# Is it illegal to make/use your OWN Currency? **URL:** \ **Category:** Factual Questions\ **Created:** [April 29, 2005, 4:50pm UTC](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734 "2005-04-29T16:50:28Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Raguleader](https://avatars.discourse-cdn.com/v4/letter/r/258eb7/32.png) [@Raguleader](https://boards.straightdope.com/u/Raguleader)\ **Post date:** [May 1, 2005, 3:10am UTC](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734/21 "2005-05-01T03:10:54Z")
Most major universities that I’ve visited had their own form of currency (Texas A&M has AggieBucks, Baylor has BearBucks, etc.) that is used by a number of local businesses. Downside to this is that it’s never accepted at major retail places, upside is that almost all the local resteraunts take them, as do most of the soda machines on campus. ---
**Author:** ![clairobscur](https://avatars.discourse-cdn.com/v4/letter/c/839c29/32.png) [@clairobscur](https://boards.straightdope.com/u/clairobscur)\ **Post date:** [May 1, 2005, 3:36am UTC](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734/22 "2005-05-01T03:36:48Z")
> [@Raguleader](#): > > Also of note are [Liberty Dollars](http://www.libertydollar.org/html/articles/nelson.htm) which are backed by gold and silver and issued by some activist group calling themselves the National Organization for the Repeal of the Federal Reserve Act and the Internal Revenue Code (NORFED). > > It seems to be worth mentioning that they mis-spell “Protest” but I’m willing to give them the benefit of the doubt and assume their organization as a whole is run better than their spell-checker. Their money looks neat, in any case. How does this work, exactly? s your cerficate based on a given amount of precious metal, in which case, its value in dollars will fluctuate with the value of gold/silver, or is a liberty dolar = 1 US dollar, in which case, they will issue more “liberty dollar” if gold/silver raise in value, and withdraw part of them if they lose value? I assume the first, since the second would be nonsentical (your liberty dollar would be exactly the same thing as a US dollar, with the same supposed risks, except for the part about other people not accepting it), but in this case what difference between issuing/using these bills and issuing/using plain gold or silver coins??? I both cases, I don’t really see the point… ---
**Author:** ![Raguleader](https://avatars.discourse-cdn.com/v4/letter/r/258eb7/32.png) [@Raguleader](https://boards.straightdope.com/u/Raguleader)\ **Post date:** [May 1, 2005, 4:39am UTC](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734/23 "2005-05-01T04:39:27Z")
> [@clairobscur](#): > > How does this work, exactly? s your cerficate based on a given amount of precious metal, in which case, its value in dollars will fluctuate with the value of gold/silver, or is a liberty dolar = 1 US dollar, in which case, they will issue more “liberty dollar” if gold/silver raise in value, and withdraw part of them if they lose value? > > I assume the first, since the second would be nonsentical (your liberty dollar would be exactly the same thing as a US dollar, with the same supposed risks, except for the part about other people not accepting it), but in this case what difference between issuing/using these bills and issuing/using plain gold or silver coins??? > > I both cases, I don’t really see the point… Heh, they also issue silver and gold coins. Far as I can tell, they really are a bunch of crazies. Their website, typos aside, goes on about how the Federal Reserve is unconstitutional or some such. What cracks me up is how you get Liberty Dollars… you buy them with Federal currency. _slaps forehead_ Still, the money is kinda cool looking. Might make for a nice birthday gift for a friend or loved one who collects money or something. It also amuses me greatly how many places in College Station, Texas take Liberty Bucks. ---
**Author:** ![Tripler](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tripler/32/21807_2.png) [@Tripler](https://boards.straightdope.com/u/Tripler)\ **Post date:** [May 1, 2005, 3:14pm UTC](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734/24 "2005-05-01T15:14:27Z")
> [@clairobscur](#): > > How does this work, exactly? s your cerficate based on a given amount of precious metal, in which case, its value in dollars will fluctuate with the value of gold/silver, or is a liberty dolar = 1 US dollar, in which case, they will issue more “liberty dollar” if gold/silver raise in value, and withdraw part of them if they lose value? IIRC, the value of a dollar was legislatively tied to a specific mass of gold. . . i.e. $1 = 1 oz. of gold. The market went wherever it wanted to, but that ounce was $1. Tripler . . . if I recall correctly. ---
