Thaddeus Stevens (April 4, 1792 – August 11, 1868)
America Stevens led the Radical Republican faction in their battle against the bankers over the issuance of money during the Civil War. Stevens made various speeches in Congress in favor of President Lincoln and Henry Carey's "Greenback" system, interest-free currency in the form of fiat government-issued United States notes that would in effect threaten the bankers' profits in being able to issue and control the currency through fractional reserve loans. Stevens warned that a debt-based monetary system controlled by for-profit banks would lead to the eventual bankruptcy of the people, saying "the Government and not the banks should have the benefit from creating the medium of exchange," yet after Lincoln's assassination the Radical Republicans lost this battle, and a National banking monopoly emerged in the years after. Thaddeus Stevens
“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.”
Between 1870 and 1914, when world currencies were pegged to the gold standard (GS), maintaining price stability was a lot easier because the amount of gold available was limited. Consequently, monetary expansion could not occur simply from a political decision to print more money, so inflation was easier to control. The central bank at that time was primarily responsible for maintaining the convertibility of gold into currency; it issued notes based on a country's reserves of gold. (For more insight, read The Gold Standard Revisited.)
What is the Bank’s “Promise to Pay”?
The words "I promise to pay the bearer on demand the sum of five [ten/twenty/fifty] pounds" date from long ago when our notes represented deposits of gold. At that time, a member of the public could exchange one of our banknotes for gold to the same value. http://www.bankofengland.co.uk/bankn...bout/faqs.aspx
According to the Bank of England website 'The concept of legal tender is often misunderstood. Contrary to popular opinion, legal tender is not a means of payment that must be accepted by the parties to a transaction, but rather a legally defined means of payment that should not be refused by a creditor in satisfaction of a debt. The current series of Bank of England notes are legal tender in England and Wales, although not in Scotland or Northern Ireland, where the only currency carrying legal tender status for unlimited amounts is the one and two pound coins.' Anne, Blairninich UK http://www.guardian.co.uk/notesandqu...-19878,00.html
Australian definition of legal tender: http://www.alecomm.com/index.php?opt...issues-general
Are Scottish & Northern Ireland notes "legal tender"?
In short ‘No’ these notes are not "legal tender"; furthermore, Bank of England notes are only legal tender in England and Wales. Legal tender has, however, a very narrow technical meaning in relation to the settlement of debt.
In ordinary everyday transactions, the term "legal tender" in its purest sense need not govern a note's acceptability in transactions. This is because the issuing banks must back their note issue using a combination of Bank of England notes, UK coin and funds in an interest bearing bank account at the Bank of England. More information on these arrangements can be found at http://www.bankofengland.co.uk/bankn...rnireland.aspx
From http://www.bankofengland.co.uk/bankn...t/faqs.aspx#16
What is legal tender?
The coins issued under the authority of Section 6 of The Coinage Act, 1906, shall be legal tender in payment or on account i.e. provided that a coin has not been defaced and has not lost weight so as to be less than such weight as may be prescribed in its case: - [Section 13 of The Coinage Act, 1906].
Similarly, the One Rupee notes issued under the Currency Ordinance, 1940 are also legal tender and included in the expression Rupee coin for all the purposes of the Reserve Bank of India Act, 1934.
Every banknote issued by Reserve Bank of India (Rs.2, Rs.5, Rs.10, Rs.20, Rs.50, Rs.100, Rs.500 and Rs.1000) shall be legal tender at any place in India in payment or on account for the amount expressed therein, and shall be guaranteed by the Central Government, subject to provisions of sub-section (2) Section 26 of RBI Act, 1934. The Paper Currency Act of 1861 conferred upon Government of India the monopoly of Note Issue bringing to end banknote issues of Private and Presidency Banks. Government of India continued to issue currency notes till the Reserve Bank of India (RBI) was established on 1st April, 1935.
What is the meaning of "I promise to pay" clause?
