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LadyEllen -> RE: start your own copmeting curency (11/29/2008 6:51:38 AM)
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quote:
ORIGINAL: celticlord2112
quote:
starting a competing currency is illegal.
Is it?
51 USC §5103 defines United States coins and currency as legal tender--and by law no other currency can be legal tender.
However, the significance of legal tender is this: in general, a debtor offering legal tender to a creditor in discharge of the debt has made a valid method of payment, and in general, the creditor cannot then sue for non-payment if he rejects the offer of legal tender, unless the contract between debtor and creditor specifies another means of payment.
Case in point: My apartment lease specifies that payment must be made in either check or money order, or by credit card--cash will not be accepted.
Now, if people agreed, in their contracts, to require and accept payment via some other instrument (e.g., "Liberty Dollars")--is that a violation of the law? Is that mode of "competing currency" illegal?
(Still researching the question, but so far I am unable to establish what violation of law ensues from such a practice)
Our law of contract says that "consideration" must be given - whilst one party usually agrees a sum in money as consideration, it isnt a requirement that he do so.
And of course, even where a sum in money is the consideration, that need not be in Sterling; my company transacts a third of its business with Euros as the consideration.
Its something I've been thinking about from time to time; if the banks wont provide funds whereby we in the European freight industry can trade, and given that we as an industry are something of a closed shop in terms of everyone trading with one another, there must be a way we can adopt some new expression of consideration for our contracts whereby we can get goods moved without needing currencies at all.
The problem this runs into though is that ultimately we need money to pay for diesel, road tolls, ferry crossings, wages et al. Unless the whole economy accepts our new expression of consideration, it goes nowhere - and thats before we get to the problem of what backs that expression, where, how and when can it be realised etc.
But in a way we already have - by way of the credit terms commonly applied in our sector - a system from which to go in all this. Right now for instance I have monies owing to me from companies A, B and C - and owe money to companies D, E and F. If we could all agree to do so, I could assign the debts to me of A, B, C to D, E, F. I dont receive anything (or perhaps a small net amount), but my creditors are paid and my balance sheet isnt down. In turn, D, E, F could assign the debts of A, B, C to their creditors G, H and I - and so on.
Bills of exchange and promissory notes. As long as everyone in the scheme is sufficiently stable, it could just work out.
E
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