upon money by law
  or legal procedure.  Generally speaking, there has been no
  superior quality of money in law although money not made legal
  tender could, of course, possess superior economic quality.
  Usually, but not always, the standard money has been legal
  tender; this quality, in other words, is most frequently a basic
  legal complement of the standard monetary unit. [page 5]

So I'll just conclude with a few observations of my own:
First, one of the valid reasons for refusing cash MAY be if it is
mailed.  Second, if you DO mail cash, there is no way for you to
prove that it was received.  Third, because of the apparent
confusion on the subject, I would expect a court battle forcing
a creditor to take cash to be a crap shoot.  Finally, the
strategy of waving your arms and pointing at the message "This
note is legal tender for all debts, public and private" would
generally convince people to take cash even though they SAY they
won't.

----
"Oh Life's a Cabaret
 Like Berlin, 1930,
 All I crave is my escape"  --Dead Kennedys, "Saturday Night Holocaust"
rgds-- TA  (uucp: uunet!fed!m1tca00 | internet: m1tca00@fed.frb.gov)
[implied disclaimer]
Newsgroups: alt.folklore.urban,rec.arts.startrek.misc