The purpose of government is to protect individual rights. The purpose of a civil court system is to adjudicate disputes on the basis of the individual rights of each participant, enforcing the terms of the contract whenever possible. If it is not possible, a judge and/or jury can order an equitable settlement that substitutes an alternative value for the value promised in the contract.

None of the above requires the establishment or enforcement of “legal tender” laws. Your article lays out the historical background of money, but does not make the case that defining and creating legal tender is a necessary or proper function of government.

Here is your key paragraph: “According to Ayn Rand’s Objectivism, and in line with much else on the libertarian right wing of American politics, the proper functions of government include operating courts of law. It is for the courts that the legislature defines “legal tender.” If the legislature did not define legal tender, there would be no way to know when a debt has been discharged, or when payment has been made.”

I don’t think that last sentence can be supported. Any serious contract that creates a debt will include the goods and/or services that, if and when delivered, will constitute payment and discharge of that debt. Any question before the court will then become a question of fact: did the debtor fulfill his obligation to the creditor, as specified in the contract? The concept of legal tender doesn’t enter the picture – whatever the debtor pays the creditor is “legal tender”, provided that the medium of payment is one specified in the contract.

I take away from this that Mike doesn't like DB.

The link doesn't persuade me. The arguments do not follow a logical flow. At one point the arguement is presented from another work that money did not evolve from barter. It evolved from gift exchange as a measure of credit. Ok, maybe, but since money evolved independently in many different places and times, I doubt each case is credit and not trade. Separately, it is irrelevant to the assertion.

I do not object to the government offering legal tender. It is convenient, like having a common language, or common screw sizes. I do object to it being manipulated by the government. Clearly other alternatives should and do exist. If the government did not offer a liquid means of exchange, another agent(s) would be the windows, OSX and Linux of exchange, and it would be fine.

Precisely how would a private means of liquid exchange cause a problem, in reality or to objectivism? Bitcoin works.

"All governments create a plethora of medals, medallions, certificates, promises, and warrants that may be valuable, negotiable, even fungible, but are not recognized in courts of law as legal tender. "

Really? Show me how that follows from Natural Rights. The only thing that you give up when in a proper government is delayed retaliatory force according to Rand and Locke. When the government forces you to accept payment in legal tender, which you are forced to take in settlement of lawsuit.

I think the real question is whether or not government can or should be the ultimate arbiter of economic contracts. I agree that all contracts by their very nature require three parties: the two contracting parties and a third appeal/enforcement party. Because government usually enforces social laws, many have also chosen to delegate to the government the enforcement of economic contracts as well whether as a matter of efficiency or as a matter of societal will. It is also convenient because in unusual cases an economic contract dispute can turn into a criminal matter. For these reasons, I think there is a substantial argument to be made for governmental involvement in contract dispute resolution.

That being said, the Founders of the United States initially implemented no central currency except for governmental purposes. They were pretty much constrained by the needs to fund the startup of the country to take on debt and pledge against that debt through the creation of some form of legal tender, but that tender was to fund government operations only - it wasn't used by the general populace, who had their own private banking system. That private system worked well and prevailed for nearly 150 years until the formation of the Federal Reserve. Yes, there were certainly problems with individual banks and they would rise and fail just like many businesses, but I see that as a positive thing because it encourages competition. It also made it impossible for the government to borrow too much because they couldn't control their own debt. All that changed in 1918. Now we have a system where the government controls the money supply and has the power to devalue money simply by spending money and then mandating the rates of interest on that borrowed money - not to mention their profligate printing of new notes.

If one compares the outcomes of a central banking system with a diversified, private banking system, I think it is pretty easy to see that if one is going to advocate for a central banking system, one must also mandate a standard for its backing (i.e. precious metals) or the government will destroy its own people through currency manipulation and inflation. Those very same checks and balances are inherent in a private banking system.

aside from everything previously said

Legal tender could be said to be ANYTHING a group of people have decided to accept as a form of currency for translations. That said shells, stones, petrified feces can all be legal tender if accepted as such by a body of people and/or its representative government (including the judiciary).

"Once again, this time on the Galt’s Gulch Online message board, my conservative comrades displayed a disappointing though predictable ignorance about money. For people who claim to honor the bourgeois virtues of trade and commerce, they collectively guard a treasury of incomplete, incorrect, erroneous, and falsified assertions. In truth, objective investigation demonstrates that the government has the right, the need, and the obligation to define and create legal tender." Mike Marotta.

Your Insults and assumptions are of no use in examining your question What is legal tender?

In your ramble you state " for tens of thousands of years including two ice ages from about
35,000 YA to 10,000 YA , strangers became friends by exchanging gifts" (pure speculation and of no value to the Question)

"In fact, very little trade is “cash on the barrel head.” It never has been." This is no fact.

Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

yet the source of common law has come from the private courts of England...as govt law and courts of that time were corrupt and unjust...

This is an informative article as expected from MM.
There is quite a lot I do not know about money but I am unconvinced by the argument for the need for gov to define legal tender.

When is a debt discharged?
When the terms of the contract have been satisfied. What else?
Should satisfaction be in dispute, then the gov via the courts make a ruling.
The concept of legal tender is not needed to answer the question.

Now the article mentions the case of a law ordering a quantity of silver to be paid to the victim of a defined assault.
Yes, a legit role for government in dissuading and punishing crime.
This does not create legal tender with silver, it only sets some numerical equivalence between the crime and the redress.

CRYPTOCURRENCY: I am surprised that no one has yet mentioned #CryptoCurrency and the #BLOCKCHAIN !

US Silver Dollar 1794-1804 did not say "One Dollar" until 1836.
See what they looked like here:
http://www.coinfacts.com/silver_dolla...

The standard coin of the realm, the basis for all US currency was the Gold Eagle. Again, from 1795 to 1804 - and not until 1834 - they did not have any mark of value on them.
See examples here:
http://www.coinfacts.com/eagles/turba...

How are they legally different from the medals issued by Congress which also have devices and emblems and no mark of value?
https://en.wikipedia.org/wiki/List_of...

The answer is that Congress declared the Eagle and Dollar (and their fractions) to be legal tender.

A point perhaps not made strongly enough in the original post is that the government - like any economic entity - creates many kinds of "coins" and "paper obligations." The OP showed the large gold medal awarded to Charles Lindbergh, a Purple Heart, and a deed for land. The OP image is of a Nobel Prize, which is funded by a foundation and awarded by the King of Sweden. They are not money. As valuable as they are, they are not legal tender.

Governments define "legal tender" in order to differentiate their circulating monetary media from all of the similar objects that they create.

Once the government defines legal tender in this way, it become the definition that the courts look to.

You can avoid government courts with arbitration. In fact, it is a complaint from some progressives that many contracts (credit cards, automobile loans) include clauses that take away your right to a court trial and allow only arbitration.

But in government courts, the government definitions are the ones operative.

Article I, Section 8 of the Constitution grants Congress the power “To coin Money,” but nowhere is the word “money” defined in the Constitution. and the federal reserve is NOT PART OF THE FEDERAL GOVERNMENT. Sect. 10. No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make any thing but gold and silver coin a tender in payment of debts; DOE GOLD AND SILVER PERIOD , FULL STOP!!