**Author:** ![Lumpy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lumpy/32/446_2.png) [@Lumpy](https://boards.straightdope.com/u/Lumpy)\ **Post date:** [May 1, 2005, 3:42pm UTC](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734/25 "2005-05-01T15:42:11Z")
What about bank notes? State-chartered banks used to issue their own notes, which if I"m not mistaken were the equivalent of checks issued by the bank payable to bearer. IIRC, legislation in the 19th century enacted a federal tax or fee upon such notes that drove the practice out of business ---
**Author:** ![Si\_Amigo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/si_amigo/32/2877_2.png) [@Si\_Amigo](https://boards.straightdope.com/u/Si_Amigo)\ **Post date:** [May 1, 2005, 4:02pm UTC](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734/26 "2005-05-01T16:02:02Z")
Aren’t casino chips also a form of currancy? ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [May 1, 2005, 5:38pm UTC](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734/27 "2005-05-01T17:38:35Z")
Heck, the kids I used to go trick-or-treating with used Good-n-Plentys as currency. Nobody actually liked them, but everyone accepted them in trades, because everyone knew that everyone else would accept them in trades, so you could in turn trade them for something you do like. I’ve no clue how this practice started, but have pretty much come to the conclusion that currency comes naturally to humans, and that in a situation without any, we’ll spontaneously invent it. ---
**Author:** ![Tripler](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tripler/32/21807_2.png) [@Tripler](https://boards.straightdope.com/u/Tripler)\ **Post date:** [May 1, 2005, 7:32pm UTC](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734/28 "2005-05-01T19:32:03Z")
> [@Si Amigo](#): > > Aren’t casino chips also a form of currancy? They are, and I remember seeing a sign in Laughlin, NV that once read: “It is against Federal Law to use a casino’s chips in another casino. Only house chips may be used in this casino.” I have heard that occasionally, casinos come up with each other’s chips, for which there is a “clearinghouse” for 'em. But I don’t think you can use a Ceasar’s chip in the Tropicana. Tripler Hrm. The economies of Vegas. 😕 ---
**Author:** ![Raguleader](https://avatars.discourse-cdn.com/v4/letter/r/258eb7/32.png) [@Raguleader](https://boards.straightdope.com/u/Raguleader)\ **Post date:** [May 2, 2005, 12:59am UTC](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734/29 "2005-05-02T00:59:15Z")
> [@Tripler](#): > > They are, and I remember seeing a sign in Laughlin, NV that once read: “It is against Federal Law to use a casino’s chips in another casino. Only house chips may be used in this casino.” > > I have heard that occasionally, casinos come up with each other’s chips, for which there is a “clearinghouse” for 'em. But I don’t think you can use a Ceasar’s chip in the Tropicana. > > Tripler > Hrm. The economies of Vegas. 😕 Heh, I’m suddenly reminded of a story I heard… someone verify this if they can please… So there are a bunch of Catholic churches in Las Vegas, it seems, and it’s not at all uncommon for churchgoers to leave casino chips in the collection basket. All the churches bundle these up and send them off to a central office, where the chips are sorted out to be taken back to their casinos and cashed in. Once a week a junior priests makes the rounds of the casinos, cashing in the chips and taking the money back to the churches it goes to. This priest is locally known as… The Chip Monk. ---
**Author:** ![GaryM](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/garym/32/241_2.png) [@GaryM](https://boards.straightdope.com/u/GaryM)\ **Post date:** [May 2, 2005, 1:13pm UTC](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734/30 "2005-05-02T13:13:44Z")
> [@Raguleader](#): > > Heh, I’m suddenly reminded of a story I heard… someone verify this if they can please… > > This priest is locally known as… The Chip Monk. Is he driven around by the “Fish Frier”? ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [May 2, 2005, 4:15pm UTC](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734/31 "2005-05-02T16:15:09Z")
> [@Raguleader](#): > > Most major universities that I’ve visited had their own form of currency (Texas A&M has AggieBucks, Baylor has BearBucks, etc.) that is used by a number of local businesses. Downside to this is that it’s never accepted at major retail places, upside is that almost all the local resteraunts take them, as do most of the soda machines on campus. They’re not really currency systems- they’re more like banking systems. Aggiebucks in particular, are just a pre-paid debit system. You put $300 in your Aggiebucks account, and you have $300 Aggiebucks to spend. The value of an Aggiebuck is exactly the value of one US Dollar. The reason they do it is so that the school can invest the money deposited, and so that they can control where that money’s spent- back when I was at A&M, the Aggiebucks system was only useful on campus, so you were stuck with places like the Commons snack bar, Bernie’s, the Underground, etc… (and for a while there, you could go out to Easterwood airport and buy beer with Aggiebucks, but they stopped that quick). The advantages to the users are that you can use your student ID to buy things, and not have to lug around a bunch of cards and cash, and that Mom and Dad can pay for Aggiebucks as part of the semester fees. Other than that, it’s probably more useful to use cash- I think if I was there today, I’d probably just use a debit card and not bother with Aggiebucks. ---