As per Section 26 of Reserve Bank of India Act, 1934, the Bank is liable to pay the value of banknote. This is payable on demand by RBI, being the issuer. The Bank's obligation to pay the value of banknote does not arise out of a contract but out of statutory provisions.
The promissory clause printed on the banknotes i.e., "I promise to pay the bearer an amount of X" is a statement which means that the banknote is a legal tender for X amount. The obligation on the part of the Bank is to exchange a banknote for coins of an equivalent amount. http://www.rbi.org.in/scripts/FAQView.aspx?Id=39#11
You will find a Promissory Clause in all the banknotes. What exactly is this? This means that as per Section 26 of Reserve Bank of India Act, 1934, the Bank is liable to pay you the value of a banknote. This is payable to you on demand by RBI, being the issuer. The Bank's obligation to pay the value of banknote to you does not arise out of a contract but out of statutory provisions.
The promissory clause printed on the banknotes i.e., "I promise to pay the bearer an amount of X" is a statement which means that your banknote is a legal tender for X amount. The obligation on the part of the Bank is to exchange your banknote for coins of an equivalent amount.
Italy Centesimi http://www.ebay.com/ctg/Italy-10-Cen...866-/102020413
The Currency Act. The colonies suffered a constant shortage of currency with which to conduct trade. There were no gold or silver mines and currency could only be obtained through trade as regulated by Great Britain. Many of the colonies felt no alternative to printing their own paper money in the form of Bills of Credit. The notes were issued by land banks, or loan offices, which based the value of mortgaged land.
There was no standard value common to all of the colonies. British merchant-creditors were very uncomfortable with this system, not only because of the obvious complexity, but because of the rapid depreciation of the notes due to regular fluctuations in the colonial economy.
On September 1, 1764, Parliament passed the Currency Act, effectively assuming control of the colonial currency system. The act prohibited the issue of any new bills and the reissue of existing currency. Another provision of the Currency Act established what amounted to a "superior" Vice-admiralty court, at the call of Navel [sic] commanders. http://www.ushistory.org/declaration...urrencyact.htm
The South African Reserve Bank Act Number 90 of 1989 governs the management of currency by the South African Reserve Bank. Currency management includes the following functions:
Issue of banknotes and coin Availability of banknotes and coin. The Government has given the South African Reserve Bank the sole right to issue banknotes and coin in the country. However, all new designs of banknotes and coin must have the prior approval of the Government before it is placed into circulation. The Government also decides on the denominations that should be introduced or removed from circulation based on recommendations received from the Bank.
The Bank must ensure that sufficient new banknotes and coin are available to replace banknotes, which are removed from circulation due to soil levels. New banknotes are automatically issued by the South African Reserve Bank's branches. Orders for new coin are placed with the Bank’s Head Office by the national specie committee, which is appointed by the commercial banks.
The value of banknotes and coin in circulation can be obtained from the Bank’s statement of assets. The Bank has assumed liability in terms of section 15(3) (c) of the Currency and Banking Act 31 of 1920, for the legal tender of payment of an amount equal to the amount specified on the banknote.
In 1961, South Africa changed its currency from pound sterling to Rand and cents, and when in the same year the country became a republic, the new currency was retained.
The South African Reserve Bank thereafter commenced withdrawing the old Pound Sterling currency banknotes, replacing them with banknotes of the new currency.
http://www.resbank.co.za/Banknotesan...ment-Home.aspx
The South African Reserve Bank is the reserve bank of the Republic of South Africa. Its functions include the formulating and implementing of South Africa's monetary policy, ensuring the efficiency of South Africa's financial system and educating South Africa's citizens about the monetary and economic situation of the country. Unlike the reserve banks of most commonwealth nations, the South African Reserve Bank has always been privately owned. http://www.investopedia.com/terms/s/...serve-bank.asp
Putting It All Together http://www.investopedia.com/articles...ntralbanks.asp
