According to monetary law, there are limits to the value of a transaction for which only coins are used. [22] A payment in coins is legal tender only for the following amounts for the following coin denominations: An American note was an earlier form of paper money in the United States from 1862 to 1971 that was backed and exchangeable for physical silver or gold. Between 1933 and 1971, U.S. notes and Federal Reserve notes were legal tender. The Australian dollar, consisting of banknotes and coins, is legal tender in Australia. Australian banknotes are legal tender under the Reserve Bank Act 1959, p.36(1),[12] with no limit on the amount. The Currency Act 1965[13] also provides that Australian coins intended for general circulation are also legal tender, but only in the following amounts: The sixth series of Swiss banknotes of 1976, recalled by the National Bank in 2000, is no longer legal tender, but can be exchanged for regular banknotes until April 2020. Demonetization is the act of stripping a monetary unit of its legal tender. It occurs whenever the national currency changes: the current form(s) of currency are withdrawn from circulation and withdrawn, often to be replaced by new notes or coins. Sometimes a country completely replaces the old currency with a new currency. Today, Federal Reserve notes circulate in the form of money in the United States and around the world, wherever dollar-denominated transactions take place. These banknotes are still commonly referred to as “dollars,” which were once a legally defined amount of gold or silver, but is now simply the official unit of account for U.S.
legal tender, including Federal Reserve banknotes. The Swiss franc is the only legal tender in Switzerland. Any payment of up to 100 Swiss coins is legal tender; Banknotes are legal tender for any amount. [32] Demonetization is currently prohibited in the United States, and the Coinage Act of 1965 applies to all U.S. coins and currencies, regardless of age. The closest historical equivalent in the United States, outside of Confederate silver, was from 1933 to 1974, when the government banned most private property of gold bullion, including gold coins held for non-numismatic purposes. Now, however, surviving gold coins from before 1933 are legal tender under the 1964 law. Although the Reserve Bank Act 1959 and the Currency Act 1965 stipulate that Australian notes and coins are legal tender, Australian notes and coins do not necessarily have to be used in transactions, and refusing to accept payments as legal tender is not illegal. It appears that a service provider is free to determine the commercial conditions under which payment is made before the conclusion of the “contract” of the supply or service.
If a supplier of goods or services specifies other means of payment before the contract is concluded, there is generally no obligation to accept legal tender as payment. This is the case even if it is an existing debt. However, refusing to accept legal tender to settle an existing debt if no other means of payment/settlement has been determined in advance could have consequences in legal proceedings. [15] [16] Prior to the Civil War (1861 to 1865), silver coins were legal tender only up to a maximum of US$5. Before 1853, when American silver coins were weighed by 7%, the coins had exactly their value in metal (from 1830 to 1852). Two 50-cent silver coins had silver with an exact value of $1. An 1849 gold U.S. dollar had $1 worth of gold. With the influx of gold from California mines in the early 1850s, the price of silver rose (gold fell). For example, from 1840 to 1852, 50-cent coins were worth 53 cents when melted. The government could increase the value of (expensive) gold coins or reduce the size of all U.S.
silver coins. With the reduction of 1853, a 50-cent coin had only 48 cents of silver. This is the reason for the $5 silver coin limit as legal tender; Paying someone $100 in the new silver coins would give them $96 in silver. Most people preferred bank checks or gold coins for large purchases. However, under President Nixon, the gold standard was officially abandoned and a complete fiat currency was created, in which the Federal Reserve notes themselves have the only legal tender in circulation, with small base metal coins. In 1914, the Banking Amendment Act gave legal tender status to the banknotes of any issuer and removed the requirement that banks authorized to issue banknotes must exchange them for gold on demand (the gold standard). U.S. coins and currencies (including Federal Reserve notes and circulation notes from Federal Reserve banks and national banks) are legal tender for all debts, public duties, taxes, and duties. Foreign gold or silver coins are not legal tender for debts.
This note is legal tender (literal translation, money in payment of the debt) according to the law. In order to comply with the legal definition of “legal tender”, the exact amount due must be offered; No changes can be requested. [40] In 1901, banknotes in circulation in Australia were banknotes payable in gold coins and issued by merchant banks and Queensland treasury bills. Banknotes circulated in every state except Queensland, but were not legal tender, except for a brief period in 1893 in New South Wales. However, there were certain restrictions on their issuance and other provisions to protect the public. Queensland Treasury notes were issued by the Queensland Government and were legal tender in that state. Banknotes of both categories remained in circulation until 1910, when the Commonwealth Parliament passed the Australian Notes Act 1910 and the Bank Notes Tax Act 1910. The Australian Notes Act of 1910 prohibited the circulation of government notes as currency, and the Bank Notes Tax Act of 1910 imposed a tax of 10% per annum on “all notes issued or reissued by a Commonwealth bank after the enactment of that Act and not repaid”. [18] [19] These laws effectively ended the issuance of banknotes by commercial banks and the Queensland Treasury.
The Reserve Bank Act of 1959 expressly prohibits persons and states “from issuing a bill of exchange or note for the payment of money payable on demand to the holder and intended for circulation.” [20] The main purpose of this law is to ensure national acceptance of the U.S. currency, in accordance with constitutional language, which reserves to Congress the power to create a single currency that has equal value to all of the United States. Although the law provides that U.S. currency is legal tender and can be accepted for the payment of debts, it does not require the acceptance of cash payments, nor that the acceptance of cash cannot be restricted. [48] But we put political messages on the bills, not commercial advertising. Because we all want these bills to stay in circulation and stamp to send a message on a topic that is important to us, it`s legal! Some banks may also say that stamped notes are “illegally altered,” but this is a confusion between the general definition of changed and the legal definition, which refers to currencies whose value has been fraudulently altered, such as changing a $10 bill to a $100 bill. According to the Federal Reserve, the difference is passed on to the intelligence agency if it “discovers counterfeit or illegally altered currency in an institution`s filing” (source). Stamped notes do not meet the definition of altered currency, so your bank will not be penalized for depositing and should accept them without complaint. It should be noted that this deals with the denominations of money and money in general.
In this context, it seems unlikely that stamped banknotes, which are legal tender, will be treated differently from unstamped banknotes. We sometimes hear from local businesses that have policies of not accepting tagged currency, usually as a precaution against counterfeiting, but it is not clear whether such a policy is legal or not. They appear to be well-intentioned and do not discriminate against stamped banknotes in particular. Legal tender was first introduced for gold and silver coins in the French Penal Code of 1807 (Art. 475, 11°).