Money is about expected future value....nothing more, nothing less

Tim May tcmay at
Sun Dec 8 10:01:30 PST 2002

On Sunday, December 8, 2002, at 09:26  AM, Steve Schear wrote:

> At 06:19 PM 12/8/2002 +0200, you wrote:
>> Errata: "companies are forbidden from accepting them as payment" is, 
>> of
>> course, "companies are REQUIRED TO accept them as payment".
>> Sorry.
>> Mark
>> ----- Original Message -----
>> From: "Marcel Popescu" <mdpopescu at>
>> > The reason the IOUs emitted by the Bank of England were *initially*
>> accepted
>> > was that they were redeemable in gold or silver. *One* reason they 
>> are now
>> > accepted is that they are legal tender - you can pay your taxes 
>> with them,
>> > and companies are forbidden from accepting them as payment.
> I seem to recall there are still provisions in the statutes for 
> contracts to be fulfilled by whatever therms are spelled out.  For 
> example, if a contract requires that you deliver pork bellies, you 
> cannot merely substitute the cash value of the porkers.

Mark cited the Bank of England, not U.S. law. I don't know what British 
law is in this regard.

But I will tell you that the notion that U.S. dollars must be accepted 
as "payment" in the U.S. (using the variant that corrects Mark's 
typographical error above) is false.

The language is along the lines of "this note good for all debts public 
and private." This does not stop parties from agreeing to transfers in 
yak brains, or houses, or gold, or tantalum.

It says that if Alice agrees to pay Bob 50 dollars ($50), with no 
special payment instructions agreed to, and Alice at some point gives 
Bob a $50 piece of U.S. currency, she has fulfilled her debt obligation 
under U.S. law. I surmise, but have not verified, that this sort of 
language was added to banknotes to better ensure that people accepted 
the banknotes as being equivalent to specie (gold and silver).

--Tim May
"Stupidity is not a sin, the victim can't help being stupid.  But 
stupidity is the only universal crime;  the sentence is death, there is 
no appeal, and execution is carried out automatically and without 
pity." --Robert A. Heinlein

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