5511 The Mint vs. The Fed
August 27, 2009
The Mint vs. The Fed
By James Wilson

Quote of the Day: The government called three accountants to testify. The defense asked each one, "What is the proper way to calculate income for purposes of the Internal Revenue Code if you are paid in a gold coin that has a $50 face value on it?" All three of them responded, "I do not know; I'll have to research that." -- Mike Zigler, reporting on the 2007 case against Robert Kahre that ended in a hung jury

Subject: How can legal tender be illegal?


First, some background . . .

* The face value of the U.S. Mint's gold and silver coins are legal tender, meaning they must be accepted in payment of debt
* But a Gold Eagle coin that has "$50" printed on it is legal tender only up to $50, while its gold content is worth about $1,000 in Federal Reserve notes

After extensively researching the issue, Kahre . . .

* paid them in gold and silver coins, whose face value - that is, legal tender value - was so low that the workers legally didn't have to report it as income to the IRS


Even though the coins Kahre used were legal tender, the Justice Department alleged that Kahre's system was a fraudulent, tax-evading scam.

We agree with Jacob Hornberger who asserts that the federal government's prosecution of Kahre is self-contradictory . . .



* people would demand payment in the Mint's gold and silver coins and have far fewer reportable "dollars" in income, meaning fewer people would pay income taxes
* the market would soon prefer the coins produced by the Treasury Department's Mint that are regulated by law - not the inflated dollars created by order of the independent Federal Reserve Board


DownsizeDC.org, however, believes Kahre was on to something. That's why we endorse the "Honest Money Act," which would repeal the legal tender law that gives the Federal Reserve a monopoly over the money supply. This bill, along with the "Tax-Free Gold Act" and the "Free Competition in Currency Act," is a plank in our End the Inflation Tax Campaign.

Repealing the legal tender law would foster the creation of HONEST free market money, and protect people from the Federal Reserve's endless onslaught of legalized counterfeiting, which constantly reduces the value of your money.


Use your personal comments to mention the hypocrisy involved in the Kahre case. If the feds are going to make it a crime to FOLLOW the legal tender law, then that's just one more argument for repealing it. You can send your message here.

Thank you for being a DC Downsizer.

James Wilson
Assistant to the President


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