M.Dancer Posted August 7, 2007 Report Share Posted August 7, 2007 You stated: “The promise is of course made by the Bank of Canada, and the promise is that it is legal tender. They don't promise what they can't, only that it will be honoured”.The Bank of Canada does not promise that legal tender will be honoured. So you think that the Bank of Canada would not honour their notes? IS your hat 3 or 4 sided? Quote Link to comment Share on other sites More sharing options...
dpwozney Posted August 8, 2007 Report Share Posted August 8, 2007 No I'm not saying it is a good or service. I already said it is a promisary note whose value is determined by the markets. If you (the buyer) and another (the seller) agree that one dollar is worth 2 minutes of electrical work, then that's the value. If the currency traders agree that the dollar is worth .96 US cents, then that's the value.The promise is of course made by the Bank of Canada, and the promise is that it is legal tender. They don't promise what they can't, only that it will be honoured. For instance, you could say that if I work for 10 hours on your home, you will give me a promisary note equal to my labour. If I agree, that's fine. But chances are I can't take your note across the county and find a grocery store that will accept it as tender. If you pay me in legal tender, it will be accepted everywhere canadian notes are taken and the value will be consistant. In other words $10 in a bank in BC will not be called $5.00 in Nova Scotia...... According to the Bills of Exchange Act, "A promissory note is an unconditional promise in writing made by one person to another person, signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money to, or to the order of, a specified person or to bearer". In 1969, the phrase "will pay to the bearer on demand" was replaced by the statement "this note is legal tender" on new Bank of Canada notes. Bank of Canada notes issued after 1968 are not promissory notes. Quote Link to comment Share on other sites More sharing options...
August1991 Posted August 13, 2007 Author Report Share Posted August 13, 2007 The Bank of Canada does not promise that legal tender will be honoured.The federal government is obliged to accept the notes as payment for taxes. Quote Link to comment Share on other sites More sharing options...
Riverwind Posted August 13, 2007 Report Share Posted August 13, 2007 (edited) The federal government is obliged to accept the notes as payment for taxes.I don't think the CRA is set up to accept cash and you would run into a lot of problems if you tried. If you persisted they might eventually accept your payment but you would have to make an issue of it.The concept of 'legal tender' no longer has the same meaning it did in the past. In the past it was a guarantee in case people were concerned about whether they would be able to spend the notes if they accepted them. No one worries about this today but shopkeepers do worry about counterfeit bills. For that reason, shop keepers are allowed to reject paper cash if they accept electronic cash. IOW - the law requires merchants to accept legal tender but does not require that they accept all forms of legal tender. I would also assume that banks are obligated to accept all forms of cash but they are in a better position to check for counterfeits. Edited August 13, 2007 by Riverwind Quote Link to comment Share on other sites More sharing options...
August1991 Posted August 13, 2007 Author Report Share Posted August 13, 2007 I don't think the CRA is set up to accept cash and you would run into a lot of problems if you tried. If you persisted they might eventually accept your payment but you would have to make an issue of it.The CRA accepts payments free of charge through private banks (link). My point was that the CRA must accept Canadian dollars as payment - it could hardly refuse them. IOW, the limiting value of a currency is to pay debts to the issuing government. Quote Link to comment Share on other sites More sharing options...
Riverwind Posted August 13, 2007 Report Share Posted August 13, 2007 (edited) The CRA accepts payments free of charge through private banks (link). My point was that the CRA must accept Canadian dollars as payment - it could hardly refuse them. IOW, the limiting value of a currency is to pay debts to the issuing government.In that case it is the bank that must accept the notes. I don't see any difference between the CRA and a merchant who says they won't accept cash but tells customers to go to a bank and deposit funds directly into their bank account.My point is legal tender includes electronic cash today and any merchant who accepts electronic cash accepts legal tender - just not all forms of legal tender. Edited August 13, 2007 by Riverwind Quote Link to comment Share on other sites More sharing options...
dpwozney Posted August 13, 2007 Report Share Posted August 13, 2007 (edited) My point is legal tender includes electronic cash today ... The term “electronic cash” is not mentioned in Section 8 of the Currency Act which discusses legal tender in Canada. Subsection 1 of Section 8 states: “8. (1) Subject to this section, a tender of payment of money is a legal tender if it is made (a) in coins that are current under section 7; and (b ) in notes issued by the Bank of Canada pursuant to the Bank of Canada Act intended for circulation in Canada.” Edited August 13, 2007 by dpwozney Quote Link to comment Share on other sites More sharing options...
Riverwind Posted August 13, 2007 Report Share Posted August 13, 2007 8. (1) Subject to this section, a tender of payment of money is a legal tender if it is madeElectronic cash is always backed up with real currency sitting in the banks vaults. Even if you pay by credit card the credit card company is obligated to provide currency to the merchant. So electronic payments are equivalent to cash and a merchant that accepts electronic payments does accept a from 'legal tender'. I believe that is sufficient to meet the spirit of the law even if lawyers disagree with the letter of the law. The BOC has clearly indicated that it has no problem with the status quo. What is your point anyways? Quote Link to comment Share on other sites More sharing options...
dpwozney Posted August 13, 2007 Report Share Posted August 13, 2007 Electronic cash is always backed up with real currency sitting in the banks vaults. Can you prove this? What all can this “real currency” include and consist of? Even if you pay by credit card the credit card company is obligated to provide currency to the merchant. What is your definition of “currency”? So electronic payments are equivalent to cash and a merchant that accepts electronic payments does accept a from 'legal tender'. According to this Bank of Canada web page, “In Canada, legal tender consists of coins issued by the Royal Canadian Mint and bank notes issued by the Bank of Canada”. Quote Link to comment Share on other sites More sharing options...
