In message <9408091725.AA22702@ah.com> Eric Hughes writes:

If A writes a check to 'cash', pays B with it, and B passes it on to C, and so forth, are you saying that this is or will one day be illegal?

An individual note and its transfers are unlikely to be made illegal. But that's not the whole story. A company engaged in the business of issuing such notes and not recording (perhaps, a fortiori, by not being able to record) the transactions among people for these instruments, however, could be ruled to be performing a separate activity which could then be made illegal.

Yes. But my initial point was that a check for $1.00 does not constitute an alternative currency and you do not seem to be disagreeing with this. 'Therefore' if e$1.00 is essentially a promise to pay one US dollar, and if that $1.00 is on deposit with a bank somewhere, and if that bank will pay out US$1.00 when the e$ "check" is presented, the Feds will not be able to prosecute anyone for using an illegal currency.

Just because a single act is legal doesn't mean that a bunch of the same acts are. For example, not reporting a $5000 cash transfer is legal, but not reporting half a dozen of them made to the same person in the same day almost certainly is.

Yes. But you must remember my original point. I think that whether the $5000 is transferred as greenbacks or as $e is irrelevant, if the creation of $e is handled correctly. I think that if you look back through the recent postings on $e, you will find that in many cases a discussion which seemed to be about $e is actually about something else. You could substitute US$ for $e without changing the substance of the postings.

A company engaged in the business of issuing such notes and not recording (perhaps, a fortiori, by not being able to record) the transactions among people for these instruments, however, could be ruled to be performing a separate activity which could then be made illegal.

Every bank in the United States that allows checks to be made out to cash already does this. A second point, relating to this paragraph: obviously, a foreign bank cannot be constrained in the same way to report financial transactions to US authorities. We have all heard of Swiss bank accounts. So I think that if a company issued $e "checks" denominated in US $ and if a foreign bank were willing to pay against the checks upon demand, then (a) the $e checks would not violate the Constitutional provisions against alternative currencies and (b) neither the foreign bank nor the foreign company issuing the checks would have to make any reports to US authorities. Our company is a UK company. We can easily open a US$ account at the bank down the street. We could then write US$ checks made out to cash. Our bank would not object, any more than they already object to the sterling checks that we occasionally make out to cash. If the US government tried to force either us or our bank to file reports with them, we would simply laugh at the requirements. -- Jim Dixon