Legal Tender Status
I
thought that United States currency was legal tender for all debts.
Some businesses or governmental agencies say that they will only accept
checks, money orders or credit cards as payment, and others will only
accept currency notes in denominations of $20 or smaller. Isn't this
illegal?
The pertinent portion of law that applies to your question is the Coinage Act of 1965,
specifically Section 31 U.S.C. 5103, entitled "Legal tender," which
states: "United States coins and currency (including Federal reserve
notes and circulating notes of Federal reserve banks and national banks)
are legal tender for all debts, public charges, taxes, and dues."
This statute means that all United States money as identified above
are a valid and legal offer of payment for debts when tendered to a
creditor. There is, however, no Federal statute mandating that a private
business, a person or an organization must accept currency or coins as
for payment for goods and/or services. Private businesses are free to
develop their own policies on whether or not to accept cash unless there
is a State law which says otherwise. For example, a bus line may
prohibit payment of fares in pennies or dollar bills. In addition, movie
theaters, convenience stores and gas stations may refuse to accept
large denomination currency (usually notes above $20) as a matter of
policy.
What are Federal Reserve notes and how are they different from United States notes?
Federal Reserve notes are legal tender currency notes. The twelve
Federal Reserve Banks issue them into circulation pursuant to the
Federal Reserve Act of 1913. A commercial bank belonging to the Federal
Reserve System can obtain Federal Reserve notes from the Federal Reserve
Bank in its district whenever it wishes. It must pay for them in full,
dollar for dollar, by drawing down its account with its district Federal
Reserve Bank.
Federal Reserve Banks obtain the notes from our Bureau of Engraving and Printing
(BEP). It pays the BEP for the cost of producing the notes, which then
become liabilities of the Federal Reserve Banks, and obligations of the
United States Government.
Congress has specified that a Federal Reserve Bank must hold
collateral equal in value to the Federal Reserve notes that the Bank
receives. This collateral is chiefly gold certificates and United States
securities. This provides backing for the note issue. The idea was that
if the Congress dissolved the Federal Reserve System, the United States
would take over the notes (liabilities). This would meet the
requirements of Section 411, but the government would also take over the
assets, which would be of equal value. Federal Reserve notes represent a
first lien on all the assets of the Federal Reserve Banks, and on the
collateral specifically held against them.
Federal Reserve notes are not redeemable in gold, silver or any other
commodity, and receive no backing by anything This has been the case
since 1933. The notes have no value for themselves, but for what they
will buy. In another sense, because they are legal tender, Federal
Reserve notes are "backed" by all the goods and services in the economy.
What are United States Notes and how are they different from Federal Reserve notes?
United States Notes (characterized by a red seal and serial number) were the first national currency, authorized by the Legal Tender Act of 1862
and began circulating during the Civil War. The Treasury Department
issued these notes directly into circulation, and they are obligations
of the United States Government. The issuance of United States Notes is
subject to limitations established by Congress. It established a
statutory limitation of $300 million on the amount of United States
Notes authorized to be outstanding and in circulation. While this was a
significant figure in Civil War days, it is now a very small fraction of
the total currency in circulation in the United States.
Both United States Notes and Federal Reserve Notes are parts of our
national currency and both are legal tender. They circulate as money in
the same way. However, the issuing authority for them comes from
different statutes. United States Notes were redeemable in gold until
1933, when the United States abandoned the gold standard.
Since then, both currencies have served essentially the same purpose,
and have had the same value. Because United States Notes serve no
function that is not already adequately served by Federal Reserve Notes,
their issuance was discontinued, and none have been placed in to
circulation since January 21, 1971.
The Federal Reserve Act of 1913 authorized the production and circulation of Federal Reserve notes. Although the Bureau of Engraving and Printing
(BEP) prints these notes, they move into circulation through the
Federal Reserve System. They are obligations of both the Federal Reserve
System and the United States Government. On Federal Reserve notes, the
seals and serial numbers appear in green.
