What Is U.S. Legal Tender?

Above, a 1945 Walking Liberty half dollar. Photo by Armand Vaquer.

With more states (about ten of them) passing laws allowing gold and silver to be used as legal tender, the question arises, "What exactly is legal tender?"

Numismatic News has posted an article on the history of U.S. legal tender that starts from the days of the founding of the country to present time.

It begins with:

The issue of what is legal tender in the U.S. has confronted America right from 1776 to today. Over the centuries, what was considered legal tender in the U.S. has changed.

In order to look at this history, it is necessary to define what is meant by legal tender. Most definitions refer to a form of money recognized by laws or courts as a means to settle public or private debt.

When the U.S. declared independence in 1776, there did not exist any circulating U.S. coins. The Continental Congress and the various colonies/states issued their own scrip, many of which referred to their redeemability for “Spanish milled dollars or the value thereof in gold or silver.”

When the U.S. Constitution was adopted in 1789, there were still not yet any circulating U.S. coins. But a significant provision in Article One, Section 10 reads, “No state shall ... make any Thing but gold and silver Coin a Tender in Payment of Debts.”

To read more, go here.