The United States Penal Code provides:
Obviously it would be stupid to give 100,000 dimes to a bank as collateral for a $10,000 loan, but as far as I know the law seldom prohibits stupidity. So what gives here?
Is it possibly because coins were at one time made of valuable metals? In you example, that would have been some large number of pounds of silver as collateral on a loan instead of 100,000 dimes. Gold coins would have been even better.
Sorry, just guessing here and hoping to toss out something that might help you further in your search.
My read of this is not just any coin but those designated by specific publication. Has there ever been such a designation?
This was enacted July 23, 1965. I suspect this (and other recollections of the era) may have something to do with it, but I really can’t figure it out myself. Perhaps this is just a red herring.
It appears that the crime is some sort of speculation, similar to selling short in the stock market. Doing so with federal specie would likely be a crime. I admit, though,that I reached way up my ass for that one.
Sounds to me like a circulation issue and bored lawmakers.
This site might shed some light on it. The law of 1965 appears to have been a restatement of an earlier law of 1933, when the United States when off of the gold standard and Americans were effectively forbidden to transact business based on specie. Pledging specie (or specie-based coins) as security would be a disguised way of doing so–I think.
I’m pretty sure that 1965 was when the US went off the silver standard. That may tie in with what others have written above regarding “selling short” etc etc
Did anyone come up with an answer? I thought this was an interesting question.
I look at this page on the web:
I think that the term “coins” are in reference to the a part of the entire chapter 17 about illegal or criminal use of items (i.e. notes, checks, 337 specifcally states coins as an almost afterthought.) I think it sounds like somebody found a loophole and it was exploited in 1965. This just looks like another way to stop illegal issuance of monatery value and insure that it is accomplished in a form recognizable by the federal government.
Lemme know what you think! :dubious:
Well, Bill H., if you care enough to resurrect this thread, then by God, I care enough to research the origin of this goofball law in the Congressional Record. (Hey, it’s the next best thing to having a life.) Keeve and Mort Furd were closest to the right answer–it was all about silver.
The issue in 1965, you will recall, was that the market value of the silver content of American coins was approaching the face value of the coins. This was mega-uncool. As the two values converged, people began hoarding bags full of coins (silver dollars especially) against the day when they could be sold for their silver content at greater than their face value. This took coins out of circulation, forcing the Treasury to buy more silver so that it could mint more coins–which put further upward pressure on the price of silver, and so on in a circle.
The immediate problem was solved by substituting a cheaper alloy for silver. (Technically this wasn’t going off of a silver standard, but rather reducing the actual silver content of the coins.) But the old coins remained in circulation and vulnerable to hoarding.
What to do? Congress couldn’t very well pass a law against holding a sack full of genuine coin of the realm. But as Rep. Arnold Olsen (D-MT) pointed out,
Olsen’s logic carried the House on a voice vote, was rejected by the Senate but survived in conference, and was incorporated into the Coinage Act of 1965 and signed into law by President Johnson on July 23 of that year.
I have not attempted to find out whether the Secretary of the Treasury ever made the requisite proclamation of proscribed coins, or whether any such proscription is still in effect. I have to draw the line somewhere.