Mutilating Dollar Bills

The buzzword these days is “altered art”, where people take one thing and cut it up, making something else — ‘collage’, what they called it back in the seventies when I was in school.   Artist Mark Wagner makes complicated, beautiful, and psychedelic works purely from cut-up dollar bills:

You can even watch his process, with tiny bins for scraps on the left, and a stack of fresh dollars on the right being slowly shredded for art’s sake.

But – wait – if cutting pennies for art is legal, then this must be OK, right?

Let’s check out the law. 18 U.S.C. § 333 says that:

Whoever mutilates, cuts, defaces, disfigures, or perforates, or unites or cements together, or does any other thing to any bank bill, draft, note, or other evidence of debt issued by any national banking association, or Federal Reserve bank, or the Federal Reserve System, with intent to render such bank bill, draft, note, or other evidence of debt unfit to be reissued, shall be fined under this title or imprisoned not more than six months, or both.

Now that’s somewhat vague: what is “unfit to be reissued”?  According to ArtTechLaw, creative uses generally don’t incur the wrath of the Secret Service — if you’ll remember, people messing with paper money is the reason Lincoln created the Secret Service. Like the coin law, enforcement of this part of the United States Code is primarily focused on destruction designed to affect the value of the money or affect the monetary system as a whole.    Even when the Joker burned a huge pile of money, because it’s fiat money, with no inherent physical value, the Treasury can just print up a bunch of new sawbucks to replace what was destroyed. Part of the Treasury’s job is figuring out what to do with badly damaged money; if Mr. Wagner ever falls on hard times, he could probably carry his art right up to the Treasury’s front doors and nicely ask to have the money converted back into circulating bills.  Hopefully it won’t ever come to that.

(Via)

Burt’s Bucks

If you missed last Friday night’s episode of Raising Hope, you didn’t get to see the trials and tribulations of a fledgling monetary system.

Called “Burt’s Bucks“, S04E02 started out with a revelation:  Burt finds out that he can get paid in other things than money — lobsters for instance!   This gets the Chance’s minds turning: who else would take barter, and how can they make it work for everyone?

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Illegally Destroying Pennies

Just look at this work of art: Robert Wechsler designed many different pieces of art for The New Yorker earlier this year, each made from actual, valuable coins:

Whenever something like this comes out, people develop hives and stutters:  ”WAIT — HE CAN’T DO THAT! That’s destroying money, and that’s illegal!”

18 USC Chapter 17 of the US Code has a section called “Mutilation, Diminution, and Falsification of Coins” — ‘Mutilation’ is about the only thing going on in the art above, and it continues on to say:

Whoever fraudulently alters, defaces, mutilates, impairs, diminishes, falsifies, scales, or lightens any of the coins coined at the mints of the United States…Shall be fined under this title or imprisoned not more than five years, or both.

The word fraudulently appears in both paragraphs, and is the key to this:  the reason this law exists is a layover from the days of coins being made from precious metals.   Like the reeded edges on coins, this is meant to prevent people from altering their coins to be more valuable.  Let’s say you go to the bank and get a thousand dollars in gold coins.  Now, you take each coin and you put it against the bench grinder, taking off a thin layer around the circumference.  You do this to all 50 double-eagles, and then you take them back to the back and deposit them.   Now you’ve got a grand in the bank — and a pile of gold dust underneath your bench grinder.

So, you got $20 for $19.99 worth of gold,  plus it introduces “more” gold into the system, which potentially affects the value of the dollar.

Taking some pennies out of circulation for the purpose of art, or a cute memento of Disneyland, isn’t illegal because you’re not doing to fraudulently alter the value of the coin.  Try melting nickels and pennies for profit, that’s gonna get you a visit from federal agents.  So, intent is all part of the game: make art of pennies and sell it for hundreds, but don’t try to squeeze copper out of your pocket change.   They might feel the same, but the rules view the two very differently.

 Note: I’m not a lawyer, nor am I your lawyer, so this post isn’t a legal defense.  So, don’t print this out to show the judge when somebody arrests you for skirting the law.

Dollars In The Mail

Gary is very poor, and he’d like his dollar back.   It’s an ingenious plan, and Gary has been making up to $90 a month by simply asking for his money back.

Gary’s plan started in 2003 when he had some medical problems and things were actually quite tight.  He’s by no means a rich man today, but Gary still writes his name and address on the dollars he spends.

