Words are the tokens current and accepted for conceits as moneys are for values.
Francis Bacon (1561–1626), The Advancement of Learning (1605)
The troublesome question, ‘what is money?’ has so frequently engaged the minds of economists that a lawyer might hesitate to join in the attempt to solve it. Yet the true answer must, if possible, be determined. For ‘money answers everything’.1 Money is a fundamental notion, not only in the economic life of mankind,2 but also in many spheres of law. It therefore seems appropriate for the lawyer to seek a definition of money, given the frequent use which is made both of the term itself and its many derivatives, including debt, damages, payment, price, capital, interest, tax, pecuniary legacy, and doubtless many others. All of this terminology may have further consequences; for example, only an obligation expressed in money can involve any obligation of payment or repayment, or carry any right to interest. Money is a term so frequently used and of such importance that one is apt to overlook its inherent difficulties, and to forget that the multitude of its functions necessarily connotes a multitude of meanings in different legal situations.3 The universality of money and monetary systems no doubt also contributes to a certain complacency in seeking to identify a working definition.4
The following examples may provide an initial outline of some of the difficulties caused by this elusive term:
(a) If a contract is to fall within the scope of the Sale of Goods Act 1979 then it must involve a transfer of goods ‘to the buyer for a money consideration, called the price’.5 If the consideration moving from the buyer is not ‘money’, then the contract is one of barter, which in many respects differs from a contract for the sale of goods.6
(b) Likewise, a contract for the transfer of land only involves the ‘sale’ of that if the buyer is to pay a consideration in money.7
(c) For the purposes of the Bills of Exchange Act 1882, a bill of exchange must require the drawee to pay ‘a sum certain in money’.8 An instrument requiring the transfer of something other than ‘money’ is thus not a negotiable instrument for the purposes of that Act.
(d) In the United Kingdom, the taking of deposits in the course of a deposit-taking business is prohibited, in the absence of appropriate authorization. For these purposes, a ‘deposit’ is a ‘sum of money’ paid on terms that it will be repaid at a later date, whether with or without interest.9 Clearly, in determining whether authorization is required (or an offence has been committed), it is important to establish the precise meaning of ‘money’ in this context.
(e) The terms of a given statute may create an obligation to pay ‘money’ and it may be necessary to decide in what manner the obligation is to be performed. Thus, where a statute required payment ‘in current coin of the realm’ it was held that only payment in physical cash would suffice—payment in goods or in other manner would not discharge the obligation.10
The instances just noted suggest a narrow and technical approach to the meaning of ‘money’, perhaps because each of them has a specific and distinct statutory derivation. But a much broader approach is adopted in other cases. For example:
(a) The action for ‘money had and received’ can be brought when the subject matter is not money itself but some form of security therefor or other equivalent.11
(b) Whilst an individual may claim to have ‘money in the bank’, it is clear that he no longer owns physical notes and coins which he handed over to the bank, for property in those items will have passed to the bank itself.12 Instead, he has become a creditor who can recover his debt by action. He does not ‘own’ anything at the bank, nor is the bank a trustee of the money deposited with it.13 Yet, as will be seen, the credit balance standing at his disposal may be used as a means of discharging financial obligations, and thus may be regarded as ‘money’ to that extent.
(c) Equally, for the purposes of the equitable doctrine of tracing, the term, ‘money’ is by no means confined to physical cash—it extends to all assets capable of being identified in or disentangled from a mixed fund.14
(d) In the context of a will, the term ‘money’ will generally carry a rather broader meaning. At any rate, it has no fixed meaning, and it is the duty of the court to ascertain the testator’s intention upon a reading of the document as a whole. Thus, ‘money’ could include the whole of the personal estate and a reference to ‘all my money’ could in some cases extend to the testator’s entire real and personal estate.15
These few examples have, however, merely reinforced the original assertion, namely that ‘money’ has a variety of different meanings in different situations, and individual cases require separate scrutiny; no hard and fast rule exists in this area. As a result, it becomes tempting to ask at this point whether the search for a general definition of money serves any useful purpose. As with so many legal expressions, all may depend upon the language which accompanies the term and the circumstances under which it is used. That the ease of recognition may be contrasted with the difficulty of definition is emphasized by the evidence of a London accountant given to the Committee on the Resumption of Cash Payments in 1819. When asked to explain a ‘pound’, he said ‘I find it difficult to explain it, but every gentleman in England knows it … It is something which has existed in this country for eight hundred years—three hundred years before the introduction of gold’.16 It may be objected that this evidence is now of some antiquity. Yet even today, many would find it difficult to provide a more satisfactory response. Equally, differences of emphasis may occur depending upon the location in which the question arises; for example, in less developed societies, a definition of ‘money’ may adhere more closely to traditional interpretations associated with banknotes and coins, whilst a broader approach (perhaps comprising government securities, bank money, and other instruments) may