shad@teldata.UUCP (02/24/84)
* Are you really being paid in dollars? By statute (made law by being upheld in Boric v. Trott, PA., 5 Phila. 366, 404) "the definition ... [of] 'dollar' is a silver coin weighing 412 1/2 grains or a gold coin weighing 25 4/5 grains of 9/10 fine alloy of each metal [gold and silver]. But since Article I Section 10 of the United States Constitution pro- hibits States from making "any Thing but gold and silver coin a tender in payment of debts", only the gold and silver coin is the true money of account of the U.S. Look closely, it does not say gold or silver coin nor does it say gold and/or silver coin, it says gold AND silver coin. The wording, as it should be in law, is exact and binding. If Federal Reserve Notes (FRNs) are not redeemable at any Federal Reserve bank into real money, meaning the money of account of the United States (just try) then a "fair market value" must be placed upon these obligations. Since the New York Commodity Exchange (Comex) daily affixes a value by which you can convert FRNs into gold or silver a source exists, although in reverse, for setting a fair market value for FRNs. Precious metals are weighed in the troy system where a pound troy is 12 oz.t. and 1 oz.t. is 480 grains. Hence: $ 1 FRN = --------------------------------------------- 0.04842 * Au/oz.t. + 0.00537 * Ag/oz.t. where: 0.04842 = 9/10 of coin * 1/.999 fine * 1/480 oz.t/grain * 25.8 grains and 0.00537 = 1/10 of coin * 1/.999 fine * 1/480 oz.t/grain * 25.8 grains At the latest (NY Comex) quotation I have is Thursday Feb. 23, 1984: Au/oz.t. = 399.10 FRN and Au/oz.t. = 9.775 FRN this would lead through the above equations to be: 1 FRN = $0.0516 This is only the "tip of the iceberg" on this issue. I apologize for not making your day. Only one last question ... Are any of you making the minimum wage? Warren N. Shadwick
mauney@ncsu.UUCP (Jon Mauney) (02/28/84)
teldata!shad produces an amusing argument relating the value of the
Federal Reserve Note (our motto: "Legal Tender for All Debts, Public
and Private") to the value of true and legal money, being a gold coin
weighing 25.8 grains of .9 fine. I have neither the training nor the
interest to argue the interpretation of Constitution and statute concerning
money, including the meaning of the phrase "gold and silver coin".
All I have to say is:
So What?
(well almost all.) Why does anyone think that using gold for money will
improve anything? Gold is a very useful material, and it should not be
squandered on coins nor hoarded in a vault. It should be made into wedding
rings, dental repairs, and electrical contacts. It is too precious to
waste. Paper money, on the other hand, is based on cotton, a renewable
resource. Using gold for money gives the impression that money is
worth something. This mistaken impression is, I believe, the root cause of
most of the evil in the world today.