Riverwind Posted August 13, 2007 Report Share Posted August 13, 2007 (edited) “In Canada, legal tender consists of coins issued by the Royal Canadian Mint and bank notes issued by the Bank of Canada”.If I give you a check then that means you can go to a bank and get bank notes issued by the BOC. The cheque is immediately convertable to bank notes which means it is equivalent to legal tender. The definitions you posted do not exlude the possibility of using legal tender equivalents in transations (they don't say that they are specifically included either). IOW the law appears to be abiguious on this point which means accepting electronic cash could be the same as accepting legal tender as far as the law is concerned. The fact that the BOC states quite explicitly says that merchants do not have to accept bank notes tells me that my interpretation of the law is probably close even if it is not exactly correct. Edited August 13, 2007 by Riverwind Quote Link to comment Share on other sites More sharing options...
dpwozney Posted August 13, 2007 Report Share Posted August 13, 2007 My point was that the CRA must accept Canadian dollars as payment - it could hardly refuse them. What is your definition of the value of the Canadian dollar? What is the physical substance, the physical material, of the Canadian dollar? What is the physical manifestation of the Canadian dollar in the material universe? Has any government in or of Canada ever defined the value of the Canadian dollar? Quote Link to comment Share on other sites More sharing options...
M.Dancer Posted August 13, 2007 Report Share Posted August 13, 2007 (edited) What is your definition of the value of the Canadian dollar?What is the physical substance, the physical material, of the Canadian dollar? What is the physical manifestation of the Canadian dollar in the material universe? Has any government in or of Canada ever defined the value of the Canadian dollar? Why do you ask the same ridiculous questions over and over. Are you waiting to find someone stupid enough to come up with an answer you like? The value of the Canadian dollar is what ever the buyer and seller agree it is. Economic 101. End of Story. Edited August 13, 2007 by M.Dancer Quote Link to comment Share on other sites More sharing options...
M.Dancer Posted August 13, 2007 Report Share Posted August 13, 2007 What is your definition of the value of the Canadian dollar? Mine and everyone else's definition of the canadian dollar is, it is the official currency of Canada. Quote Link to comment Share on other sites More sharing options...
dpwozney Posted August 13, 2007 Report Share Posted August 13, 2007 Why do you ask the same ridiculous questions over and over. Are you waiting to find someone stupid enough to come up with an answer you like?The value of the Canadian dollar is what ever the buyer and seller agree it is. Economic 101. End of Story. Mine and everyone else's definition of the canadian dollar is, it is the official currency of Canada. Your replies still do not answer my questions. What is the physical substance, the physical material, of one Canadian dollar? What is the physical manifestation of one Canadian dollar in the material universe? Physically and quantitatively, what exactly is one Canadian dollar? Quote Link to comment Share on other sites More sharing options...
M.Dancer Posted August 13, 2007 Report Share Posted August 13, 2007 Physically and quantitatively, what exactly is one Canadian dollar? One Canadian dollar is what ever the buyer and seller agree it is. Definitively it is a unit of Canadian Currency. If you can wrap your head around this, try electroshock therapy. If you think you have better naswers that don't require mushrooms or tinfoil....have at it. Quote Link to comment Share on other sites More sharing options...
dpwozney Posted August 18, 2007 Report Share Posted August 18, 2007 (edited) One Canadian dollar is what ever the buyer and seller agree it is. Definitively it is a unit of Canadian Currency. When I buy something, I do not come to any agreement as to exactly what one Canadian dollar is, physically and quantitatively. Edited August 18, 2007 by dpwozney Quote Link to comment Share on other sites More sharing options...
Drea Posted August 18, 2007 Report Share Posted August 18, 2007 The Banking system does not consist of real money. It is all promisory notes. The first "banking" was started by the "Kights Templar". Christian piligrims would get robbed on their way to the holy land so the Knights took their gold and gave them a "note" with the promise that when they got to their destination they could give the note to another Templar and get their gold back. So those notes (back then) were backed by the promise of real gold. Today we no longer use the gold standard. Currency is no longer backed by real gold. It's all basically virtual. There are no vaults holding all the "promises" and nothing with actual "worth" (ie; gold or silver) is sitting there waiting for you to "cash in" your promisory note. I think this is what dpwozney is trying to say. Our money today is not real. The Canadian dollar (and all other currencies) is virtual. Currency is made of only a promise and has no "real" value (like in the old days when a goldminer could plop his bag of nuggets on the counter and get a beer). Quote Link to comment Share on other sites More sharing options...
