DOLLARS AND LAWFUL MONEY
Excerpts from *What Are We Using For Money?* by Paul Bakewell
"All history warns us against rash experiments
which threaten violent changes in our monetary
standard and the degradation of our currency.
The past is full of lessons teaching not only
the economic consequences but the national
immorality that follows in the train of such
experiments." -- Grover Cleveland, Message to
Congress of December 2, 1895
We have no real dollars, no real money and no real monetary
system in the United States. We have no Unit coin, such as our
former gold dollar. We lack entirely the coined money which the
Constitution contemplated and which was "lawful money."
The very word "Dollar" means a coin. The Joachimsthaler was the
original German silver coin. The word was corrupted to the
German "thaler" meaning a German silver coin, and the Spanish
silver coin used at the time of the discovery of America was
called the "dollar."
The first Coinage Act enacted in Congress in 1792 fixed the basic
coin at 371.25 grains of pure silver or 416 grains of standard
silver and called it the "dollar" or "Unit."
Because of its meaning, the word dollar is limited to a coin -- a
piece of metal stamped by the government. The stamp of the
government upon the particular coin was a guarantee that the
value of the coin was equal to the value stamped upon its face.
From 1792 down to 1934 we had real money -- coin stamped by the
government -- and the paper currency which was used was
convertible into coin upon demand.
The phrase "lawful money" at common law meant coined money and
nothing else. Our own courts had limited the phrase to coin.
Years ago the Supreme Court decided that when a marshal had been
ordered to collect a "certain sum in lawful money of the United
States" he could collect only coined money of the United States,
and could not accept depreciated paper currency. (Griffin &
Irwin vs. Thompson, 2 Howard 244; McFarland vs. Gwin, 3 Howard
In 1868 the Supreme Court unanimously said that nothing other
than coined money had been recognized by the legislation of the
national government as lawful money. (Bank vs. Supervisors, 7
Wallace, p. 30.)
Until 1934 the promise on our paper currency to pay "dollars" in
"lawful money" meant exactly what it said. Today we continue to
use the words dollars and lawful money out of habit and custom,
and overlook that we no longer have either dollars or lawful
Today  the Federal Reserve Notes promise payment in dollars
and state that they are redeemable in lawful money. [CN: No
longer true nowadays.] But what do those words mean?
Mr. A.F. Davis sent a Federal Reserve Note for $10 to the
Treasury Department and asked for $10 in lawful money. In reply
the Treasury Department sent him two $5 United States Notes,
which also promised payment in dollars. Mr. Davis then sent one
of those $5 Notes to the Treasury Department and demanded $5.
The Treasury Department returned that $5 note to Mr. Davis and
wrote that the term "lawful money" no longer had its former
The people established our government to protect their life,
liberty and property. How then may that government deprive the
people who established it of their right to own real money? How
could the government take gold from the people and then deprive
those people of their property by debauching the currency?
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(From July 1995 Conspiracy Nation Newsletter)
CONSPIRACY NATION: The way I understand it is, what's
backing up the dollar right now is, basically, people's
confidence in the government. And if people have no
confidence -- because there's no *gold* backing it up!
What's backing up the dollar?
SHERMAN SKOLNICK: There's *nothing* backing the dollar
now. It's legal tender, without any backing.