United States notes serve no function that is not already adequately
served by Federal Reserve notes. As a result, the Treasury Department
stopped issuing United States notes, and none have been placed into
circulation since January 21, 1971.
http://www.treasury.gov/resource-center/faqs/currency/pages/legal-tender.aspx
» Azem clarifies its position on the law rejecting normalization with the Zionist entity
» The judiciary is discussing with the Ministry of Electricity the legal solutions to the problems fac
» Al-Kazemi: The government has performed its duties, and we have succeeded in overcoming many challen
» Al-Zamili: The failure to obtain a political agreement between the blocs does not mean disrupting th
» Al-Rasheed Bank launches a new meal of advances for three categories
» Oil prices continue to rise cautiously
» Dollar exchange rates against the dinar
» Oil: discussions to raise the production of the Rumaila field to one million and 700 thousand barrel
» The Parliamentary Oil and Gas Committee decides to host the Minister of Oil and his agents next week
» To expedite the implementation of gas investment contracts... The Minister of Oil meets the CEO of T
» The Ministry of Labor decides to grant a gift of 100,000 dinars to insured retirees
» Iran: We made progress in recent talks with Saudi Arabia in Baghdad
» Dollar exchange rates in Iraq
» The UN Security Council between Baghdad and Erbil to resolve the oil dispute
» I warned of a new "October" .. Bloc: Rerunning the elections is in the interest of the people on con
» Baghdad awaits "white smoke" from Erbil.. Kurdish understandings are a Trojan horse to end the polit
» 120 deputies sign to withdraw the hand of the Minister of Industry: 24 corruption files and trillion
» Al-Kazemi: Iraq has become one of the most important countries in the Middle East in terms of econom
» Al-Zamili: The absence of a political agreement does not mean that the work of Parliament will be di
» "Severe penalties"... Disclosure of the most prominent contents of the "Prohibition of Normalization
» The Ministry of Oil announces the final statistics of oil exports for the month of April
» Iraq.. is subject to this condition.. Parliamentary Finance denies knowing the most important featur
» Washington's new ambassador to Baghdad sets out the first tasks she will perform in Iraq ,
» In The Document.. Al-Zamili Calls For Allocating An Amount In The “Food Security” Law To Convert Lec
» Parliament Will Host The Minister Of Education Next Week
» The Central Bank: The banking sector has withstood great challenges and witnessed positive growth
» Central Bank Governor: We will continue to support the banking sector to develop the Iraqi economy
» In The Presence Of Blackshart.. The Start Of The National And Democratic Meeting At The Headquarters
» The Housing Fund confirms the continuation of granting loans and warns against commentators
» Mulla Bakhtiar: President Nechirvan Barzani's initiative is important, and whoever reduces concerns
» He denounced the threats against Kurdistan .. the Iraqi Ummah Party: Its goal is to prevent the regi
» The framework talks about “surprises” and studies the renewal of Al-Kazemi in exchange for “guarante
» Al-Kazemi and his Bulgarian counterpart exchange invitations to visit Baghdad and Sofia
» The Council of Ministers issues “electrical” decisions and “water” recommendations and conducts an i
» Document.. The Iraqi parliament allocates its next session to vote on a law banning normalization wi
» Al-Kifah and Al-Harithiya close at a decrease in the exchange rate of the dollar
» Al-Rasheed Bank launches a new meal from an advance of 5 and 10 million dinars
» Davos leaders: Food crisis could lead to trade war
» For the second day.. gold prices stabilize in the Iraqi markets
» With revenues amounting to 10 billion dollars .. Oil announces its final exports for the month of la
» 24,000 random housing units: the deputy governor holds the Minister of Interior responsible for hous
» Education for the World Bank: Evaluating education is not your business
» Oil Minister: We signed contracts to produce 2,500 megawatts
» Experts call for an increase in marine fishing operations in territorial waters
» Erbil is “threatened” in conjunction with a Kurdish-Kurdish agreement, and the security of Kurdistan
» Al-Sadr is preparing to lead a resounding demonstration similar to the October uprising
» An oil official: Most of the southern fields produce associated gas
» Ali Allawi: Cash reserves will reach more than 90 billion dollars by the end of this year
» The rise in oil prices is supported by a lack of supplies and the possibility of increasing demand
» The rise in the price of the dollar in the local markets
» Rising food prices... Sanctions against these traders
» Oil prices are rising again
» The vote on “banning normalization” includes the agenda of Thursday's session
» Expectations to resolve the presidential file soon!
