29 July 2013

Rich as Croesus -- Origination of Legal Tender

Money is commonly credited to have originated in seventh century BC; however, money has been in existence long before written history, and metallurgy had long been at an advanced state by seventh century B.C., advanced enough to make rings, swords, shields, jewelry, and such. Creating small, circular disks of metal to be used as money would not have been a technological nor conceptual breakthrough. Minters stamping ingots of copper or silver to certify a coin’s weight and fineness had been practiced long before in Babylon. So what significant event happened to money in seventh century B.C. to confuse it with the origination of money itself? Answer: the origination of Legal Tender.

In sixth century BC, the first Legal Tender coinage was stamped in Lydia, a leading gold producer, a country in what is now western Turkey. King Croesus of Lydia [560-546 BC] is credited with this development of Legal Tender, often confused with the birth of money itself. In the process, Croesus became fabulously wealthy.

Croesus (Random House Dictionary)
1. died 546 B.C., king of Lydia 560-546: noted for his great wealth. 2. a very rich man.

The History of Money by Jack Weatherford, 1997
"As rich as Croesus" is a common expression in modern English, Turkish, and other languages around the world.

A Man in Full by Tom Wolfe, 1998
He was Old Family and Piedmont Driving Club all the way, and he was rich as Croesus.

The Three Musketeers by Alexandre Dumas, 1844
However, when he served the dinner given by d’Artagnan and saw him take out a handful of gold to pay for it, Planchet thought his fortune was made and thanked heaven for having placed him in the service of such a Croesus.

Martin Luther, 1517
In 1517, Martin Luther posts his 95 Theses protesting the sale of indulgences by the pope in order to raise money to build a basilica to shelter the bones of St. Peter. “Why doesn’t the pope build the basilica of St. Peter out of his own money? He is richer than Croesus."

Fifty Shades of Grey by EL James, 2012
Honestly, fancy falling for a man who’s beyond beautiful, richer than Croesus, and has the Red Room of Pain waiting for me.

The name Croesus has passed the test of time for defining wealth. By what mechanism was this wealth obtained?

Though two gold coins may be of the same quality and weight, only a coin stamped by the State is considered Legal Tender, and therefore a valid payment for taxes and debt. If one coin is not stamped Legal Tender, it may be rejected by the State or Creditor as a valid payment, throwing the Taxpayer or Debtor into default, evoking eviction, seizure, and/or slavery clauses. Since the State monopolizes Legal Tender, all Taxpayers and Debtors are motivated to sell a portion of their goods and services to the State, directly or indirectly, in order to obtain the Legal Tender required to avoid tax and debt default. The State is in a position to pay less than Market value for the goods and services received, skewing wealth towards the State at the expense of the Taxpayer and Debtor.

The use of Legal Tender spread throughout the Greek States. Greek architecture has overwhelmingly adorned the institutions of Law and Money. The first public building constructed by the new government of the United States, well before the Capitol or White House, was the Mint.

Legal tender is a derivative form of money, not money itself.

Legal Tender (Random House Dictionary):
Currency that may be lawfully tendered or offered in payment of money debts and that may not be refused by creditors.

Legal Tender (Dictionary of Cultural Literacy):
Any form of money that a government decrees must be accepted in payment of debts.

Croesus and the Delphi Oracle

The Delphi Oracle was renowned both for the ambiguity and the occasional plain accuracy of its answers. Croeus, king of Lydia [560-546BC], wanted to test the most highly regarded Greek oracles. He sent messengers to each one of them with instructions to ask, after exactly 100 days had passed, the following question: “What is the king of Lydia doing today?” Five of the oracles were wrong. A sixth was close. The oracle at Delphi replied as follows:

Lo, in my sense there striketh the smell of a shell-covered tortoise,
Boiling now in a fire, with the flesh of a lamb in a cauldron.
Brass is the vessel below, and brass the cover above.

As it happened, Croesus was, at that very moment, cooking a lamb-and-tortoise stew in a brass pot. Convinced of the oracle’s accuracy, he questioned it about the weightier question on his mind, namely the Persian Wars. The answer was that a great army would be defeated. Taking this for a good omen, Croesus sent his army into battle against Cyrus the Great. Again the oracle hit the mark, but it was Croesus’ army that was defeated.

The Delphic Oracle, 1899, John William Godward [1861-1922]

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