Legal Reason For Legal Tender Amounts?

The thread awhile ago about tax evasion (paying employees in
gold/silver coins) made me wonder...

Why do bullion coins from national mints have a legal tender
value?

They don't only say, "Once Ounce Silver." Or, "One Once Gold."

Instead, they also say, "One Dollar." Or, "Five Dollars."

Why?

I mean, this goes for stuff like the American Silver Eagle, to
the Silver Maple Leaf, to the New Zealand Silver Dollar (my
favourite) and so forth.

And one ounce of silver doesn't come anywhere near one dollar, in
any of those currencies. And the discrepancy with gold coins is
even more. Like, why should a one ounce gold coin claim five
dollars American, or fifty dollars Canadian, or whatever the
respective mint stamps on it?

Huh? Why?

For example, my understanding of the American founding documents
includes a specific idea of how "One Dollar" relates to a certain
amount of silver. And that is why this here Morgan dollar on my
desk is a particular weight. ...But it isn't once ounce per
dollar...

So, I am wondering... Is there some law in various countries that
says the official mint has to stamp a specific currency amount on
the bullion (e.g. ASE)? Along with NCLT (like the NZ Silver
Dollar)? And what law says that the "legal tender" amount is
what it is (so far below metal value)?

Huh? Why?

Thanks...


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wrote in message
...
The thread awhile ago about tax evasion (paying employees in
gold/silver coins) made me wonder...

Why do bullion coins from national mints have a legal tender
value?


Can't say for sure, but I could (legal) tender a suggestion.

Nominating a face value for such issues changes completely the "status" of
the coins - i.e. they become "coins", rather than just "medallions" or lumps
of bullion.

That status would then grant then certain measures of protection from
forgery, defacement and so on. It grants the coins the guarantee of the
mint, which unmarked medallions may not have. It also, unquestionably,
makes them more attractive to collectors, which in turn makes them a more
attractive proposition for the mint. (Which, after all, is really only
interested in the profit they'll turn.)

AFAIK, it doesn't increase the cost of production to the mint, but
significantly increases the value of the product. Hell, why not?

I don't think anyone ever expects them to be tendered at the corner store at
face value.

Maybe if the gold price tumbled....?

--
Jeff R.

"Jeff R." wrote:

I don't think anyone ever expects them to be tendered at the corner
store at face value.

Maybe if the gold price tumbled....?

I came very close to doing just that. Consider the following coin:
http://cgi.ebay.com/ws/eBayISAPI.dll...m=320160123494

It has a face value of $100 (at par with the U.S. dollar) and a
gold weight of 0.1755 troy oz. When gold was about $300 per ounce,
this thing would occasionally sell on eBay for a couple of bucks
above face value including shipping.

A couple of times, it looked like I would be heading to the
Bahamas for a long weekend. Had one of those trips panned out,
I would have brought one along and tried to spend it, thereby
making it both the first gold coin and first proof coin I've
knowingly put in circulation.

Should the occasion arise, I might still do so, but $55 is a bit
steep for a private joke.

--
Michael Benveniste --
Spam and UCE professionally evaluated for $250. Use this email
address only to submit mail for evaluation.

"Michael Benveniste" wrote in message
...
"Jeff R." wrote:

I don't think anyone ever expects them to be tendered at the corner
store at face value.

Maybe if the gold price tumbled....?

I came very close to doing just that. Consider the following coin:
http://cgi.ebay.com/ws/eBayISAPI.dll...m=320160123494

It has a face value of $100 (at par with the U.S. dollar) and a
gold weight of 0.1755 troy oz. When gold was about $300 per ounce,
this thing would occasionally sell on eBay for a couple of bucks
above face value including shipping.

A couple of times, it looked like I would be heading to the
Bahamas for a long weekend. Had one of those trips panned out,
I would have brought one along and tried to spend it, thereby
making it both the first gold coin and first proof coin I've
knowingly put in circulation.


Back in 1987 Japan issued a 100000 Yen commemorative gold coin for the 60th
anniversary of the Showa Era(Reign of Emperor Hirohito) that the face value
on was greater than the gold value. This coin actually spawned counterfeits
because the value of the metal was less than the face value of the coins.

Canada issued a $300 Maple Leaf Coin with 1 oz. of gold several years ago
that briefly had a greater face value on when gold dipped to $254 in 1996.

I have never spent a gold coin, probably never will. I have spent high
value silver ie 100 FF in France, and 10 DM coins in Germany before the
Euro.

wrote:
The thread awhile ago about tax evasion (paying employees in
gold/silver coins) made me wonder...

Why do bullion coins from national mints have a legal tender
value?

It gives much better protection in international law.
All countries have laws which make counterfeiting
of foreign currency a crime equal to counterfeiting
domestic money. The face value doesn't have to be
stated on the coin - the gold sovereign doesn't say
"one pound" on it, but it is understood to have a
face value of a pound.

If it is just a gold disc with no official monetary
value then making copies could be a trademark violation
rather than a violation of monetary laws.

Peter.
--

On Oct 25, 9:40 am, Peter Irwin wrote:
wrote:
The thread awhile ago about tax evasion (paying employees in
gold/silver coins) made me wonder...

Why do bullion coins from national mints have a legal tender
value?

It gives much better protection in international law.
All countries have laws which make counterfeiting
of foreign currency a crime equal to counterfeiting
domestic money. The face value doesn't have to be
stated on the coin - the gold sovereign doesn't say
"one pound" on it, but it is understood to have a
face value of a pound.

If it is just a gold disc with no official monetary
value then making copies could be a trademark violation
rather than a violation of monetary laws.

Peter.
--


Jeff P hit it on the head - if there is no denomination, then
technically it's not a coin, it's a medal or token.

You can't sell medals in the U.S.A.

Look at the Franklin Firefighter Medal (1993) and the recent Franklin
Silver Dollar. Both were silver dollar sized, both products of the
U.S. Mint, both good silver. Perhaps the medal was better designed
than the coins.

The Mint maybe sold 35,000 medals in two years and they sold out the
coins (was it 350,000 coins of each design?) in about one day.

In the U.S.A., no denomination means NO SALES.

oly

On Fri, 26 Oct 2007 09:00:01 -0700, oly wrote:

Jeff P hit it on the head - if there is no denomination, then
technically it's not a coin, it's a medal or token.

You can't sell medals in the U.S.A.

Look at the Franklin Firefighter Medal (1993) and the recent Franklin
Silver Dollar. Both were silver dollar sized, both products of the
U.S. Mint, both good silver. Perhaps the medal was better designed
than the coins.

The Mint maybe sold 35,000 medals in two years and they sold out the
coins (was it 350,000 coins of each design?) in about one day.

In the U.S.A., no denomination means NO SALES.

I wonder what the sales figures for the first spouse medals will be?
I'm sure I'm not alone when it comes to spending either $400+ or $3.50
that I chose to spend $3.50.

Hmm.. I see the Mint is now selling a 4 medal set for $12.95. Darn, I
should of waited. Maybe I'll still get it and just have 2 of each.
It's not like it is $1600.