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Man Thwarted in Effort to Pay School Taxes in Gold Coins

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I love this little case. A Texas man, Brent E. Crummey, sought to pay his school district taxes with $50 U.S. American Eagle gold bullion coins, and apparently have the district accept the higher value of the coins in the open gold market than their face value as legal tender. The school district said no, so the man sued.

A three-judge panel of the U.S. Court of Appeals for the 5th Circuit, in New Orleans, ruled against the man on Oct. 2, holding that "as legal tender, a dollar is a dollar."

"The legal monetary value of Crummey’s fifty dollar American Gold Eagle coin is equivalent to that of a fifty dollar Federal Reserve Note," the court said in Crummey v. Klein Independent School District .

Incidentally, according to Monex Precious Metals, an ounce of gold was trading for around $829 on Friday. Crummey's $50 Gold Eagles are one-ounce coins. But, of course, the school district wasn't going to reap the difference, since Crummey was seeking to have each coin settle $829 (or whatever the market value was at the time) of his tax bill.

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We appreciate your interest in the case; however, as one who professes to cover news and analysis of legal developments, you must know the fallicy of taking a ruling out of context from the underlying facts of the case as well as the history and law concerning money in this nation. Since the case is still ongoing, we will refrain from delving into anything other than the misapplication of law concerning the United States monetary system.

Congress and the Supreme Court recognize that fifty gold dollars are not equal in value to fifty Federal Reserve Note (FRN) dollars. The United States monetary system consists of different kinds of money, or mediums of exchange. Each of these has a different value, or purchasing power. The Supreme Court, in U.S. v. Banker's Trust Co., 294 U.S. 240 (1935), explained that Congress's "authority to impose requirements of uniformity and parity is an essential feature of this control of the currency." At this point, any reasonable person can see that one must understand what uniformity and parity mean before they can move on to the issue of determining the value of money.

Merriam-Websters Online defines uniformity as the quality or state of being uniform. And uniform as having always the same form, manner, or degree.

Uniformity, in this instance, means that each kind of money are on an equal basis as legal tender. Being legal tender, the kinds of money will have denominations expressed in dollars, or the money unit of account for the United States. Therefore, legal tender is simply a measure, stated in dollars, describing the nominal sum of a kind of money that sets the standard for payment of an obligation or goods/services.

Merriam-Websters online defines parity as equality of purchasing power established by law between different kinds of money at a given ratio.

It is the purchasing power of money which gives it value - not some legislative decree (which Congress has never pretended nor alleged to have done). Purchasing power determines how much of a specific kind of money, or medium of exchange, is required to pay an obligation or purchase goods/or services.

Of course, let us step back for a second and consider the allegations put forth by the 5th Circuit - the value of fifty gold dollars is the same as fifty FRNs. Why then, is Congress required to maintain all coins and currency in uniformity and parity? Why would there be any necessity if they are all equal to another?
Also, why didn't the Supreme Court simply proclaim both are equal in Perry v. United States, 294 U.S. 330 (1935)? Let's look at what the Court did say in Perry - "determination of the value of gold coin would necessarily have regard to its use as legal tender and as a medium of exchange under a single monetary system with an established parity of all coins and currency...the question of value...would require a consideration of the purchasing power of the dollars."
Again, why did they state the above instead of just saying "a dollar is a dollar"?

Before the United States Monetary Commission in 1877, economist Henri Cernuschi testified about monetary theory and the value of money (gold and silver). He testified,"The true reason why gold and silver are good money is not because they are, as it is said, precious metals, but because the issue of that money is not in the hands of a government...It is independent of human agency; and it is for that reason that gold and silver are adopted by more than one country as money." In discussing the value of money, he stated "the cost of production goes for nothing in the value of money...The value of money depends upon its quantity."
The Commission asked:
Q: Then, since government does not regulate the quantity, and since the value depends upon quantity, how can the government be said to regulate the value of the precious metals?
A: I answer, that the legislator chooses, or "elects", as Justinian says, the material which will be money. The material thus elected can be gold or can be silver, or can be both; but when the choice is made, the issue is not in the hand of the government...There is the warrantee of the value of the metallic money, that nobody has the control of the quantity. But when the quantity is limited, as is the case in fractional currency, it happens necessarily that there is a diversity of value between the coined metal and the metal uncoined. A good and sound money is that money the coinage of which is unlimited, unrestrained; so that the value of bullion and the value of coin are always the same. It is not the stamp on the coin which creates the monetary value; that which created the value is the legal right of every one having all his metal stamped and coined in conformity with the law....
Q: Do I understand you correctly as saying that, in your opinion the value (by which I mean the purchasing power) which government affixes to the precious metals is modified by their quantity as produced by Nature?
A: The government gives no value to the money. The government adopts a monetary unity- for instance- a dollar, weighing a certain number of grains in silver or gold. When we use the term "dollar", we mean to say a certain quantity of metal which is received by the citizen in the one hand and given out by the other hand; but the government does not interfere in determining the purchasing-power or the value of the dollar.
Q: Do you make a difference between "value" and "purchasing-power", as you use the term?
A: I do not make any differences. The purchasing power signifies the value of money.

It is clear the value of money is its purchasing power - not the denomination stamped on its face. The purchasing power is derived from the parity in which specific kinds of money are kept in relation to the standard unit of value - the coin of silver established as the dollar in the Coinage Act of 1792. Therefore, the purchasing power of the FRN is determined by the amount set by the U.S. Mint to purchase the dollar coin, which is the one ounce American Eagle silver coin.

Until the United States was moved off the gold standard in 1976, Title 31 Sec. 314 read "the dollar consisting of 25 8/10 grains of gold, nine-tenths fine and/or 371.25 grains of .999 fine silver as established shall be the standard unit of value, and all forms of money issued or coined by the United States shall be maintained at a parity of the value with this standard, and it shall be the duty of the Secretary of the Treasury to maintain such parity."
This section derived its authority from the Gold Standard Act of 1900. Although the US Code does not currently print this section, the dollar has not been changed nor has the requirement for all United States coin or currency to be maintained at parity with the silver dollar.

It is clear that any reasonable person can see the 5th Circuit ruling does not conform with the history and law as shown above. Contrary to what most judges and lawyers allege, a ruling by a court is not the law nor is it even held to be the truth. there are remedies available to address the misapplication of law, which we intend to utilize.

Thank you,


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