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Legal Tender? Maybe Not, Says Louisiana Law 655

Posted by timothy
from the this-is-pretty-nuts dept.
First time accepted submitter fyngyrz writes "Lousiana has passed a law that says people may no longer use cash for second hand transactions. The idea is to make all transactions traceable, thus foiling copper theft, etc. This move has profound implications that range from constitutional rights to Bitcoin, Craigslist and so forth; I wonder if there are any Slashdotters at all that support such a move." On the list of exceptions: people who deal in used goods or "junk" less frequently than once per month, and (drumroll, please) pawn shops. That means a pretty big chunk of the population who post in online classified ads in Louisiana are probably already in violation.
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Legal Tender? Maybe Not, Says Louisiana Law

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  • by Kenja (541830) on Thursday October 20, 2011 @03:29PM (#37782416)
    Sorry Louisiana, you dont get to decide what federal currency can be used for.
    • by hedwards (940851) on Thursday October 20, 2011 @03:31PM (#37782452)

      Precisely what law? You're only required to take cash when servicing debt, not at the time of the transaction.

      • by Verdatum (1257828) on Thursday October 20, 2011 @03:35PM (#37782564)
        I've wondered about this before. The wording of the law is at http://www.law.cornell.edu/uscode/31/5103.html [cornell.edu]

        I don't know if transactions are the same as "public charges" or not.

        • by Lunix Nutcase (1092239) on Thursday October 20, 2011 @03:39PM (#37782650)

          They aren't. This is why it's perfectly legal to refuse cash when you sell something. But you must accept cash for loan payments and any other repayments of debt.

          • by maxwell demon (590494) on Thursday October 20, 2011 @03:43PM (#37782740) Journal

            Well, in that case, the new law should be easy to circumvent: You don't sell the product for cash, but you give it on credit, and the debt is then immediately paid back using cash.

            • by MightyMartian (840721) on Thursday October 20, 2011 @03:54PM (#37782998) Journal

              Indeed. It strikes me that simply signing an IOU and then immediately paying it ought to take care of the direct cash payment angle. Just make sure you save the IOU along with any invoices and other source documents, and I don't think there's anything the state could do about it.

              • by sexconker (1179573) on Thursday October 20, 2011 @04:15PM (#37783388)

                Indeed. It strikes me that simply signing an IOU and then immediately paying it ought to take care of the direct cash payment angle. Just make sure you save the IOU along with any invoices and other source documents, and I don't think there's anything the state could do about it.

                And thus you defeat the point of using cash.
                The IOU must be provided to the state, essentially upon demand, so they can track what you're buying and selling.
                If you can't produce an IOU, or any similar document listing what was sold and for how much and what the terms of payment were, then you'll be hit with this law.

                • by nullchar (446050) on Thursday October 20, 2011 @04:39PM (#37783772)

                  Great point, sexconker:

                  If you can't produce an IOU, or any similar document listing what was sold and for how much and what the terms of payment were, then you'll be hit with this law.

                  Privacy keeps eroding towards no anonymity. This law does appear to restrict (and ultimately reduce) anonymous transactions.

                  What economic motive would provide an incentive to trace all second-hand transactions?
                      Tax motive: ideally taxes were paid on the first sale; are they required on all subsequent sales?
                      Raw consumption motive: discourages purchasing of "junk" to encourage more retail consumption?
                      Corporate motive: someone has to keep track of this data, a government contract winner would be excited for the data mining potential.
                      Other motive?

                  • by Obfuscant (592200) on Thursday October 20, 2011 @04:42PM (#37783838)

                    Other motive?

                    Law enforcement: when someone steals your stereo and sells it to the second hand shop, they'll have a record of who did it, and when someone buys it from that shop before you find out and can recover it, you can find it and get it back.

                    • Re: (Score:3, Insightful)

                      by sexconker (1179573)

                      Other motive?

                      Law enforcement: when someone steals your stereo and sells it to the second hand shop, they'll have a record of who did it, and when someone buys it from that shop before you find out and can recover it, you can find it and get it back.

                      As if the cops give a shit about your stolen property.
                      Thanks for the LOL dude, Thursday was pretty boring up until this post.

