Post by Tom MoorePost by SufaudAnd in fact "legal tender" today simply begs the
question: "can you pay your taxes with this money".
This is the classic example given in economics textbooks: people will
accept a given currency if they can pay their taxes with it. For the
rest of their obligations they can barter, etc. Think of Cuba, where
Cuban currency will not buy you much, but you can pay your taxes with
it. There are two parallel currencies: the US dollar (for buying
imported goods, among other things) and ration coupons.
Post by Tom MooreNo, the offer of legal tender, extinguishes a civil debt. H M
government can decline legal tender: they make up their own rules.
That's too theoretical and legalistic. If we are talking of cash
transactions, you can't force a shopkeeper to sell to you for
banknotes s/he doesn't want to accept, "legal tender" or not: there is
no "debt" yet. Of course, as in Zimbabwe, the law may be different,
and may force the shopkeeper into insolvency, accepting worthless
paper.
Post by Tom MoorePost by SufaudIn real life, you can change regional notes freely
at the English branch (or owning bank) of the Scottish
or NI bank that issued them.
All sterling linked currency must by law be credited at face value into
your UK bank account.
Not quite true, but we may be nit-picking over the term "Sterling
linked currency". There used to be currency-board currency (mostly in
the Colonies), and probably there were British Forces notes (I have
samples of US military payment certificates, and I assume the British
had the same thing during the Occupation). Scottish banknotes tend to
sell at a discount (by comparison with English ones) overseas. Mostly
because of the nuisance value; otherwise they would have to be bundled
and shipped off to the UK.
Post by Tom MoorePost by SufaudChannel Islands currency
is a special case.
I meant, in terms that it is not issued by a bank that has branches in
the City, but by the Bailiwick treasury (or some such), as I recall.
Post by Tom MooreNo that's linked to sterling, and will be credited into your UK bank
account at face value. Then you can withdraw the same amount in legal
tender.
Given this, the question must be why sterling linked currency is
refused. I could tell you, but sorry, it is more than my job's worth.
Nobody is going to accept a banknote s/he has never seen before, and
cannot verify as being genuine. Funnily enough, some of the most
counterfeit-proof currency in the world is rubbish inconvertible
money. However impressive a banknote issued by the Left Bank of the
Severn may be, if you haven't seen one before, no law on "legal
tender" is going to make you change your mind. I think it is far
easier to spend euros in Northern Ireland than Gibraltar or Channel
Islands, or even Scottish money.
Anyway, as I said, and as you agreed, the issue is largely moot. I
would rather spend my time trying to figure out which debit or credit
card fleeces me the least on currency exchange. Amex used to load the
conversion with 1/2 of 1%. Then it was 1%. Now I see it's 2.73%.
That's the best reason I can think of for switching to the euro.
Now I'm going to read a book I used in economics class 40 years ago:
"Monetary Policy Under the International Gold Standard 1880-1914" by
Arthur I. Bloomfield, published in 1959 by the Federal Reserve Bank of
New York.