--
Jon Mauney, mcnc!ncsu!mauney (have you ever heard of anyone being
North Carolina State University crucified on a cross of paper?)hutch@shark.UUCP (02/28/84)
<Wombats never study law> I printed the original article and posted it on the wall near my desk. I may take it down soon, too many depressed/confused faces are showing up. One thing I noticed, the phrasing said "prohibits States ... " and I cannot confirm from any handy source that this is the real implication. If the Constitution in fact uses wording which implies that states (NOT the Fed. Govt.) are limited in what they can make legal tender, then there is still nothing which says the Fed cannot make whatever IT wants to into legal tender. Right? So, all the original article was really saying was that IF a state was to mint a dollar coin, it would have to be made from the proper alloy of gold and silver, and that if such a dollar were to be made, it would cost ~20$ to make. I suspect that the true value of the dollar can more reasonably be calculated by analysis of the GNP and national debt. In which case, it may actually be worth a negative amount. Hutch
shad@teldata.UUCP (Warren N. Shadwick) (03/01/84)
* Oh, no! Don't encourage him. The answer to "so what?" raised by Jon Mauney in North Carolina in relation to my fair market value of FRN article is one many people might ask but one that history has already taught us the answer. I agree that many things have been used as a medium of exchange of labor for labor (which is indeed the true value of money). Even clamshells have been used for barter and the early colonists used wampum and their records show a rate of exchange (fair market value) being set by the colonies. The most successful and honest money systems have, however, been linked to an item that has value by virtue of its scarcity, usability, and desirability. These are the very reasons used by Jon to defeat the idea. Money systems based on a valuable base have been incorruptible in and of themselves. The recent fiasco of the Continental Dollar, printed by the new Confederation, (and worthless in the hands of the last holder), was fresh in the minds of the men who sat 4 hot months in the summer of 1787 drafting a Constitution for the United States. The men led by the wise Judge Roger Sherman of Virginia wanted for all time to block the "friends of paper money" from repeating the lesson of the 'Continental'. He and his backers were successful in adding those glorious words to Article I, Section 10. He thought this would forever put the new Union on a valid monetary system. It wasn't until our present century that the will of this great man was defeated. It has been truly stated that if we do not learn from history we are destined to re-live it. The German Mark at the close of WWI is another example of an unbacked money system failing. Reports contend that it took a wheelbarrow full of Marks to buy a loaf of bread. And it was cheaper to wall paper rooms with the "renewable" currency than to buy wall paper with it. We can do nothing and argue this issue forever until our money becomes worthless, but no danger in that it is already worth less. But we really don't want to know any of this, do we? It's much easier to close our eyes, get along, and just let things be. "Ignorance is Bliss" -- George Orwell, "1984". Yours Always in Freedom, Warren N. Shadwick
gam@proper.UUCP (Gordon Moffett) (03/06/84)
> From: shad@teldata.UUCP (Warren N. Shadwick) > But since Article I Section 10 of the United States Constitution pro- > hibits States from making "any Thing but gold and silver coin a tender > in payment of debts", only the gold and silver coin is the true money > of account of the U.S. Look closely, it does not say gold or silver > coin nor does it say gold and/or silver coin, it says gold AND silver > coin. The wording, as it should be in law, is exact and binding. Look more closely. It refers to the limitations on STATES, not the federal government. Furthermore, in Article I Section 8 we find: "The Congress shall have power ... to coin money [and] regulate the value theirof...", which theirby usurps the States power to coin money. > this would lead through the above equations to be: > 1 FRN = $0.0516 Your Federal Reserve Notes have value not because they can be exchanged for some amount of gold or silver (which are after all just other commodities one can buy with FRN's), but because all of us have collectively agreed to say "$1 buys a dozen eggs" or "$8000 buys a new car" -- money has worth because we believe it has worth, and because we are willing to exchange it for goods and services. Money is worth what it buys, nothing more. From intelca!hplabs!zehntel!dual!onyx!amd70!decwrl!decvax!ucbvax!ucbcad!tektronix!uw-beaver!teltone!teldata!shad Wed Dec 31 16:00:00 1969 Relay-Version: version B 2.10.1 6/24/83; site proper.UUCP Posting-Version: version B 2.10.1 6/24/83; site teldata.UUCP Path: proper!intelca!hplabs!zehntel!dual!onyx!amd70!decwrl!decvax!ucbvax!ucbcad!tektronix!uw-beaver!teltone!teldata!shad From: shad@teldata.UUCP Newsgroups: net.legal Subject: Paid in Dollars? Message-ID: <243@teldata.UUCP> Date: Fri, 24-Feb-84 12:30:15 PST Date-Received: Tue, 28-Feb-84 10:55:46 PST Organization: Teltone Corp., Kirkland, WA Lines: 58 * Are you really being paid in dollars? By statute (made law by being upheld in Boric v. Trott, PA., 5 Phila. 