                    • by hairyfeet (841228) <bassbeast1968@@@gmail...com> on Thursday October 20, 2011 @09:57PM (#37787082) Journal

                      BWA HA HA HA HA...oh wait, you were serious? BWA HA HA HA HA HA...you must not have had to deal with the cops very often. When my sister's checks were stolen the place that cashed them wrote the perps DL number on the checks and what did the cops put down? "Chance of solving...0%". I guess having to you know, get up, walk to the PC, put in the numbers, man that is just too much damned work. The sad part? the ONLY time I've ever seen local cops do their jobs is when there was potential for profit for them. true story:

                      My late sis live across the street from a gal that was getting battered. Restraining order didn't do shit, average police response time? FOUR HOURS. the last time put her in the hospital and with it escalating sis called me for help. I went to the gal and said "Here is how you solve the problem, you say the "D" word. When he starts beating on the door you call the cops and tell them you think he's high and has a bunch of drugs on him". she didn't believe me but promised to try it. Well sure enough next Saturday rolls around and here comes Mr Abuser. She says the "D" word. police response time? FOUR MINUTES and TWO squad cars. After they tore his truck to the frame and didn't score they were soooo pissed they threw the book at him, every single violation they could think of. He got something like 9 year all told.

                      so yeah, I kinda doubt law enforcement has jack shit to do with it, more likely they have never met a tax they didn't like and what to make sure they can squeeze the poor down in LA for every single shekel they can get. Frankly wouldn't surprise me with the asshole politicians we have in this country." Screw civil liberties, we need MORE MONIES nom nom nom!"

                    • If I may correct you, it too the BUSH administration and FEMA, whose appointed director, was a friend of Bush, that took five days to respond to the aftermath of Katrina.

                      "Brownie" had essentially zero experience in running any kind of federal agency tasked with swift response.

                      (Indeed, one of his previous jobs was some manner of officer in a horse breeding group. And he was fired from that post, if I recall correctly)

                      Remember, this is the same administration that ignored the PDB of August 6, 2001, "Bin Laden

            • by rahvin112 (446269) on Thursday October 20, 2011 @04:25PM (#37783544)

              Why circumvent an illegal law. Yes Illegal. Currency is an issue that there is no doubt in the Constitution, it's a power expressly reserved to the federal government. It's exclusively federal precisely because they had so many problems with it during the articles of confederation where the US had several dozen different currencies that were all essentially worthless. The federal courts tend to take a dim view of any attempt by the states to circumvent federal currency and bank laws because the constitution is so very direct about that authority resting with the federal government.

              • States can specify alternate legal tender, if and only if it is silver and gold coin.

                Article 1, Section 10:

                1: No State shall ... coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; .

              • ...how about it says right on the bill itself "THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE". Top-left corner of every bill printed in the United States of America. NOW, if they want to make a law that says you have to keep a record of every transaction, public and private, that's a different story, BUT YOU CANNOT REFUSE CASH FOR PAYMENT OF ANY DEBT!!! Pittsburgh bars are practicing this illegal maneuver as well and need to be hammered by the courts for it, as well. Someone just needs to t
            • Extending credit to every stranger who says they want to buy something from you? That's so 2007.

      • by Kenja (541830) on Thursday October 20, 2011 @03:39PM (#37782634)
        The only way a transaction does not involve "debt" is if the parties involved agree to it before hand. And if there is no debt for the transaction, I dont need to give you a traceable payment. If I do, then its debt and US currency is good for it. There are a bunch of federal trade and commerce laws out there to back this up and it could also be argued that it falls under the US Constitution. Having a legal requirement that the government can track all sales transactions violates a whole bunch o' stuff.
        • by SharpFang (651121)

          Actually - but this is only semantics - the only way a transaction does not involve "debt" is if the parties involved agree to it before hand and exchange goods for goods, or goods for services, without having a currency ever involved.

          Interestingly, about every currency nowadays is a debt, an IOU by the government to the central bank. More interestingly, this is a debt without cover. Government has no income or property to ever pay this debt, other than taking another loan. (federal gold reserve is a tiny d

        • by canajin56 (660655)
          Except that the law defines a debt as an something that is owed and must be paid. When I ask for a ticket to a movie and the clerk says "$10 please" that is not a debt because I don't HAVE to pay it, I can back out of the transaction at no cost. When I buy a prepay card for my cellphone, that's not a debt because I can say "Actually, never mind!" When I get a cellphone bill for my not-prepay cell, that is a debt because I the service was rendered, I must pay it. If I rent an apartment, the damage deposi
      • by ackthpt (218170) on Thursday October 20, 2011 @03:39PM (#37782646) Homepage Journal

        Precisely what law? You're only required to take cash when servicing debt, not at the time of the transaction.

