Re: e$

[jdd@aiki.demon.co.uk (Jim Dixon)]

In message <9408091725.AA22702@ah.com> Eric Hughes writes:
>    If A writes a check to 'cash', pays B with it, and B passes it on to
>    C, and so forth, are you saying that this is or will one day be illegal?
> 
> An individual note and its transfers are unlikely to be made illegal.
> But that's not the whole story.  A company engaged in the business of
> issuing such notes and not recording (perhaps, a fortiori, by not
> being able to record) the transactions among people for these
> instruments, however, could be ruled to be performing a separate
> activity which could then be made illegal.

Yes.  But my initial point was that a check for $1.00 does not constitute
an alternative currency and you do not seem to be disagreeing with this.
'Therefore' if e$1.00 is essentially a promise to pay one US dollar, and
if that $1.00 is on deposit with a bank somewhere, and if that bank will
pay out US$1.00 when the e$ "check" is presented, the Feds will not be
able to prosecute anyone for using an illegal currency.

> Just because a single act is legal doesn't mean that a bunch of the
> same acts are.  For example, not reporting a $5000 cash transfer is
> legal, but not reporting half a dozen of them made to the same person
> in the same day almost certainly is.

Yes.  But you must remember my original point.	I think that whether
the $5000 is transferred as greenbacks or as $e is irrelevant, if the
creation of $e is handled correctly.

I think that if you look back through the recent postings on $e, you
will find that in many cases a discussion which seemed to be about $e
is actually about something else.  You could substitute US$ for $e
without changing the substance of the postings.

>				   A company engaged in the business of
> issuing such notes and not recording (perhaps, a fortiori, by not
> being able to record) the transactions among people for these
> instruments, however, could be ruled to be performing a separate
> activity which could then be made illegal.

Every bank in the United States that allows checks to be made out to
cash already does this.

A second point, relating to this paragraph: obviously, a foreign bank
cannot be constrained in the same way to report financial transactions
to US authorities.  We have all heard of Swiss bank accounts.

So I think that if a company issued $e "checks" denominated in US $
and if a foreign bank were willing to pay against the checks upon
demand, then (a) the $e checks would not violate the Constitutional
provisions against alternative currencies and (b) neither the foreign
bank nor the foreign company issuing the checks would have to make
any reports to US authorities.

Our company is a UK company.  We can easily open a US$ account at the
bank down the street.  We could then write US$ checks made out to cash.
Our bank would not object, any more than they already object to the
sterling checks that we occasionally make out to cash.	If the US
government tried to force either us or our bank to file reports with
them, we would simply laugh at the requirements.
--
Jim Dixon