Contact
Archives
Search
Blogs
Newspaper Blogs
English-Language
Press
Polls

August 06, 2003

FIAT CURRENCY....I was killing time this afternoon and surfed over to the Volokh Conspiracy, where I found that Eugene, who apparently also has time on his hands, has answered a question from someone who wants to know if it's legal for a business to refuse to accept bills larger than $20. After all, his questioner says:

"....legally, Starbucks has to accept a $50 for "all debts public and private". There is also the issue of keeping confidence in a fiat currency, which is in the best interest of the U.S. government.

Personally, I would refuse to be baited by the kind of person who refers to paper notes as "fiat currency," but hey — it's Eugene's blog and he can do what he likes.

In any case, Eugene's answer is that if you buy something first and then pay for it (as in a "pump then pay" gas station) they have to accept your $50 bill. However, if you have to pay up front, they can simply refuse to do business with you.

That's clever, but I'd like to suggest two other answers that are completely unrelated to any knowledge of the law:

  • Stores have been doing this for a long time, and it's a dead certainty that some loon somewhere has litigated this. So, since many stores continue to have this policy, apparently that person lost.

  • Perhaps the gas station has to accept your $50 bill, but they don't have to give you change. It's up to you if you want to do business with a merchant who has this policy.

Any other ideas?

UPDATE: In comments, Anuraq provides a link to the definitive answer to this question direct from the U.S. Treasury:

The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 102. This is now found in section 392 of Title 31 of the United States Code.

....This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

Thanks!

Posted by Kevin Drum at August 6, 2003 05:05 PM | TrackBack


Comments

I believe that they can accept or refuse any currency that they want. Wasn't this issue settled a few years ago when that college student tried to pay his entire tuition in pennies?

Posted by: greg at August 6, 2003 05:10 PM | PERMALINK

Your hypothetical loon litigation could have been dismissed on grounds of mootness ("you've already paid, so case dismissed").

Posted by: alkali at August 6, 2003 05:11 PM | PERMALINK

Here's a link on this at Lawzilla:

http://www.lawzilla.com/ca-bus-001.shtml

There is no federal statute mandating that one must accept currency or coins for payment.

Posted by: Anurag at August 6, 2003 05:12 PM | PERMALINK

OK, so you don't believe Lawzilla -- what do they know. Here's the link from US Treasury

http://www.ustreas.gov/education/faq/currency/legal-tender.html

Posted by: Anurag at August 6, 2003 05:14 PM | PERMALINK

If it makes Eugene feel any better, someone asked Cecil Adams a variation of this question once many moons ago.

Posted by: Charles Kuffner at August 6, 2003 05:29 PM | PERMALINK

There seem to be two ways out of this situation. One is to stress safety. To discourage robbery, there is never more than change for a twenty in the till. Then it is a matter out of the hands of the management: police, insurance, safety consultants recommended it. I have seen a lot of places where they do take 50's and 100's between 7am and 7pm but not at other times.

The second way is to never have the change on hand. You can't take bills when you don't have the change on hand.

Posted by: Dale at August 6, 2003 05:37 PM | PERMALINK

Anuraq, those are great links. I never thought someone would actually find an answer to this question. Thanks!

Posted by: Joe Schmoe at August 6, 2003 06:26 PM | PERMALINK

I love Option B.
Nice thread.

Posted by: John Isbell at August 6, 2003 06:31 PM | PERMALINK

Not exactly the same question, but the Straight Dope is always fun, so what the hell:
Is it legal to pay a big debt in small change?
http://www.straightdope.com/classics/a1_330.html

Posted by: David at August 6, 2003 07:37 PM | PERMALINK

Oops, somebody beat me to it.

Posted by: David at August 6, 2003 07:38 PM | PERMALINK

I'm always amused when some wacko brings up the issue of "fiat currency."

I suppose that they should try to barter. I wonder how many 'coon pelts it would take to get a gallon of gasoline.

