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From: leichter@yale-com.UUCP (Jerry Leichter)
Newsgroups: net.misc
Subject: Re: $20 bills, and so forth
Message-ID: <2729@yale-com.UUCP>
Date: Mon, 16-Jan-84 17:10:38 EST
Article-I.D.: yale-com.2729
Posted: Mon Jan 16 17:10:38 1984
Date-Received: Wed, 18-Jan-84 01:22:20 EST
References: mi-cec.191
Lines: 19

"Lawful money" on old bills:  Up until 197?, American money was legally backed
by gold (or silver?).  You could theoretically take your dollar bill down
to the Treasury at any time and demand your 1/35'th ounce of gold.  A bill
was marked as a "gold certificate" to indicate that it was merely a place-
holder for gold in a government vault.  When the amount of money in circulation
could no longer be backed by the gold available, "silver certificates" were
added.  "Lawful money" was either of these, or the actual gold or silver.

In 197? - some time during Nixon's first term, during a major international
monetary crisis - the US went "off the gold standard"; your dollar bill is
not even theoretically backed by gold.  (In fact, the backing has been
theoretical for a long time - since the 1930's - since between 193? (5?) and
197? American citizens were not allowed to own gold (I don't know how the
exceptions for jewelry, gold fillings, etc. were formulated).  Your dollar
bill in principle was convertible to gold, but in fact the US would only
do the conversion for other governments.  Today, you can own all the gold
you can afford - but the government is not under any obligation to convert
bills to gold for anyone, private citizens or governments.)
							-- Jerry