That is a problem that that is only peripherally associated with banknotes, WmTrevor.

>>...last week I heard commenters on BBC radio complaining because London taxi drivers refuse to accept Scottish pounds<<

It is a universally acknowledged position that dates back to the 1707 Act of Union.

The reality is that neither the English nor the Scots have ever fully accepted the joining of the two countries into a single unit. Both are equally to blame, by the way. I recall vividly the experience of trying to buy a pint of heavy in a Glasgow pub with an "English" banknote. Not an exercise I feel inclined to repeat.

Fortunately for my physical wellbeing, it was back in the days when quite a large amount of beer could be purchased with a relatively small number of coins. The barman obligingly accepted my "English" money in this fashion, an irony that I resisted pointing out to him.

Back to the cabbies, though. It is just as likely these days that the driver's birthplace was far distant from London, or indeed Glasgow, and that his awareness of the Clydesdale Bank's note-issuing capability is scant or non-existent. While this differs from the snarling cockney's "Wotjer call this, guvna" in its provenance, the ultimate effect is the same.

Here's a snippet on the topic from the Guardian:

"The Association of Commercial Banknote Issuers states: 'The term <legal tender> has very little practical meaning as far as ordinary, everyday transactions are concerned, and it has no bearing on the acceptability of authorised banknotes as a means of payment …' Crucially, it adds: 'The acceptability of any means of payment, including banknotes, is essentially a matter for agreement between the parties involved.'"

http://www.guardian.co.uk/money/2012/sep/12/can-i-spend-scottish-money-england

Remember Bannockburn!

"Remember Bannockburn!"

There is now a cream you can get that will provide some relief for that...

Wm Trevor
>>I understand the currency concept of a note having a notional extrinsic value and all that, but … I am still not clear whether they work like an IOU.”

That’s the issue.

We need to distinguish between money in the narrow sense – money in specie – e.g. gold where gold is money, and Commonwealth “banknotes” in Australia, on the one hand; and money substitutes such as cheques, IOUs, promissory notes on the other. The difference is that if the payment by money substitute is disputed, final settlement is made in money in specie.

The effect of Section 9 is to enact that I can’t use Jardine dollars as money, but only as money substitutes.

Pericles is only proving that *exchange* could still take place with Jardine dollars, but then, it could – and does - using cans of diesel too, but that doesn’t make diesel “money”, does it?

>>“Would it be worth or is it not worth the paper it's printed on? How can I be confident, whatever its amount, in case it is worthmore or worthless?

That’s the whole point. No-one would accept my Jardine dollar (if they had any sense). But the Commonwealth’s plastic rubbish is not any more intrinsically valuable. The only reason they are able to give it currency is by making it illegal to use any other preferred money (except that of another State running the same monopolistic racket).

“This is critical to any economic calculation I wish to undertake. If there isn't a lowest common denominated currency how would I know?”

The effect and function of money – any money – is to provide a lowest common denominator value in which such calculation can be made. That’s largely why money comes into existence.

However the very fact that people have to be forced into using fiat money by making it illegal and onerously impractical to use any other money, proves that, if they were free to choose, they’d choose other, better, more “money-like” money – namely, money whose purchasing power wasn’t being constantly eroded - confiscated - by government’s inflationary abuses

Pericles

Then what, according to you, is the point of legal tender laws?

BTW I actually did look into seceding. I had a number of very interesting conversations with a lady who styles herself Princess Paula, of Snake Hill Principality, a little-known micro nation near Mudgee. Contrary to popular opinion, secession is not “illegal” and does not require the permission of the host state. If it did, obviously a lot of states would never have come into existence, not least of which is the USA. And Australia recognises the international human right of self-determination of peoples. It was on that basis that Australia sent troops to East Timor, and supported Kosovo. The international law of self-determination does not stipulate any minimum *number* of people necessary to constitute a state, so theoretically my own property would be enough – it was for Hutt River and Snake Hill.

They key requirement is the recognition of other states. Princess Paula told me that the easiest part was getting the recognition of Heads of State, which she had evidenced by having received Christmas cards addressed to her in her official capacity and royal style from the Queen, Barack Obama, the G-G, and other assorted states.

She said the hardest part is getting it through the thick heads of the clerks at the Mudgee shire council when you tell them you’re not actually part of Australia; and other petty clerks. (You don’t lose your Aussie citizenship by seceding BTW; the State secedes, not the person.) Anyway she said her whole life is consumed with explaining the international law of statehood and secession to minor clerks who lack the ability or inclination to understand.

And I have other reasons for not wanting to devote my life to secession.

However I didn’t address secession because
a) it’s not a “small sacrifice”; and the very fact that one would have to secede in order to have the freedom to choose what money one wants to use, proves my point.
b) Section 9’s provision for other “countries” [translation: States'] currencies only takes the issues about fiat money to one further remove. It doesn’t change the fact that fiat money exists only by virtue of an exercise of power by the State running what is, in effect, a monopolistic and parasitic racket.

To the extent that money is fiat currency, that means the issuing State is forcibly overriding its users’ preferences; substituting inferior money they value less, by threatening to impose a far greater loss of value; when its users would prefer other money, with better monetary qualities (namely, its purchasing power not being constantly inflated away). If this were not so, obviously there would be no need to impose onerous criminal or pragmatic disincentives on preferring the better competition to government’s scamolicious fiat rubbish, would there?

This doesn't actually support your argument, Jardine K. Jardine.

>>Pericles is only proving that *exchange* could still take place with Jardine dollars, but then, it could – and does - using cans of diesel too, but that doesn’t make diesel “money”, does it? <<

In the sense that diesel is a fuel derived from a mineral, and gold is also a mineral, both are equally valid as means of exchange. Or "money", in the vernacular.

Your disdain for "fiat currency" is misplaced - it actually saves us from having to carry lumps of gold, or cans of petrol, around with us, in order to buy a loaf of bread. Which leads us to the nub of your argument, does it not...

>>However the very fact that people have to be forced into using fiat money by making it illegal and onerously impractical to use any other money, proves that, if they were free to choose, they’d choose other, better, more “money-like” money – namely, money whose purchasing power wasn’t being constantly eroded - confiscated - by government’s inflationary abuses<<

I can't see too many people getting excited about choosing a different currency, even if were simple to do so. All that would happen is that we would be constantly bartering, working out how many cans of oil we would need in order to buy a car.

Or did you have something else in mind?