Posted by: raj at August 6, 2003 09:31 PM | PERMALINK

I can't link, but I admit I was confused when I tried to look up the section of the U.S. Code that the Treasury Dept. referenced, since it no longer exists. It is now classified as Title 31, Section 5103, which merely states (in its entirety):

"United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts."

Oddly, the public and private language was changed to the current language in 1982.

Even more oddly, I could not find a lawsuit about the no bill larger than $20 issue, but I did find two others that were interesting and somewhat related.

In Nemser v New York City Transit Authority, a New York state court held that a vending machine which only accepted coins did not violate the legal tender provision of federal law because it did not accept any bills at all (this was 1988, presumably somewhat before bill-acceptance technology was mainstream).

In Martin v Rhode Island Co., a passenger who attempted to pay his five-cent fare with five one-cent coins was unsuccessful in his lawsuit against the railway company. The railway company had an automated fare-registering device that would not accept one-cent coins and this also did not violate the legal tender clause. The interesting part of this case was that it took place in 1911.

And in case you were wondering, you can't pay your federal taxes by giving them your car either, see Calafut v Commissioner of the Revenue. That one's from 1967.

Posted by: Edge at August 6, 2003 10:18 PM | PERMALINK

Guess what! Mahdi Obeidi says Saddam had no $50 bills! I guess, according to your people's logic, that means $50 bills do not exist! How can $50 bills be legal tender if they do not exist! Hey, look, I opened my wallet and there were no $50 bills! More proof of the non-existence of $50 bills!

You people are pathetic.

Posted by: Glenn Reynolds at August 6, 2003 10:49 PM | PERMALINK

"You people are pathetic"

Pot, meet kettle.

Posted by: raj at August 7, 2003 12:39 AM | PERMALINK

That, uh, probably ain't Glenn.

Kind of a pity, come to think of it.

Posted by: Demosthenes at August 7, 2003 01:55 AM | PERMALINK

No, it wasn't - too many exclamation marks. The intellectual honesty level was flat on, though.

Posted by: Barry at August 7, 2003 04:19 AM | PERMALINK

raj,

Barter is not completely unheard of these days. I live in an area where there are lots of farms and know a man who recently (2-3 yrs ago) bought a new car entirely with soybeans.

Go figure.

Posted by: cv at August 7, 2003 05:47 AM | PERMALINK

What is this "loon" nonsence about fiat money?

Money not backed by gold is by economic definition fiat currency. There isn't anything loony about that, as far as I can tell.

Posted by: Lorenzo at August 7, 2003 06:40 AM | PERMALINK

Summer fun - go to a gas station and try buying a single gallon of gas.

That will be $1.59 and 9/10, please.

Posted by: Tripp at August 7, 2003 06:47 AM | PERMALINK

"Money not backed by gold is by economic definition fiat currency"

Well, I don't know that "fiat currency" really is a term recognized by economists. But of course, paper money backed by gold, or gold coins themselves, would be "fiat currency" too, as much as anything else. Money is a medium of exchange, silly--it's a method of calculating, say hypothetically, how many groceries are the equivalent of 8 hours of factory work.

Posted by: rea at August 7, 2003 06:52 AM | PERMALINK

Instead of passing a law saying one dollar equals X amount of gold, why not pass a law saying one dollar equals one dollar? This is "fiat money" (from the Latin for being forced to drive a cheap, unreliable car), and it's almost the only kind of national currency left in the world.

-- P.J. O'Rourke, Eat the Rich

Posted by: Thlayli at August 7, 2003 07:28 AM | PERMALINK

"Money not backed by gold is by economic definition fiat currency"

This is dumb. Any medium of exchange--yup, even gold coinage--whose denomination is set by government, is fiat currency.

What is so special about gold?

Posted by: raj at August 7, 2003 08:24 AM | PERMALINK

Personally, I would refuse to be baited by the kind of person who refers to paper notes as "fiat currency," but hey — it's Eugene's blog and he can do what he likes.

Why? It is the very definition of fiat currency.

