Talk:Silver Certificate

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[edit] Silver Certificates, not FRNs!

I appreciate the enthusiasm of 129.137.181.252, but this article about Silver Certificates only! The Federal Reserve Notes are endorsed by the U.S. Government, otherwise there wouldn't be a department devoted to printing them. The section you added is more appropriate for the Federal Reserve Note article because your addition doesn't deal with Silver Certificates. Even if Federal Reserve Notes can be backed by silver in the future, they are still FRNs.

"Silver Certificates were abolished by Congress on June 4, 1963 and all redemption in silver ceased on June 24, 1968. Thus, the United States no longer has a paper currency that is legal tender for the purchase of goods & services, as any vendor may refuse to accept Federal Reserve Notes as officially stated at: http://www.treasury.gov/education/faq/currency/legal-tender.html#q1 However, the Federal Reserve Act has a poison pill provision which requires all said Notes to be redeemed in silver if Congress ever decides to abolish it. At such time a $1 Note should have the market value of one ounce of silver. In the meantime, the market has discounted such a possibility by valuing a $1 Note to be the amount of silver that it will buy as the inverse of the current spot price per ounce."

By the way, could someone please post a link to the "poison pill" clause of the Federal Reserve Act of 1913?

If no one replies to this post by December 31, 2005, this section will be deleted. If you are the author of the questioned section, please write on this page your reasoning behind the addition.

-rcnj Numismatic Article Writer

Edited To Add (10-20-2005): It already appears someone has taken the initiative in removing this material.

[edit] Poison pill clause

In addition to the lack of citation, this paragraph makes assertions unlikely on their face. Since a silver dollar was not one ounce fine at the time of passage of the Act, I cannot believe that redemption ounce-for-dollar would be provided for. This whole section looks OR and doubtful. Robert A.West (Talk) 20:18, 26 November 2006 (UTC)

The US mint quotes the Law of 1792 as defining a dollar as "three hundred and seventy-one grains and four sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver". An ounce Troy Avoirdupois is 437.5 grains, and therefore this may be either a rounding by the source, or a 5% premium, which is not prohibitive.
I note with some amusement that the Eagle is defined as "EAGLES--each to be of the value of ten dollars or units, and to contain two hundred and forty-seven grains and four eighths of a grain of pure, or two hundred and seventy grains of standard gold." This is 15.4:1.
Crime of 1873 does not belong in the intro under that name; even in scare quotes, that's not neutral phrasing. Septentrionalis 20:59, 27 November 2006 (UTC)
But the 1792 act was not in force when the Fed was established. The Morgan and Peace dollars were the current circulating dollars at the time, at 338.38 grains fine, which is considerably less than an ounce. Robert A.West (Talk) 08:01, 28 November 2006 (UTC)
Source? This site says 412.5 grains of .900 silver, which would be 371.25 grains fine. But I have made (and now correct) a far more serious error, which leads me to agree in doubting this; the odds that any currency act would involved avoirdupois ounces of silver is wanishingly small. Septentrionalis 18:13, 28 November 2006 (UTC)

I've removed it again: with tags, it was

However, the Federal Reserve Act has a poison pill provision which requires all said Notes to be redeemed in silver if Congress ever decides to abolish it (subject to Congress amending that provision).[citation needed] At such time a $1 note should have the market value of one ounce of silver.[dubious – discuss] In the meantime, the market has discounted such a possibility by valuing a $1 note to be the amount of silver that it will buy as the inverse of the current spot price per ounce.[original research?]

Sources for any of this are welcome. Septentrionalis 00:15, 30 November 2006 (UTC)

[edit] Clarify: Payment of a debt versus purchase of goods and services

Various unsourced edits have been reverted, including edits that resulted in the following erroneous passage:

Thus, U.S. Federal Reserve Notes are not a paper currency that is legal tender for the purchase of goods and services, as any vendor may refuse to accept them, according to the U.S. Treasury.[1] Thus, U.S. Federal Reserve Notes are not legally backed by the goods and services of the U.S. economy.

Some of these statements are true and some are false; overall, the material does not follow logically from the material provided.

The statement that "U.S. Federal Reserve Notes are not legally backed by the goods and services of the U.S. economy," whether correct or not, has little to do with whether the Notes are a paper currency that is "legal tender for the purchase of goods and services." Likewise, the fact that a vendor may refuse to accept the Notes for the purchase of goods and services does not mean that the Notes are not legal tender for payment of debts.

The phrase "paper currency that is legal tender" relates to satisfaction (payment) of debts (pre-existing obligations), not purchase of goods and services (which instead involve contemporaneous exchanges). Yes, any vendor may refuse to accept cash in payment of goods and services, as documented in the link to the Treasury department web site. A payment of goods and services in this context means a contemporaneous exchange, such as buying a hamburger at McDonald's. This is not a "payment of a debt" for purposes of the term "legal tender."

By contrast, if you owe McDonald's ten thousand dollars for a bunch of hamburgers you bought at McDonald's "on credit" a long time ago, then a tender of Federal Reserve notes in payment of that pre-existing debt would be a legal tender, and McDonald's would probably have no realistic choice but to accept the cash.

In short, the "source" provided -- the Treasury web site -- is not really a valid source for the claim that was being made in the article. Yours, Famspear 23:51, 14 January 2007 (UTC)

[edit] Explain William Windom and "$2 silver certificate"

Will somebody please explain this image, and the claims about it at William Windom. There is absolutely nothing about it in this article. Is this just a hoax somebody has foisted upon us? Gene Nygaard (talk) 17:59, 21 November 2007 (UTC)