Riverwind Posted August 18, 2007 Report Share Posted August 18, 2007 I think this is what dpwozney is trying to say. Our money today is not real. The Canadian dollar (and all other currencies) is virtual. Currency is made of only a promise and has no "real" value (like in the old days when a goldminer could plop his bag of nuggets on the counter and get a beer).The value of gold is a fantasy supported by faith as well. The gold miner could use his nuggets to purchase beer because the bar tender *believed* he could use those nuggets to purchase something else. Without that faith gold would be worthless since gold itself has little intrinsic value other than the fact that it makes pretty jewelry and conducts electricity well. Quote Link to comment Share on other sites More sharing options...
Drea Posted August 18, 2007 Report Share Posted August 18, 2007 It's all barter really. When you boil it all down. We barter virtual money for goods. Used to be people bartered a bag of gold for goods. Before that people traded chickens, fur, etc for goods. Gold has "real" value, unlike a promisory note one can melt down their gold earrings... One cannot melt down promisory notes. Quote Link to comment Share on other sites More sharing options...
dpwozney Posted August 18, 2007 Report Share Posted August 18, 2007 The Banking system does not consist of real money. It is all promisory notes. ... Currency is made of only a promise ... According to the Bills of Exchange Act, “A promissory note is an unconditional promise in writing made by one person to another person, signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money to, or to the order of, a specified person or to bearer”. In 1969, the phrase “will pay to the bearer on demand” was replaced by the statement “this note is legal tender” on new Bank of Canada notes. Bank of Canada notes issued after 1968 are not promissory notes. Quote Link to comment Share on other sites More sharing options...
Riverwind Posted August 18, 2007 Report Share Posted August 18, 2007 It's all barter really. When you boil it all down. We barter virtual money for goods.Exactly.Gold has "real" value, unlike a promisory note one can melt down their gold earrings... One cannot melt down promisory notes.Gold cannot be created from nothing, however, that is a blessing and a curse. In the last week the central banks have been printing money like crazy to prevent a global economic meltdown caused by a 'liquidity crisis'. This intervention has likely reduced the severity of the economic slowdown that will follow. We would likely be facing another great depression if all currency was 100% backed by gold or similar 'real' commodities. Quote Link to comment Share on other sites More sharing options...
Drea Posted August 18, 2007 Report Share Posted August 18, 2007 (edited) According to the Bills of Exchange Act, “A promissory note is an unconditional promise in writing made by one person to another person, signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money to, or to the order of, a specified person or to bearer”.In 1969, the phrase “will pay to the bearer on demand” was replaced by the statement “this note is legal tender” on new Bank of Canada notes. Bank of Canada notes issued after 1968 are not promissory notes. It is still a promise... "This note is legal tender" just means that other notes are NOT legal tender. ONLY that specific note can be legally used. I go to the store and give the clerk a $5 bill. In exchange he gives me a bag of chips and a pop. He then puts the $5 note in his till and at the end of the day puts it in the bank. He can either keep the note, put it in the bank, or use it to barter for more goods. Really money just makes our barter system more consistent and convenient. Instead of 2 chickens for a loaf of bread, I give you one toonie and you give me the bread. It's hard to pack around all those chickens! LOL Edited August 18, 2007 by Drea Quote Link to comment Share on other sites More sharing options...
dpwozney Posted August 18, 2007 Report Share Posted August 18, 2007 It is still a promise... "This note is legal tender" just means that other notes are NOT legal tender. ONLY that specific note can be legally used. This Bank of Canada web page provides the following answer for the question “What is ‘legal tender’?”: “A ‘tender’ is an offer of payment of a debt. In Canada, legal tender consists of coins issued by the Royal Canadian Mint and bank notes issued by the Bank of Canada. This does not mean that a merchant is obliged to accept bank notes. The method of payment can be whatever is mutually acceptable to both parties - cash, credit card, cheque, etc. Thus, a merchant may refuse to accept bank notes in payment for goods or services, without contravening the law.” Quote Link to comment Share on other sites More sharing options...
Drea Posted August 18, 2007 Report Share Posted August 18, 2007 What I mean was that people can't just make up a note. It must be specifically endorsed by (in this case) the Bank of Canada. I suppose a merchant could refuse cash...(from the link, it seems they can legally refuse it) but they would lose that sale so I don't think it's a real issue that people deal with day to day. Have you ever had anyone refuse your cash? I have had merchants refuse my Visa and my debit card but never cold hard cash Quote Link to comment Share on other sites More sharing options...
dpwozney Posted August 18, 2007 Report Share Posted August 18, 2007 What I mean was that people can't just make up a note. It must be specifically endorsed by (in this case) the Bank of Canada. Subsection 1 of Section 13 of the Currency Act states: “13. (1) Every contract, sale, payment, bill, note, instrument and security for money and every transaction, dealing, matter and thing relating to money or involving the payment of or the liability to pay money shall be made, executed, entered into, done or carried out in the currency of Canada, unless it is made, executed, entered into, done or carried out in (a) the currency of a country other than Canada; or (b ) a unit of account that is defined in terms of the currencies of two or more countries.” Quote Link to comment Share on other sites More sharing options...
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