» Al-Sadr's deadline is in a countdown... and there are no signs of a consensual government
» After rejecting its governmental version, the Food Security Law returns to the front of the parliame
» The Agriculture Committee holds a meeting to discuss the summer plan for this season
» The Parliamentary Regions and Governorates Committee discusses the emergency support law proposal
» Parliamentary meeting to discuss mechanisms for implementing the instructions of the Teacher Protect
» Within a day.. the Central Bank of Iraq sells more than 220 million dollars in a currency auction
» Deputy: 80% of Iraq's factories have turned into "scrap iron".. 3 reasons behind the disaster - Urge
» PARLIAMENTARY LEGAL INCLUSION OF LECTURERS AND ADMINISTRATORS TO RESOLUTION 315 WITHIN THE 2022 BUDG
» Iraq Promises Iran To Pay Gas Debts Soon, And Tehran Offers Its Services To Solve The Problem Of Des
» The Council of Ministers holds its session headed by Al-Kazemi
» The Finance Committee sends an invitation to members of the House of Representatives regarding the p
» Parliamentary law sets the date for voting on the law criminalizing normalization with the Zionist e
» KTFA Members "News and Views" Monday Afternoon 5-23-2022
» Monday Night KTFA CC with Frank26 "Bird of Paradise: 5-23-2022
» Al-Bayati: The Kurdish House Will Join Any Coalition That Guarantees Its Interests... The Breakthrou
» A Deputy Calls For An Emergency Meeting After The “Al-Islah” Massacre.. 3 Big Question Points
» Al-Bolani Talks About “Agreement Week” To Produce A New Political Plan
» Calls To Open The File Of The Al-Halbousi Party’s Wealth: Its Headquarters In Baquba Is Worth One Bi
» Frustration Hits The Trio After 7 Months Of Failing To Achieve His Ambitions
» Al-Halbousi's Competitors Sneak Through The Parliament's Back Door And Signals Of Dismissal Are Eman
» Political Activist: Al-Halbousi Acquired Nineveh's Money And Transferred It To Anbar
» Al-Zobaie: Al-Halbousi's Behavior Will Lead Him To Dismissal Soon
» Deputy: Unemployment Reaches A Critical Point, The Most Dangerous After 2003
» Deputy: Unemployment Reaches A Critical Point, The Most Dangerous After 2003
» Economist: Oil Prices Will Continue To Rise, And Iraq Faces An Opportunity For Urban Development
» Al-Zanki: The Government Has Abandoned Its Role In Curbing Price Hikes
» With the participation of more than 200 companies .. Erbil hosts an international exhibition for bui
» Lebanese banks in Baghdad withdraw voluntarily
» Kurdistan Islamic Union of Maliki: The problems between Baghdad and Erbil require a quick solution
» Ammar al-Hakim informs the King of Jordan of his support for the Basra-Aqaba oil pipeline project
» European official: We have close cooperation with Iraq in the fight against terrorism
» Israel seizes the space orbit of Iraq (document)
» The Security Council of the Region responds to the factions: Any aggression against Kurdistan will h
» Subject to change according to need.. 25 trillion dinars “balance” for food security and the cancell
» Kurdistan Democratic Party: Our position is firm regarding the presidency
» More than 90% of students do not understand what they read.. The World Bank is financing an educatio
» Oil prices fall amid fears of recession and weak consumption
» The Agricultural Bank launches financing for the purchase of housing units within investment complex
» Voluntary qualifiers for Lebanese banks in Baghdad... and an Iraqi commentary (photos)
» The stability of gold prices in the Iraqi markets
» Official statistics: More than 2,280 hotels in Iraq and Erbil are the first to have "five-star" hote
» Ports of Iraq: receive 12 oil tankers at the specialized port of Khor Al Zubair.
» Basra crude rises and records more than 103 dollars
» The Iraqi parliament is discussing the payment of 1.6 billion dollars for Iranian gas