Back on May 11, 1911, The Star and Sentinel included a short article discussing “ten kinds of money, but not all of Uncle Sam’s assortment is legal tender.”
Uncle Sam officially has ten kinds of money – gold coins, standard silver dollars, subsidiary silver, gold certificates, silver certificates, treasury (1890) notes, United States (greenbacks) notes, national bank notes, nickel coins and bronze coins – says the Indianapolis News. While some of this paper currency is not legal tender, minor coins are legal tender in small amount. Legal tender is so called because in payment of a debt or obligation of any kind it can be forced on the creditor “in full of all demand.”
Gold certificates, silver certificates and national bank notes, despite the enormous quantity in circulation, are not legal tender. So far as silver coin is concerned, only $10 worth of “halves,” “quarters” and “dimes” are legal tender, and, as to nickel and copper coins, only 25 cents can be forced on the creditor. However, with the standard silver dollar there is no limit to the amount to be paid in liquidation of a claim. The creditor can refuse the silver certificate, but when it comes to the “dollar of the dads” the dollar must be received at its face value, even if a thousand weigh 58.92 pounds.
In the ensuing years since the article was written, monetary changes took place that made much of their information no longer true and made most of the listed money types into collectors’ items.
For example, in 1934 President Roosevelt made it illegal for Americans to hold gold. Until after Congress and President Ford changed the laws for private gold ownership, the US Mint did not produce gold coins again until the commemorative Olympic gold $10 coin in 1984. A few years earlier they produced gold medallions – not coins – to recognize artists, but the public interest did not make the medallion program feasible.
With an increase in silver prices in the early 1960s, the Coinage Act of 1965 removed silver from the quarter and dime coins and reduced the silver to 40% in the Kennedy half dollar coins. By 1971, silver was gone from all of the circulating coinage. Special collector sets are available for a variety of years where the dime, quarter and half dollar are, once again, 90% silver. Plus, there are special sets containing 40% silver coins, some of which include the Eisenhower dollar.
Of course, with the prices of both silver and gold today, having either gold or silver coins can be rewarding, and if they are rare, even more rewarding.
But another aspect of the article changed with the Coinage Act of 1965 as well as the change in the coins’ metal composition.
All coins became legal tender and were no longer limited to $10 or $0.25 in payment of debt.
In Section 5103 of the United States Code, Legal Tender is now described as:
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.
But, at the same time, the Treasury Department clarifies the legal tender statement. Even though the coins produced by the US Mint are legal payment for debts, there are no laws that force businesses, persons or organizations to accept all forms of coins and currency. In other words, if someone does not want pennies or $100 bills, for example, they can legally choose not to accept them for payment. They should, however, make it clear what forms of payment they will accept.
It’s interesting to go back in time and to look at what a difference a hundred years makes – in the paper money, in the coins and in the monetary rules. For collectors and investors, changing the money, coinage and rules builds collections and increases values.