**Author:** ![Musicat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/musicat/32/20189_2.png) [@Musicat](https://boards.straightdope.com/u/Musicat)\ **Post date:** [May 2, 2005, 4:22pm UTC](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734/32 "2005-05-02T16:22:36Z")
> [@Chronos](#): > > Heck, the kids I used to go trick-or-treating with used Good-n-Plentys as currency. Forgive my ignorance – I must have missed class that day – but what is a Good-n-Plenty? ---
**Author:** ![Raguleader](https://avatars.discourse-cdn.com/v4/letter/r/258eb7/32.png) [@Raguleader](https://boards.straightdope.com/u/Raguleader)\ **Post date:** [May 2, 2005, 6:38pm UTC](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734/33 "2005-05-02T18:38:12Z")
> [@bump](#): > > Other than that, it’s probably more useful to use cash- I think if I was there today, I’d probably just use a debit card and not bother with Aggiebucks. Yeah, I stopped using them because they were A) too easy to spend and B) too incovnenient to recharge since I have to go do it in person or send them a check in the mail. If there was some option to say, pay them a lump sum of money up front and then have it parceled out to me each week so I don’t spend $300 on snickers bars my first week of the semester, that would be great. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [May 2, 2005, 7:07pm UTC](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734/34 "2005-05-02T19:07:12Z")
> [@](#): > > Forgive my ignorance – I must have missed class that day – but what is a Good-n-Plenty? Licorice-based candies. They’re covered in colored candy coatings and look sort of like gelatin capsules, and come in small boxes. Point is, nobody in my circle of friends at the time liked licorice, so (among us) they had no inherent value. ---
**Author:** ![F.U.Shakespeare](https://avatars.discourse-cdn.com/v4/letter/f/aca169/32.png) [@F.U.Shakespeare](https://boards.straightdope.com/u/F.U.Shakespeare)\ **Post date:** [May 2, 2005, 7:57pm UTC](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734/35 "2005-05-02T19:57:35Z")
During his financial difficulties in the early 90’s, Donald Trump is supposed to have come up with an interesting, one-time tactic. His wealthy father agreed to loan him (IIRC) a million dollars. Dad walked into one of Trump’s casinos and bought a million dollars worth of chips. He took these chips to a safe-deposit box, and left them there. The idea being, if the Donald did file for Chapter 11 protection, while his other creditors would have to go through legal proceedings to collect even part of their money, Trump’s dad would be able to walk into the casino and get his money back, in full, ahead of any of the creditors. (I have no idea as to the legality of this tactic, or the truth of this rumor. Trump’s longtime nemesis _Spy_ Magazine wrote about it, claiming that Trump’s financial back was to the wall). ---
**Author:** ![Mr.Slant](https://avatars.discourse-cdn.com/v4/letter/m/c57346/32.png) [@Mr.Slant](https://boards.straightdope.com/u/Mr.Slant)\ **Post date:** [May 2, 2005, 10:24pm UTC](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734/36 "2005-05-02T22:24:34Z")
> [@F. U. Shakespeare](#): > > During his financial difficulties in the early 90’s, Donald Trump is supposed to have come up with an interesting, one-time tactic. > > His wealthy father agreed to loan him (IIRC) a million dollars. > SNIP Did Spy Magazine ever explain what the purpose of all this was? Converting $1 million from an interest-bearing account somewhere into casino chips that are subject to inflation seems like a really silly move. Sure, it may protect his dad’s investment, but at the same time, Trump can’t actually INVEST these funds. At all. Anywhere. ---
