How often does one look at the fine print on the currency in their pocket? If you’re like the majority you haven’t thought about it until now. Why would anyone care about the words on their currency in the first place? As long as it spends that’s all that matters right? Wrong.
The wording on paper currency tells a story that you would never know unless you knew exactly what you were looking for.
If you were to look at the evolution of fiat currencies, every note tells a story of how it became worthless in value today than decades ago. This slow erosion of purchasing power has multiple explanations, but it all starts with understanding Legal Tender.
The two words Legal Tender weren’t in the minds of Americans until the question of what was the official unit of account deemed lawful in the United States.
At the start of the Civil War the idea of using paper currency along with specie (coin money) became the turning point of the monetary system in the19th century. The only reason this topic of what should be used as the official money of the U.S.A was because of the re-introduction of paper currency (bills of credit) to fund the governments war.
The words “Legal” and “Tender” were brought into question when it came to what a person would accept as payment to settle debts. Until this point the idea of receiving paper currency as a means payment wasn’t something people wanted. Everyone knew paper was just that, paper. It had no value or worth other than what the government enforced. Hence the word Legal was introduced because the government made it enforceable by law.
The idea of exchanging value for value is the act of tendering something in exchange. You tender something of value in the direction of someone who in return is tendering something back your way. So the word tender is simply the first action or the event of holding a thing out toward a prospective recipient.
In order to promote and encourage the people’s support and confidence the words Legal Tender were added onto paper currency. One would assume that if you had to advertise the notion that the paper has value then you can automatically tell the political hoax behind it. But decades later very few people, if any, ever questioned the idea of having paper with numbers on it as something of value.
Fast forward to the 20th century when the idea of paper currency had become the norm, it didn’t take long to further deceive the people by altering the words and letters in the confidence statement which included the words “Legal Tender”. After the Civil War the usage of monetary metals and paper currency went hand in hand. The paper currency issued by the private banks and later the central bank were claims to an ounce of gold or silver only. Each note included the confidence statement, “This NOTE is A Legal Tender for all debts, public and private“.
Each piece of paper was a claim to a specific piece of metal stored in the vault of the United States Treasury or a commercial bank. What made this statement unique was the letter, “A” before the words Legal Tender. This single letter known as an indefinite article means a lot when it comes to understanding money. When included in the sentence it emphasizes the idea of multiple options or more than one. It opens up the idea that there could be more than one form of legal tender available. The picture referenced here is a 1953 United States Note of which the indefinite article (A) is included. At this point in time people still knew that specie (gold and silver coin) were still options available to use.
The next picture is that of a 1963 United States Note. In that short period of time a lot happened in the monetary system that made the idea of having options not good for the public. The idea of attaching redeemable paper currency to specie, in particularly, silver was beginning to cause a problem in the distorted face value and monetary value of paper and silver coins. Silver dollars where worth more in the melt value than in the face value the government placed on the paper. People began melting down the coins and reselling them for more than the government was willing to trade the notes for.
The statement on the 1963 note makes all the difference in the world in understanding legal tender. When the letter (A) was removed from the confidence statement it made the piece of paper the only item of value recognized by the government as a tender of value. No longer would the government honor or admit the value of specie in the nation’s monetary system. Basically stating that if you want to receive payment you will only have the option of being paid in paper and no longer specie.
After the 1970’s, the legal tender statement attached to what is now the only legal form of payment is what’s written on the 1963 United States Notes. THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE.
This single letter missing from that statement might seem like no big deal whatsoever. However, for those that understand the importance of monetary metals know that unbacked fiat paper or government authorized I.O.U’s at the end of the day don’t add up to much in value. For those that understand how debt and worthless paper go hand in hand should also recognize the importance of how removing a single letter spells trouble. Since the removal of that letter from paper money the printing press has been running non-stop and all that excess paper has indebted the nation and syphoned the tangible wealth of the masses into the hands of a small few. It is because of this demonetization of specie from the monetary system that inflation (increased supply of fiat currency) has made the rich richer and the poor poorer.
Now I hope you can understand why a single letter makes such a huge difference.
Thoughts??? Have you ever stopped to closely examine a currency note? If not, what are your thoughts now?
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