Is it legal to pay a big debt in small change?

Dear Cecil:

My question concerns the term "legal tender." I remember reading years ago that certain huge amounts of loose change can be rejected by a cashier as payment. But what are these amounts? I ring on a register all day long and have frequently encountered people who make purchases of $5 or more with nothing but dimes, nickels, and pennies.

To suggest an extreme example: could you force a car dealer to take $10,000 worth of nickels? Or pay your ex-wife's alimony with an enormous sack of pennies? Another thought: can you buy a newspaper with a 25-cent postage stamp?

Cecil replies:

You can buy a newspaper with a Tootsie Roll if the other guy is agreeable. The main thing is that the medium of exchange be acceptable to both parties to the transaction. In fact, during the Civil War, when coins were scarce, people used postage stamps enclosed in brass frames instead. But neither Tootsie Rolls nor stamps are “legal tender”–that is, officially recognized as legal payment for debts. Unfortunately, that’s about as far as we can go in the way of definitive statements on this subject. Legal tender happens to be one of the curious anomalies of U.S. law. At one time there were definite limits to how much small change you could legally unload on the people you owed money to–25 cents in the case of “minor coins” (the penny and the nickel) and $10 for “silver coins” (the dime, quarter, and half-dollar). In 1933, however, in the course of getting the U.S. off the gold standard, Congress offhandedly declared that all U.S. coins and currency were legal tender for all debts, period. That would appear to repeal the earlier limits. There is evidence to suggest that this was accidental, though, and the contradictory statutes have been permitted to remain on the books, perhaps in the hope that someone would bring them to a court test. No one, as far as I can tell, ever has.

Matters were further complicated when the U.S. ceased to make silver coins, having chosen to use cupronickel-clad copper instead. The $10 limit, on the face of it, applies (or applied, anyway) only to silver coins. It is at least arguable that while you might not be able to force your ex-wife to accept more than $10 in pre-1965 (i.e., silver) quarters, you could pay her off with unlimited amounts of post-1965 coins. This is not a hypothesis I would be prepared to defend tooth and nail, frankly. But if you’re the sporting type–and believe me, I’ve heard people make nuttier arguments–feel free to give it a try.

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