**Author:** ![Garfield226](https://avatars.discourse-cdn.com/v4/letter/g/9e8a1a/32.png) [@Garfield226](https://boards.straightdope.com/u/Garfield226)\ **Post date:** [May 3, 2005, 12:07am UTC](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734/37 "2005-05-03T00:07:55Z")
> [@clairobscur](#): > > How does this work, exactly? s your cerficate based on a given amount of precious metal, in which case, its value in dollars will fluctuate with the value of gold/silver, or is a liberty dolar = 1 US dollar, in which case, they will issue more “liberty dollar” if gold/silver raise in value, and withdraw part of them if they lose value? > > I assume the first, since the second would be nonsentical (your liberty dollar would be exactly the same thing as a US dollar, with the same supposed risks, except for the part about other people not accepting it), but in this case what difference between issuing/using these bills and issuing/using plain gold or silver coins??? According to [this page](http://www.libertydollar.org/html/silverover10.asp), each certificate is backed by a definite, defined amount of silver. Currenly, the $10 certificates are backed by one ounce. The site also says that when silver rises near $10/oz., they will release a new series of bills (which are differentiated from the old ones). In the new series, $20 bills will be backed with one ounce of silver and $10 will only be backed by a half-ounce. The old bills can be traded in for new bills (e.g. an old $10 two new $10s), redeemed for the silver, or simply kept. > [@The Liberty Dollars guys](#): > > As the dreaded Federal Reserve Notes are the country’s current money, it is important that the Liberty Dollar function on a one-to-one basis with Federal Reserve Notes. This parallel feature also provides an invaluable comparison between the value of a debt-based currency that depreciates, and a value-backed currency that holds its value or has the potential to appreciate in value. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [May 3, 2005, 2:35am UTC](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734/38 "2005-05-03T02:35:38Z")
> [@](#): > > Did Spy Magazine ever explain what the purpose of all this was? > Converting $1 million from an interest-bearing account somewhere into casino chips that are subject to inflation seems like a really silly move. > Sure, it may protect his dad’s investment, but at the same time, Trump can’t actually INVEST these funds. At all. Anywhere. The Donald definitely benefits from this transaction, since he (or more precisely, his company) gains 1 million US dollars cash, which it can invest for interest in whatever the heck he wants. The Dad does not particularly benefit, having a no-interest, non-investible one million dollar asset, but considering the relationship, one presumes that he did this as a favor to his son. It’s also possible that The Donald offered him some reasonable interest rate in exchange (although the interest would not, of course, be protected against bankruptcy in the same manner as the principle). ---
**Author:** ![Uncommon\_Sense](https://avatars.discourse-cdn.com/v4/letter/u/f9ae1b/32.png) [@Uncommon\_Sense](https://boards.straightdope.com/u/Uncommon_Sense)\ **Post date:** [May 3, 2005, 4:57pm UTC](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734/39 "2005-05-03T16:57:43Z")
> [@Chronos](#): > > The Donald definitely benefits from this transaction, since he (or more precisely, his company) gains 1 million US dollars cash, which it can invest for interest in whatever the heck he wants. The Dad does not particularly benefit, having a no-interest, non-investible one million dollar asset, but considering the relationship, one presumes that he did this as a favor to his son. It’s also possible that The Donald offered him some reasonable interest rate in exchange (although the interest would not, of course, be protected against bankruptcy in the same manner as the principle). Yes, but the balance of money recieved verses chips collected at the end of the day would be grossly out of whack, if such a count is taken. One would think that that money (the Million bucks) would have to be _held_ against the missing chips, no? ---
**Author:** ![F.U.Shakespeare](https://avatars.discourse-cdn.com/v4/letter/f/aca169/32.png) [@F.U.Shakespeare](https://boards.straightdope.com/u/F.U.Shakespeare)\ **Post date:** [May 3, 2005, 5:02pm UTC](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734/40 "2005-05-03T17:02:18Z")
Yes, it was a favor to Donald – the father didn’t really get anything out of it, but was protected from _losing_ any of his principle. In those days, _Spy_ lapped up anything hinting at Trump’s situation worsening, and hitting his dad up for a short-term, make-payroll kind of loan was definitely in that category. The short term of the loan would also have reduced the father’s loss of potential return on the funds elsewhere. > [@Chronos](#): > > The Donald definitely benefits from this transaction, since he (or more precisely, his company) gains 1 million US dollars cash, which it can invest for interest in whatever the heck he wants. The Dad does not particularly benefit, having a no-interest, non-investible one million dollar asset, but considering the relationship, one presumes that he did this as a favor to his son. It’s also possible that The Donald offered him some reasonable interest rate in exchange (although the interest would not, of course, be protected against bankruptcy in the same manner as the principle). [Previous page](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734.md?page=1) [Next page](https://boards.straightdope.com/t/is-it-illegal-to-make-use-your-own-currency/301734.md?page=3)