have to be adopted in the context of more advanced economies.17 Further, as will be seen at a later stage, an obligation expressed in money will generally be discharged provided that the creditor receives the ‘commercial equivalent’ of cash or money, and this formulation by itself tends to suggest that a precise definition of money will be both elusive and perhaps even unhelpful.18 Finally Professor Goode has asserted that ‘much of the debate on what constitutes money in law is rather sterile and has few implications for the rights of parties to commercial transactions, where payment by bank transfer is the almost universal method of settlement’;19 in his view, the notion of payment is a far more important legal concept. Given the work upon which he is engaged, the present writer has searched diligently for grounds to disagree with this view; but at least in the context of commercial and financial transactions, it is necessary to admit that the notion of payment is of more practical importance. As will be seen, there is much case law which deals directly with the concept of payment, but there have been very few occasions on which the court has been directly concerned with the meaning of money or has attempted to address that subject in a meaningful way. Can one therefore conclude that a generally applicable definition of ‘money’ would have to be so broadly written that it would serve no real purpose and that, in any event, a satisfactory definition of ‘payment’ would be far more useful in practical terms? Alternatively, is it preferable to avoid a definition of ‘money’ altogether, and simply deal with practical problems on a case-by-case basis?
Tempting though this approach may be, it is plainly inappropriate simply to abandon the search, at least in the context of a book of this kind. One cannot complete a work on the subject of money without at least attempting a definition, even if both the discussion and the conclusion are in some respects inconclusive or unrewarding. It must also be recognized that the concept of money does not only arise for consideration in commercial transactions. For example, many references will be made to the sovereignty which a State enjoys over its monetary system;20 again, it would be odd if that discussion were to proceed without any attempt at a definition of ‘money’.
It has already been noted that money is a fundamental notion within the economic life and activities of mankind. It seems to follow that an attempt to formulate a legal definition of ‘money’ cannot proceed in isolation, but must take at least some account of economic theory. In addition, as will be seen, technological and other developments over recent years do have consequences for an attempt to formulate a legal definition of ‘money’—as the available means of payment multiply, the meaning of ‘money’ must correspondingly broaden.
As noted above, a legal definition of ‘money’ requires at least some consideration of its economic functions. Without attempting a detailed review of a complex area, it may be noted that economists have tended to define money by reference to some of its functions, namely:21
(a) as a medium of exchange;22
(b) as a measure of value or as a standard for contractual obligations;23
(c) as a store of value or wealth;24 and
(d) as a unit of account.25
The emphasis placed by economists on each aspect of this definition has tended to vary at different times26 but it seems that the role of money as a medium of exchange is now regarded as its key feature.27 As will be seen, the proposed legal definition of ‘money’ reflects some of these economic considerations. Nevertheless, it is necessary to proceed with caution in this area because, as noted earlier, ‘money’ can have very different meanings in different contexts. The law must provide a framework within which money has a role and its use has specified legal consequences. It is for this reason that bank deposits may be ‘money’ to the economist,28 but they have not always been regarded as such by the lawyer, who may see them as a debt or an obligation on the part of the bank to repay money.29 It is, of course, unsurprising that economists and lawyers should differ in their approaches to questions of this kind, for their areas of concern and objectives are also entirely different. The economist may be concerned with such matters as monetary policy, exchange rate policy,30 and the supply and soundness of money within an economic area as a whole. Lawyers, on the other hand, tend to be more concerned with the protection of the purely private rights of contracting parties and the discharge of monetary obligations.31 The lack of common objective between the two disciplines inevitably results in the lack of a common approach or definition.32 In other words, the lawyer must take account of the functional and economic purposes of money, but he will not alight upon a legal definition which is wholly derived from economic considerations. On the contrary, he must necessarily focus upon money as a means of performance of contractual or other legally enforceable obligations.
So where does the lawyer begin his search for a definition of ‘money’? The following starting points are suggested:
(a) First of all, the role of money as a medium of exchange has already been emphasized. If a country’s system of trade and commerce is to be based on money as a means of exchange, then the law must buttress that position and allow for the assured discharge of monetary debts by payment in that medium. Thus, the law must require that creditors accept payment through that medium—in other words, the creditor must accept payment in legal tender.33
(b) Equally, it has been shown that money functions as a unit of account. Money could only discharge this function if the unit of account is uniform throughout the monetary area concerned. The required uniformity can only be achieved with any degree of permanence if the unit of account is prescribed by law. The essential features of money as a medium of exchange and as a unit of account thus require the underpinning of the law, or the State.