Posted by: Jonathan Wilde at August 7, 2003 09:21 AM | PERMALINK

What is so special about gold?

You get one experience point for each gold piece you bring back from the dungeon.

--Kynn

Posted by: Kynn at August 7, 2003 10:01 AM | PERMALINK

To take this slightly off topic, as I understand it, shops that accept credit cards are contractually obligated to take them regardless of the total sale. In other words, they can't set a minimum sale price. Good information for the next time you try to charge that pack of gum.

Posted by: Bill Nazzaro at August 7, 2003 10:08 AM | PERMALINK

How come fast food open late at night can say you must drive a car to get served? If you don't own a car, why can they refuse to sell to you?

Posted by: JIM at August 7, 2003 03:30 PM | PERMALINK

I guess no one here took economics?

> refuse to be baited by the kind of person who
> refers to paper notes as "fiat currency," but
> hey

I am the original poster of the question to Eugene, and I used "fiat" not for some underlying political philosophy, but if you ever take Econ 101, 102, 201, 202, 501, 502 - that's what it is referred to. So for those of you who were too supid/poor/hung over/not interested in Econ 101, here is an out take from the second day of class:

We have a "fiat" currency since there is no underlying value to the currency - it's paper worth about 1/10 of a cent. The government says that the paper that has a "50" on it is worth 50 times the one with the "1" on it and half of the one with a "100" on it. In fact, the paper in itself all has the same underlying value.

Because the government sets these rules, and we all follow them, we are agreeing to its value by fiat. This system has proven to be the most successful of other systems we will study in this course - namely bartering, coinage, and currency backed by assets (gold).

So go back to class and learn something before making snyde comments about the use of "fiat".

Posted by: Mitch R at August 7, 2003 05:14 PM | PERMALINK

Umm... you sound a little angry. Do you think that kind of response will convince anyone that you AREN'T a loon?

Posted by: eggplant at August 8, 2003 01:58 AM | PERMALINK

could you please send me more info on what programmes you offer on you tv station and if you coould give me ur address and telephone no. i would realy appreciate that

Posted by: nela miraby at October 13, 2003 05:45 AM | PERMALINK

It's rather interesting for me..

http://body-piercing-portland.skidman.com
http://custom-piercing-jewelry.skidman.com
http://navel-piercing-in-boston.skidman.com

Posted by: raymond at February 19, 2004 03:53 AM | PERMALINK

Can anyone help me locate a book/author? I believe his name is Gil Schiff (or Schiffman) and in about 1970 he wrote a book about his argument with the IRS over the issue of fiat currency. Can't seem to locate it.

Thanks, RR

Posted by: Richard Rystrom at March 25, 2004 09:03 AM | PERMALINK

online casinos | casino bonus | casino directory | high roller casinos | casinos

Posted by: doi at May 23, 2004 12:38 PM | PERMALINK

You have a pretty nice blog. English is not my native language but it was please to read your site. From Russia with love :)Sincerely yours..

http://dogs.healz.com/
http://arthritis-foundation.bcure.com/
http://asthma-allergies.healz.com/

Posted by: Diane at June 1, 2004 12:44 PM | PERMALINK

You have a pretty nice blog. English is not my native language but it was please to read your site. From Russia with love :)Sincerely yours..

http://arthritis-symptoms.bcure.com/
http://causes-snoring.bcure.com/
http://causes-snoring.bcure.com/