366, 404) "the definition ... [of] 'dollar' is a silver coin weighing 412 1/2 grains or a gold coin weighing 25 4/5 grains of 9/10 fine alloy of each metal [gold and silver]. But since Article I Section 10 of the United States Constitution pro- hibits States from making "any Thing but gold and silver coin a tender in payment of debts", only the gold and silver coin is the true money of account of the U.S. Look closely, it does not say gold or silver coin nor does it say gold and/or silver coin, it says gold AND silver coin. The wording, as it should be in law, is exact and binding. If Federal Reserve Notes (FRNs) are not redeemable at any Federal Reserve bank into real money, meaning the money of account of the United States (just try) then a "fair market value" must be placed upon these obligations. Since the New York Commodity Exchange (Comex) daily affixes a value by which you can convert FRNs into gold or silver a source exists, although in reverse, for setting a fair market value for FRNs. Precious metals are weighed in the troy system where a pound troy is 12 oz.t. and 1 oz.t. is 480 grains. Hence: $ 1 FRN = --------------------------------------------- 0.04842 * Au/oz.t. + 0.00537 * Ag/oz.t. where: 0.04842 = 9/10 of coin * 1/.999 fine * 1/480 oz.t/grain * 25.8 grains and 0.00537 = 1/10 of coin * 1/.999 fine * 1/480 oz.t/grain * 25.8 grains At the latest (NY Comex) quotation I have is Thursday Feb. 23, 1984: Au/oz.t. = 399.10 FRN and Au/oz.t. = 9.775 FRN This is only the "tip of the iceberg" on this issue. I apologize for not making your day. Only one last question ... Are any of you making the minimum wage? Warren N. Shadwick
gam@proper.UUCP (Gordon Moffett) (03/06/84)
> From: shad@teldata.UUCP (Warren N. Shadwick) > But since Article I Section 10 of the United States Constitution pro- > hibits States from making "any Thing but gold and silver coin a tender > in payment of debts", only the gold and silver coin is the true money > of account of the U.S. Look closely, it does not say gold or silver > coin nor does it say gold and/or silver coin, it says gold AND silver > coin. The wording, as it should be in law, is exact and binding. Look more closely. It refers to the limitations on STATES, not the federal government. Furthermore, in Article I Section 8 we find: "The Congress shall have power ... to coin money [and] regulate the value theirof...", which theirby usurps the States power to coin money. > this would lead through the above equations to be: > 1 FRN = $0.0516 Your Federal Reserve Notes have value not because they can be exchanged for some amount of gold or silver (which are after all just other commodities one can buy with FRN's), but because all of us have collectively agreed to say "$1 buys a dozen eggs" or "$8000 buys a new car" -- money has worth because we believe it has worth, and because we are willing to exchange it for goods and services. Money is worth what it buys, nothing more.
gam@proper.UUCP (Gordon Moffett) (03/07/84)
> From: shad@teldata.UUCP (Warren N. Shadwick) > It has been truly stated that if we do not learn from history we > are destined to re-live it. The German Mark at the close of WWI > is another example of an unbacked money system failing. Reports > contend that it took a wheelbarrow full of Marks to buy a loaf of > bread. And it was cheaper to wall paper rooms with the > "renewable" currency than to buy wall paper with it. Oh, if you think PAPER money is bad, guess what you're REALLY getting paid in? Itty-bitty electrical charges on computer disks of financial institutions! What a dreadfully transient thing for an economy to be based on! Indeed, if you understood why the old German Mark failed, you would understand that it is not paper money that is the danger, but foolish management of a country's currency (in addition to the historical perspective of Germany being forced to pay more in reparations that realistically could've). Obviously paper money works, our whole economy is based on just that. Does that mean that someday our paper dollars will be worthless? Probably. Nothing lasts forever. So by all means I encourage you to learn from history. Learning a bit about economics wouldn't hurt either. > "Ignorance is Bliss" -- George Orwell, "1984". (And learn more about literature, too.)