        To quote my $20 - "This note is legal tender for all debts, public and private"

        In a technical sense, accepting goods places a burden of debt upon the recipient.

        Sounds like something which will be brought to the Supreme Court, where a state claims rights in interstate (even if it is intrastate) commerce which supersede the domain of the federal government.

        Interesting ambition, but flawed.

      • by sjames (1099)

        So, "loan" the price of the item to the would be buyer. When they take a step from the counter, demand payment. It is now a debt and may be settled with U.S. currency.

        • by ackthpt (218170)

          So, "loan" the price of the item to the would be buyer. When they take a step from the counter, demand payment. It is now a debt and may be settled with U.S. currency.

          Or enter into a written or verbal contract which implies a debt.

    • I wonder how that works, since the government doesn't actually own that money. It is legal tender, provided by the Federal Reserve (which isn't "federal" at all, it's a private bank). It is loaned, at interest, to the government and, by extension, everyone who lives in the USA.
      • by LoyalOpposition (168041) on Thursday October 20, 2011 @03:58PM (#37783076)

        It is legal tender, provided by the Federal Reserve (which isn't "federal" at all, it's a private bank).

        Actually, the Federal Reserve System is federal. Let me contrast it with the company where I work so you can see the differences.
        1. The FRS was created in 1913 by an act of congress. The place I work was incorporated in Delaware as a Delaware company.
        2. The FRS is lead by the Chairman of the Board of Governers who is appointed by the President of the United States. The place where I work is lead by the Chief Executive Officer, who is appointed by the Board of Directors.
        3. The FRS is run by the Board of Governors who are appointed by the President of the United States. The place where I work is run by the Board of Directors, who are selected by shareholders.
        4. Congress has oversight of the FRS. The place where I work, not so much.
        5. The government sets the salaries of the highest-paid individuals of the FRS. The place where I work, not so much.
        6. By law, the FRS has to give any profit over 6% to the United States Treasury. In 2010, the FRS made a profit of $82 Billion. They paid the Treasury $79 Billion. The place where I work, not so much.

        ~Loyal

        • Wow, you did a good job copying from the opening paragraph of the wikipedia entry [wikipedia.org] for the Federal Reserve, but it is still a mostly privately owned and operated bank. Just because it has public portions doesn't mean it is Federal. Also, the Congress can only oversee it. If it wanted, "it's decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government". That means it is NOT federal. It is only "federal" by name. This is why all money is loaned at in
        • by 7-Vodka (195504)

          Congress has oversight of the FRS. The place where I work, not so much.

          Really? Because congress can no longer even get numbers about how much money is in circulation, how much has been printed and how much has been loaned out.

          There's a reason why they had to threaten to pass a bill to audit the fed before they found out anything at all.

          Also, I would like you to answer, who owns the fed? who is on the board of governers? How many appointments has each president made and who were they and on what basis have they been appointed and were they approved by congress?

          Furthermore,

    • by cbhacking (979169)

      Indeed. According to this nice pretty $20 bill I have here, it is a "LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE" and is signed by the Treasurer of the United States and the Secretary of the Treasury. I'm pretty sure that, in matters of currency, their authority thoroughly trumps that of the Louisiana legislators.

      How the hell did they even think this would work?

      • Because there's no debt if the sale isn't made, and the law appears to be preempting the sale if the purchaser can't provide payment with some kind of paper trail. As I understand it, if you have an existing debt, and the creditor refuses to accept cash, then the debt is null and void, but there's no obligation for them to make a sale/establish a debt simply because you are presenting cash. Whether any other laws figure into this, I can't say.
      • Because you misunderstand what is debt and what isn't?