(c) The requirement that money should act as a ‘store of value’ is perhaps less easily reflected in a purely legal definition of ‘money’. And yet it may be possible (or even necessary) to accommodate this aspect in various ways. If money is to act as a store of value, then that value must be identified in a manner which the law can recognize and support. This, again leads to the conclusion that money must, with the support of the law, be denominated or expressed by reference to an identified unit of account, which effectively preserves the nominal value of the medium of payment.34
With these initial thoughts in mind, it is now appropriate to consider the formulations attempted in decided cases and other legal sources.
Blackstone35 defined money as ‘the medium of commerce … a universal medium, or common standard, by comparison with which the value of all merchandise may be ascertained, or it is a sign which represents the respective values of all commodities’. Perhaps the best known judicial definition in England is that used in Moss v Hancock36—money is:
that which passes freely from hand to hand throughout the community in final discharge of debts and full payment for commodities, being accepted equally without reference to the character or credit of the person who offers it and without the intention of the person who receives it to consume it or apply it to any other use than in turn to tender it to others in discharge of debts or payment for commodities.
The Supreme Court of Canada has, in some respects, adopted an even broader definition, describing money as ‘any medium which, by practice, fulfils the function of money which everyone will accept in payment of a debt is money in the ordinary sense of the words, even though it may not be legal tender’.37
These definitions have not strayed very far from the economists’ view of money; they tend to adopt a purely functional approach. Moreover, they do not emphasize the legal framework within which money must exist if it is to be used as a final and complete means of discharging financial obligations; indeed, the Canadian Supreme Court appears to have taken the view that ‘money’ could exist without any such legal support. By contrast, however, the definitions employed in the Uniform Commercial Code of the United States describe money as ‘a medium of exchange authorised or adopted by a domestic or foreign government as part of its currency’. This language clearly indicates that the authority of the State is a necessary ingredient of the definition of money.38 The point is reinforced by Article 1 (section 8, paragraph 5) of the Constitution, which reserves to the Federal Government the exclusive right to issue money. Moreover, even some economic commentaries have suggested that money must exist within a legally defined framework, or else it is not money at all—Keynes noted that ‘money is simply that which the State declares from time to time to be a good discharge of money contracts’.39 It seems fair to note that more modern definitions of ‘money’ have tended to adopt a broader approach by including not only bank deposits but even government debt securities, which can readily be converted into cash. Thus Article XIX(d) of the Articles of Agreement of the International Monetary Fund states that the term ‘currency … includes without limitation, coins, paper money, bank balances, bank acceptances and government obligations issued with a maturity not exceeding twelve months’.40
It must also be said that monetary sovereignty is one of the attributes of a modern State under international law.41 The right to regulate the monetary system resides with the State; and the obligation of other States to recognize that monetary system can only apply where the relevant money has been created under the legal authority of the first State. Now, the notion of State sovereignty implies the right to legislate in specific fields falling within the ascertained scope of that sovereignty.42 Considerations of this kind suggest that, whilst a legal definition of money must necessarily contain or reflect at least some of the elements of the functional approach (and, hence, the realities of commercial and economic life), it must also include an element which reflects the international law requirement just noted—namely that ‘money’ must exist within some form of legal framework, because it reflects an exercise of sovereignty by the State in question.
It is pertinent to note that the State’s monopoly over the issue of money is occasionally challenged, not merely through the mundane medium of counterfeit production, but on more technical grounds. A recent example is offered by the prosecution of a Mr Bernarnd von NotHaus in a Federal Court in North Carolina.43 Mr von NotHaus had promoted the use of the so-called ‘Liberty Dollar’ as a private currency for the use in the United States. The paper currency was said to be backed by, and exchangeable for, gold and silver held in storage by the issuing company. This was apparently intended to provide a counterweight to the national unit, which was said to have lost the confidence of the public. But, having used the symbol ‘$’ and labelled his currency ‘dollars’ (albeit ‘liberty dollars’) and used the expression ‘Trust in God’, it is perhaps unsurprising that a jury convicted him of a counterfeiting offence.44
Yet concerns about the state of the national currency are not confined to minority individuals or organizations. In March 2011, the Senate of the State of Utah introduced legislation—the Substitute Currency Amendments Bill—designed to provide for the use of gold and silver coins issued by the Federal Government as legal tender with the State’s borders.45 The legislation may be no more than symbolic, since the market value of gold coins would inevitably be significantly greater than the value which they could carry in terms of legal tender. Various other States, including Virginia, have considered the adoption of similar legislation. However, the political objective is to voice concern about the state of national currency and to send that message to the Federal Government. The monetary law implications are unlikely to be significant in practice.