tac@teldata.UUCP (tac) (03/08/84)
Gordon Moffett seems to be confused on the issues of the constitution as it applies to gold, silver and money. The Constitution denies the states the ability (right) to make other than gold and silver coins legal tender (i.e. they cannot say that for debts in the state of Idaho we will accept potatoes as legal tender). The reason for this is that during the mid-1700s there were many states making laws which allowed only their own notes (printed "money") legal tender. When you came into that state to conduct business you were forced to exchange the currency of the state from which you came for the new currency at an extremely unfavorable rate. This made interstate commerce next to impossible. Therefore, the framers of the Constitution very carefully worded this section of the document (as they did all sections) so as to preclude this possibility in the future. The Constitution was written at a time when paper money had been inflated to the point where it was worthless (as Warren Shadwick and others pointed out), so as a remedy to this the wording was put in that one of the powers given to the Federal government was to "coin such moneys as are necessary." The purpose of this phrase was to prevent use of paper money again, and to allow for coining only enough gold and silver to supply the need, not to over-supply (thus leaving plenty of it for rings and teeth and other ornamental and utilital uses). If the world still used gold as a standard there would not be as much stockpiling of gold as there is. If you have no paper money you need not have a store of gold to back it with. Only something with intrinsic value could survive as a medium of exchange, since both the buyer and seller would be receiving something of obvious value and worth. Unfortunately, governments forget where power comes from and where it goes to. People create governments, not vica versa, and so we should see in whom the actual power is supposed to lie. It is an axiom of history however that a people get the government that they deserve and are willing to work for. We must be eternally vigilant (gosh that sounds trite these days) that our government not try to take onto itself powers which we have not invested it with. Finally for Mr. Moffett, you have said that money buys what it is worth, and given various examples of value (eggs, cars etc. vs the FRN), but you did not seem to listen to what you were saying. Calculating the value int the world today of the listed weight in gold which makes up one COINED dollar, we find that if we were on the gold standard we could buy that car for $400.00, and the dozen eggs for $.05. In light of that, how can you ever say that paper money is better? From the soap box of Tom Condon (!teltone!teldata!tac)
mauney@ncsu.UUCP (Baby You're a Rich Man Too) (03/22/84)
> Calculating the value in the world today of the listed weight in > gold which makes up one COINED dollar, we find that if we were on > the gold standard we could buy that car for $400.00, and the dozen > eggs for $.05. In light of that, how can you ever say that paper > money is better? To The Honorable Jesse Helms United States Senate Washington, DC Dear Senator, I am writing to encourage you to introduce a bill returning the United States to the gold standard. I believe that this would be a good idea because I have just been shown that if the U.S. were on the gold standard I could buy a dozen eggs for five cents and a car for four hundred dollars. Imagine how rich we'd all be! This would also be a good move for the Federal government, as the deficit could be eliminated; the cost of B-1 bombers would be similarly reduced. Therefore, I implore you, Senator Helms, to give up on the school prayer amendment and do something to really help the country. Remember, if I would rich, I'd probably vote for you in the next election. sincerely yours, -- Jon Mauney, mcnc!ncsu!mauney North Carolina State University
bcw@duke.UUCP (Bruce C. Wright) (03/23/84)
Hard money (gold or other precious metals) is *not* better than paper money because the hypothetical exchange rate to such a system would produce lower prices because, of course, everyone would have a smaller number of dollars or whatever your monetary unit was! Hard money's major advantage is that it is very difficult for governments to inflate the money supply by printing more; there is always an incentive for the government to inflate the money supply if doing so costs it less than minting coin whoseintrinsic value is close to its nominal value - then the government doesn't have to raise taxes (with all the problems that causes with the populace). And, of course, a sufficiently inflated money supply will destroy anyone's wealth who has kept that wealth in a form tied to the value of money ... unfortunately, this almost always includes (and falls most heavily upon) the old and the poor. Don't say it can't happen here like it did in Germany in the 20's ... it already has! Ever heard of a Continental? Bruce C. Wright