  • by aldousd666 (640240) on Thursday October 20, 2011 @03:29PM (#37782418) Journal
    I thought this was a joke when I first read it. Apparently it's been on the books a few months though.
  • That's not debt. (Score:4, Informative)

    by hedwards (940851) on Thursday October 20, 2011 @03:30PM (#37782428)

    It's only debt if the companies are accepting the goods without paying, as long as they pay up when the transaction occurs there's no legal requirement that they pay cash. Apple did a similar thing a while back when they refused to sell iPhones for cash.

  • Payment shall be made in the form of check, electronic transfers, or money order issued to the seller of the junk or used or secondhand property and made payable to the name and address of the seller. All payments made by check, electronic transfers, or money order shall be reported separately in the daily reports required by R.S. 37:1866.

    BitCoin is an electronic transfer, hence as long as it is reported it is as legal as everything else.

    To me it looks like speculators have finished dumping [slashdot.org] and now want more buyers to drive up the price.

    Anyway, this isn't a legal tender issue. Legal tender only applies for debt, this is why Apple can get away with no cash [tuaw.com] policies.

    IANAL

  • Craigslist? (Score:4, Interesting)

    by tekrat (242117) on Thursday October 20, 2011 @03:30PM (#37782440) Homepage Journal

    So, if I sell a motorcycle on Craigslist and the buyer pays in cash, this is now illegal? That's somehow gotta be unconstitutional, but I need a lawyer for that... And can I pay the Lawyer in cash?

    May I be the first to say... Fuck You Louisiana. I'm never going there and I hope you get wiped out by a Hurricane.

  • by bl968 (190792) on Thursday October 20, 2011 @03:32PM (#37782466) Journal

    It would seem that this would be federal issue, not a state one since this can affect interstate commerce. Basically it's unconstitutional.

  • Can a state elect to locally invalidate the federal mandate that states that bills issued by the US Treasury are "Legal tender for all debts public and private"?
    This may be something that can be easily challenged in federal court, and I truly hope someone does challenge it.

    The worst part of this state bill is that every transaction, along with the verified identity of both parties, be recorded and submitted to law enforcement on demand.

    • by pclminion (145572)

      Can a state elect to locally invalidate the federal mandate that states that bills issued by the US Treasury are "Legal tender for all debts public and private"?

      This is a common misunderstanding. The currency is legal tender for all DEBTS, not all transactions. When you purchase something, you are doing exactly that -- making a purchase, not paying off a debt.

      • by bhtooefr (649901)

        So, you sell the item to the person under net 60.

        Seconds, of course, not days.

        Still, that's a debt...

      • by ArcherB (796902)

        Can a state elect to locally invalidate the federal mandate that states that bills issued by the US Treasury are "Legal tender for all debts public and private"?

        This is a common misunderstanding. The currency is legal tender for all DEBTS, not all transactions. When you purchase something, you are doing exactly that -- making a purchase, not paying off a debt.

        Fine. You give me the widget you're selling and I owe you a debt of whatever you were selling it for. I pay you in cash, which "is legal tender for all debts, public and private".

        The "transaction" was you giving me the widget. The paying of the debt was me giving you the cash.

    • Can a state elect to locally invalidate the federal mandate that states that bills issued by the US Treasury are "Legal tender for all debts public and private"? This may be something that can be easily challenged in federal court, and I truly hope someone does challenge it.

      The worst part of this state bill is that every transaction, along with the verified identity of both parties, be recorded and submitted to law enforcement on demand.

      Considering there is no federal mandate that says some one *must* accept US currency for payment, I think your question is moot. US currency is legal tender so you can accept it, just as you can accept anything else in payment that you want. That is the real question, IMHO - is the state's argument for limiting the use of cash compelling enough to allow it to limit your ability to choose to pay with cash?

  • Wonder if you can get around it by relocating the server (and payment system?) to a state/country where it's legal.

  • by gurps_npc (621217) on Thursday October 20, 2011 @03:34PM (#37782534) Homepage
    What makes second hand goods different than first hand goods?

    Oh, I know, because it is unwieldy and likely an illegal invasion of privacy.

    No, you don't have the right to find out what I buy. Not even if I am poor and can only afford second hand stuff.

