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News Link • Gold and Silver

Legal Tender Gold: Face Value or Intrinsic Value?

• lewrockwell.com/Kevin Brekke

A popular topic on forums sympathetic to personal ownership of gold bullion is the debate surrounding how to value certain gold coins. After all, in 1985 congress passed the Gold Bullion Coin Act that required the US government to mint and place in circulation gold coins. The coins were to be struck from 91.67% pure gold (22 karat) and minted in denominations of $5, $10, $25 and $50. The act was passed pursuant to Article I, Section 8, Clause 5 of the United States Constitution giving Congress the exclusive power to coin money and set its value.

The act allowed American's to escape a currency system then monopolized by Federal Reserve notes. The act also spurred much conjecture about how, exactly, should the value of legal tender US gold coins be determined when the coins are used as a means of exchange.

More specifically, if wages are paid in legal tender US gold coins, how should the employer calculate and report the wages paid: using the face value of the gold coins, or, the intrinsic value of the gold coins?

That question was settled several years ago in a high-profile court case. Let's briefly review the sequence of events that handed the IRS one of its most coveted legal victories.

In May 2003, the offices of Robert Kahre were raided by armed government agents. Robert Kahre and two dozen of his employees were handcuffed and charged, among other alleged offenses, with tax fraud.

 

2 Comments in Response to

Comment by Doug Spooner
Entered on:

Pay me is pre-1964 silver coins and I'll be more than thrilled to work for a dollar an hour. That translates to about $23... I can handle that.

Comment by Alexander Victorio
Entered on:

 I remember reading once that at one time an ounce of silver was the equivalent of the averages persons days work. Think about it.


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