It’s an interesting plan:  why would a person actually send a dollar to somebody they don’t know?  Gary had used the money to purchase something, and then the dollar moved through the system, whether it made it back to a bank or just got passed between customers as change, eventually it ends up in the pocket of somebody who received it during a purchase, as part of their change.

There are a lot of charities and organizations that rely on this: to one person, the value of the single piece of currency isn’t worth much, so they’re willing to part with it.  Cashiers probably ask you all the time if you want to donate a buck to some medical charity or homeless shelter, that they’ll just add it onto your tab.  Or, you can ’round up’ your purchase to the nearest dollar, with the difference going to charity.  They are banking on the fact that a small amount might not seem like much to part with, and you’ll be likely to agree to donating a few cents.

Those little bits add up: individuals may not see value, but when enough individuals give up their dollar or less it begins to total into a tidy sum.   By being a small amount, it’s easier to get five people to donate a dollar than to get one person to donate five dollars, at least that’s the strategy.  In the end, the contributions of many increase in value, like what shows up in Gary’s mailbox each month.  It may not be a tax-deductible charity, but for the people who mail their money back the loss of that dollar might not mean much, but the legally-blind Gary might reap a greater value en masse in what is returned by relying on the perceived value of one bit of currency.

Amazon Coin

Amazon has officiallly launched its own micropayment currency, called Amazon Coin.  Currently, one ‘coin’ is worth a penny, which makes it somewhat simple for calculating the exchange rate. It is designed for buying digital content for the Kindle, from books to apps, and customers buy or earn Amazon Coin in order to load their account.

With a name like “Amazon Coin”, there’s sure to be comparison to the BitCoin phenomenon, but they’re nothing alike.   Getting an Amazon Coin will be akin to sticking a $10 into the arcade token machine and getting forty brass tokens to stick into the pinball machine.  A Coin is worth one hundredth of a dollar; when the dollar fluctuates, so will the Amazon Coin.  Calling it a ‘coin’ is a bit of a misnomer; in the business world, internet currencies are “tokens” or “coupons”; only governments make coins.  But, whatever symantics Amazon thinks having online coins will avoid scrutiny from governmental entities is their own problem.

So why even call a “Coin” something different?  Why not just call them Amazon Gift Cards – which are already a thing, a way to get your money into Amazon in bulk to use for smaller transactions.  One thing about it being a “Coin” is that it becomes a purchase transaction, rather than a gift card which is increasingly regulated as persistent storage for money.  I’ll bet that there will come a day when app developers and participation in the Mechanical Turk will have the option of being paid in Amazon Coins.  This makes Amazon a barter-world: you do work that earns Amazon real money, and in payment you get tokens to spend at the Amazon store.  Sounds a bit like company scrip, don’t it?  Scrip isn’t horrible, as long as it isn’t misused.  Amazon isn’t dumb enough to require all transactions to be made with the same virtual money system, but if they did they wouldn’t be the first to try and restrict payment options.

Buying Amazon Coins diverges from the gift card model when you try and buy them: the more Amazon Coin you buy, the deeper the discount you get.  Spend $90, get 10,000 tokens (equivalent of $100).  Let’s see a gift card do that – even though there’s no real reason a gift card couldn’t have bonus dollars loaded during the transaction.  You can buy a gift card and then sell it to somebody; there’s a transferability in it.  Amazon Coins, not so much: according to the terms of use, you can’t transfer them or redeem them for cash.  You’re stuck buying products from Amazon – but you can bet that somebody will figure out how to capitailze on the 10% bonus and come out ahead.  But, since this is a retail transaction, Amazon can decide to stop selling coins to somebody if they don’t want to.   All this puts more control in Amazon’s hands, which doesn’t always sit well with people — which is why eBay relaxed their PayPal requirements for sellers.

The other benefit for Amazon, aside from giving free Coins when buying the tokens, they can just hand them out willy-nilly without using coupon codes or other odd redemption processes.  If you own a Kindle Fire, you’re getting $5 in Amazon Coin just for free, to encourage the use of the system.  Go ahead and spend them, but be careful when converting your dollars into Amazon Coin: be aware of what you’re getting for your money, like any other product you might buy.

Pay To The Bear On Demand

I was looking through my server logs, and I can see what people search for on Google to find their way here to this blog.   A while back I made a post talking about what the phrase “will pay to the bearer on demand” means on older money.   Quite a few people come in looking for the exact phrase “will pay to the bear on demand.

Will pay to the bear on demand.

Will pay to THE BEAR on demand.