Posted by: Beverly at June 2, 2004 04:13 AM | PERMALINK

hi, your post is very important for me, thanks

Posted by: mac_user1979 at June 17, 2004 03:52 AM | PERMALINK

thanks

Posted by: erotic incest stories at July 6, 2004 11:17 AM | PERMALINK


Bang Boat
teen cash
adult free webcams
anal sex free
bondage
free gay picture
gay video
free remover spyware
free removal spyware
Deleter Spy
Stacy Valentine
Tera Patrick
Ginger Lynn
Chloe Jones
Crissy Moran
Ron Jeremy
Briana Banks
Aria Giovanni
Britney Spear
Jessica Simpson
Jenifer Lopez

free web cam free live web cam free chat with web cam free sex web cam adult free web cam free nude web cam free girl web cam free web cam site free porn web cam free gay web cam free xxx web cam free teen web cam free web cam chat room free amateur web cam free web cam pic free adult live web cam free adult web cam chat live sex web cam free free personal web cam free live nude web cam free live girl web cam free live web cam chat web cam live free personal cam free view web free web cam picture free sex chat web cam free online web cam cam free viewing web free web cam software free lesbian web cam free web cam community cam free watch web free web cam video free live web cam site free web cam host free sexy web cam free web cam hosting free live web cam porn free naked web cam free web cam of woman free home web cam free live xxx web cam free adult web cam site free nude web cam chat cam free totally web cam free movie web cam chat free teen web free web cam chat site free asian web cam free black web cam voyeur web cam free free streaming web cam free web cam pussy free live teen web cam free web cam show free gay live web cam free private web cam cam free web yahoo web cam free ware cam chatting free web cam free gallery web free teen web cam pic free nude teen web cam free live web cam show free male web cam cam free live web woman cam free now web cam free membership no web cam college free web free live web cam amateur access cam free web cam dating free web free shemale web cam free sex web cam site cam free sample web cam download free web cam free room web cam free no registration web free adult web cam community free gay web cam chat cam chat free girl web cam free girl girl live web free hidden web cam free naked woman web cam free erotic web cam free hardcore web cam cam code display free web cam free mature web free web cam broadcast cam free preview web cam chat free online web free college girl web cam free live lesbian web cam cam free skin web free gay male web cam cam free man web free porn web cam chat cam free service web free nude woman web cam free web cam sex show free sex web cam video free adult sex web cam free online sex web cam free teen sex web cam free gay sex web cam free web cam sex amateur free private web cam sex home web cam sex free free web cam cyber sex free couple sex web cam free lesbian sex web cam free hardcore sex web cam cam free sex watch web free sex web cam pic cam free movie sex web cam free free sex web cam free sex view web free sex web cam sample free black sex web cam free nude web cam pic free amateur nude web cam cam free nude sexy web cam free non nude web free nude web cam site free adult nude web cam free nude man web cam free nude web cam show cam free live nude web woman free nude beach web cam free nude gay web cam free nude web cam at home free nude web cam picture cam free nude preview web cam free nude video web cam free girl hot web free web cam teen girl cam free girl pic web cam free girl online web black cam free girl web cam free girl watch web free adult girl web cam asian cam free girl web cam free girl video web cam free girl picture web cam free girl web young cam cam free free girl web web cam free girl totally web cam free girl show web cam free gallery girl web cam free girl real web cam free free girl web cam free live online web free live streaming web cam cam free live web free home live web cam cam free live secretfriends-com web cam free live totally web free live sexy web cam free live naked web cam cam free live watch web cam free live view web cam cam free free live web web cam feed free live web cam free live private web cam free live naked web woman cam community free live web amsterdam cam free live web cam free host live web free live pussy web cam asian cam free live web hot live free web cam cam free live now web cam female free live web cam free free live web amateur cam free live web xxx animal cam free live web cam free hidden live web cam free live preview web free live voyeur web cam cam ebony free live web cam free live password web cam free live shemale web free xxx web cam chat free web cam video chat cam chat free lesbian web cam chat free private web cam chat free program web cam chat free web cam