    • This is just because corporations don't like second-hand goods. Why? Because corporations can't make money on second-hand goods. If people were not allowed to sell items to each other directly, or buy second-hand, it would force the people who buy used things to buy new, which would make more money for the blood sucking corporations, and by extension anyone who works for or with them which includes politicians and lobbyists.
  • Traceability (Score:3, Interesting)

    by almitydave (2452422) on Thursday October 20, 2011 @03:34PM (#37782538)

    My understanding is that pawn shops are allowed to use cash because they're already legally required to keep detailed records about the individuals with whom they deal, and this law is all about making it hard for criminals to sell stolen goods without a paper trail.

    But this seems like a case of legislatively throwing the baby out with the bath water: "I'll sell you this book of mine for $5, but you'll have to write me a check because I sold someone an old XBox game last week for cash." Or are small private transactions not regulated by the law (I haven't read the text of the bill, obv.)?

    If not, this seems outrageous, and I'm all about the outrage!

  • Le Tax? (Score:4, Interesting)

    by FlavaFlavivirus (2021178) on Thursday October 20, 2011 @03:35PM (#37782568)
    I'm thinking that this has less to do with trying to catch "criminals," and more to do with the state missing out on all that sales tax.
    • by h4rr4r (612664)

      I am thinking you are 100% correct!
      You win one free internets, not redeemable in states that require tracking of electronic transactions.

  • by artor3 (1344997) on Thursday October 20, 2011 @03:37PM (#37782594)

    The first link in the summary contains the complete text of the bill. It does not ban cash transactions at all. Rather, it requires second-hand dealers to keep very thorough records of any cash transaction exceeding $25.

    This is a terrible law, and would make business difficult for a lot of people, and (depending on how it's interpreted) could make garage sales more trouble than they're worth. But it does not ban the use of cash. I kind of wish it did, because then it would be struck down. As it stands, the law may pass constitutional muster, and become an enormous pain in the ass for a lot of people.

  • I wonder if there is any sane human being that supports such a move.

    Fixed that for you.

  • Are they going to get a bunch of undercover agents to stake out craigslist? And what happens when people figure out they're living in an evil distopian future? You can't start pulling this sort of shit on the average joe until it is actually too late for them to do anything about it.

  • by cryfreedomlove (929828) on Thursday October 20, 2011 @03:40PM (#37782670)
    Louisiana's Governor is the young GOP superstar, Bobby Jindal. Doesn't this move restrict personal freedoms in order to wring more taxes out of the populace? Is that the GOP way all of a sudden?
    • by h4rr4r (612664)

      All of a sudden?
      Have you not been paying attention for the last many decades?

      They might love to claim otherwise but restricting personal freedoms and getting that sweet tax dollar is what they are all about. The only thing they love more than taxes is restricting personal freedoms.

  • This is just a law to keep scrap dealers from buying stolen metal. There's been trouble with people stealing copper power lines (this usually makes the news when someone tries to steal an energized one), manhole covers, and the aluminum access covers at the base of street light poles.

    Much of the bill is about people selling railroad tracks and parts thereof. Railroad tracks? Do you realize what it takes to lift and move a railroad rail? That's not something one homeless guy could do. It takes teams, cra

    • by 0123456 (636235)

      There's been trouble with people stealing copper power lines (this usually makes the news when someone tries to steal an energized one), manhole covers, and the aluminum access covers at the base of street light poles.

      So maybe instead of imposing a stupid burden on everyone, they could catch people who are stealing stuff?

      Just an idea.

  • ...where PI is set to 3.0?
  • Tin foil hat (Score:4, Insightful)

    by markdavis (642305) on Thursday October 20, 2011 @03:45PM (#37782788)

    I love how people over the years say I need to wear a til foil hat every time I mention that it is just a matter of time before the governments move to try to limit, stop, or remove the idea of "cash". Obviously there are Constitutional issues around this, but that never seems to stop the governments. And when it gets too annoying, they can just change the Constitution.

    It is not difficult to imagine a world where anything that gives you freedom from being monitored, traced, taxed, restricted, recorded, etc, is eliminated. I keep hoping it will at least wait until I am very old. Younger people don't seem to care about privacy or freedom anyway- they only want safety and convenience, so let THEM deal with it!

  • by Khashishi (775369) on Thursday October 20, 2011 @03:47PM (#37782826) Journal

    So how much is that in cigarettes?

  • SCOTUS will have a field day with this.
  • Is this a serious thing? IANAL but this could be attacked from a number of angles. Invasion of privacy. Regulation of currency beyond state's rights.

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