chat free naked web cam chat free naughty web cam chat free web yahoo cam chat free totally web cam chat free software web cam chat free kid web cam chat free line web free amateur web cam and chat cam chat free free web cam chat college free web cam chat community free web cam chat free msn web best cam chat free web free porn web cam site free teen porn web cam cam com free porn web cam free online porn web free adult porn web cam cam free porn video web cam free porn web xxx free amateur porn web cam free gay porn web cam cam free porn watch web free xxx web cam site cam free teen web xxx free adult xxx web cam free amateur xxx web cam free teen web cam gallery cam free teen video web free gay teen web cam cam free site teen web cam free teen web young free amateur teen web cam free teen web cam picture free amateur web cam site free amateur adult web cam free gay amateur web cam free amateur web cam pic free sex cam free live sex cam free sex cam chat free live sex cam chat free sex video cam free sex spy cam free online sex cam free amateur sex cam free hidden sex cam free teen sex cam free adult sex cam free live sex chat web cam free gay sex cam cam com free live sex web free home sex cam free live teen sex cam free sex voyeur cam free lesbian sex cam free asian sex cam com cam free sex free private sex cam free sex cam site free nude sex cam free live sex video cam free sex cam sample free live web cam sex show adult cam chat free sex web free sex cam show anal cam free live sex sex cam chat free room sex web free live sex cam feed cam free home private sex web cam free movie sex cam free lesbian live sex amsterdam cam free sex cam free sex watch cam free livefeeds sex cam free latina sex free live sex cam show adult cam free live sex free hardcore sex cam amsterdam cam free live sex free couple sex cam free hot sex cam cam free membership no sex free porn sex cam free sex spy cam pic cam free gratis sex cam free live sex site web free streaming sex cam live sex voyeur cam for free girl web cam live web cam girl college girl web cam teen girl web cam hot web cam girl web cam girl pic young web cam girl cam chat girl web web cam girl picture black cam girl web asian girl web cam girl home web cam cam girl web yahoo girl personal web cam real web cam girl cam girl online web school girl web cam cam chat girl live web cam girl high school web web cam girl gallery cam girl video web cam girl hot live web cam girl little web cam college girl live web cam girl in web cam cam girl web cam girl horny web teenage girl web cam cam caught girl web web cam girl archive cam girl naughty web japanese girl web cam girl private web cam cam girl msn web cam girl photo web arab cam girl web cam cute girl web cam fat girl web cam girl indian web cam flashing girl web girl web cam site cam girl stripping web cam girl goth web cam girl watch web cam free girl streamate web cam dorm girl web cam girl girl web cam girl gratis web girl web cam adult cam flexing girl web cam free girl girl web cam girl gone web wild collage girl web cam cam girl korean web cam free girl view web alone cam girl home web cam canadian girl web cam girl russian web cam girl single web top 100 girl web cam teen girl web cam pic cam girl voyeur web cam girl home live web cam girl latina web cam french girl web cam girl secret web action cam girl web australian cam girl web cam girl strip web cam free girl preview web cam free girl horny web cam girl stripping teen web cam girl pic web young cam girl preteen web cam girl talk web cam girl index web cam girl kissing web cam girl local web cam girl teen web young web cam sex live sex web cam web cam sex chat teen sex web cam sex gratis web cam amateur web cam sex gay sex web cam live web cam sex chat adult sex web cam adult cam direct sex web web cam sex chat room video sex web cam sex web cam site home sex web cam web cam sex show cam online sex web live sex show web cam web cam cyber sex asian sex web cam web cam sex pic lesbian web cam sex hot sex web cam couple sex web cam cam college sex web cam sex web yahoo cam hidden sex web amsterdam cam sex web black sex web cam web cam sex com cam membership no sex web live adult sex web cam web cam sex gratuit cam pal pay sex web cam friend secret sex web adult cam chat sex web free sex porn web cam oral sex web cam cam having people sex web cam dating sex web cam live secretefriends sex web xxx sex web cam cam msn sex web nude sex web cam cam sex watch web cam cam free sex web group sex web cam cam sample sex web sex voyeur web cam cam couple live sex web com cam sex web free nude sex web cam
Bang Boat
Bang Boat
Bang Boat
Bang Boat

Posted by: Nick at July 26, 2004 12:54 PM | PERMALINK
Navigation
Contribute to Calpundit



Advertising
Powered by
Movable Type 2.63

Site Meter