With these considerations in mind, it becomes attractive to adopt a functional approach—money is that which serves as a means of exchange—subject to the crucial proviso that its functions must have the formal and mandatory backing of the domestic legal system in the State or area in which it circulates. For anything which is treated as ‘money’ purely in consequence of local custom or the consent of the parties does not represent or reflect an exercise of monetary sovereignty by the State concerned, and thus cannot be considered as ‘money’ in a legal sense.
It is necessary to conclude that a definition of ‘money’ in law must recognize both the functions of money and the legal framework within which it must be created. Against that background, it is possible to turn to theories of money which have previously been formulated.
The role of the State in the establishment of the monetary system and in the creation of physical money led Dr Mann to conclude46 that, in law, the quality of money is to be attributed to all chattels that are:
(a) issued under the authority of the law in force within the State of issue;
(b) under the terms of that law, denominated by reference to a unit of account; and
(c) under the terms of that law, to serve as the universal means of exchange in the State of issue.
It is apparent that the definition relies heavily upon the role of the State in establishing a monetary system and in authorizing the issue of notes and coins. It is thus necessary at the outset to review this approach in broad terms, and to consider two competing theories. It will then be appropriate to return to Dr Mann’s definition in a little more detail.47
Under the definition just outlined, money must be issued under the central authority of the State concerned. This approach reflects the State (or Chartalist) theory of money developed by G F Knapp,48 who opined that only chattels issued by the legal authority of the State could acquire the character of ‘money’, and that the value to be attributed thereto is fixed by law, rather than by reference to the value of the materials employed in the process of production. Dr Mann supported this approach partly in the light of the universal acceptance of the principle of nominalism.49 The State theory of money is the necessary consequence of the sovereign power or the monopoly over currency which States have assumed over a long period and which is almost invariably established by modern constitutional law.50 It cannot be open to doubt that the United Kingdom currently retains and exercises sovereignty in monetary matters;51 accordingly, the State theory of money may be regarded as a part of English law.52 The right of coinage had for many centuries been recognized as a part of the Crown’s prerogative, and was thus exercisable without parliamentary or other sanction.53 Whilst the right to issue coinage has now been placed on a statutory basis, the exclusivity of the privilege to issue coins has been specifically preserved.54 It should be added that the introduction of the euro does not detract from the State theory of money; on the contrary, it is an illustration of that theory, for the creation of the single currency is directly traceable to an exercise of monetary sovereignty by the individual participating Member States.55 The State theory thus does not prevent a group of States from introducing a common currency. Likewise, it does not prevent a single State from introducing more than one currency. Examples of the latter phenomenon tend to have something of a historical flavour, but China affords a modern example; the currency of mainland China is the yuan, but Hong Kong continues to issue the Hong Kong dollar, which is an entirely independent monetary unit.56
It should be appreciated that the law relating to banknotes, or paper money, developed in a rather different way, for their history is connected with that of bills of exchange and banking.57 Banknotes in the modern sense were not always distinguishable from other negotiable instruments, although even in an early case, it had been held that banknotes would usually be regarded as ‘money’ in a legal context.58 When the Bank of England was established in 1694,59 it was not a central bank of issue in the modern sense. The legislation did not even state whether the Bank was intended to issue notes at all, still less did it seek to confer upon it an exclusive, note-issuing monopoly which would have been consistent with the State theory of money.60 Nevertheless, the Bank began to act as a bank of issue and circulation immediately after its incorporation. But in addition, many country banks continued to issue notes without government control.
As a result, the growth of money in circulation was not subject to any effective form of regulation and the quality of money could clearly be affected by the solvency of the particular issuer.61 This state of affairs in turn became the chief topic of discussion between the Currency and Banking Schools during the early part of the nineteenth century. The former school considered that the term ‘money’ should be ascribed only to notes and coin, and that the issue of money should be undertaken directly by the Government or under its control.62 As a result, the creation of money would rest in official hands, whilst the distribution of money would occur through banks and through private transactions.63 This approach was endorsed by the Bank Charter Act 1844 which established the modern position. Subject to certain transitional arrangements, the privilege of issuing notes constituting ‘money’ and enjoying the status of legal tender in England and Wales was made exclusive to the Bank of England.64
The Bank Charter Act appears rapidly to have pushed the English courts towards the State theory of money. Less than twenty years later, the court in Emperor of Austria v Day said that the right of a foreign government to issue notes as paper money followed from powers vested in the State itself, as a result of which the court restrained the defendant from printing notes which claimed to be legal tender in Hungary, even though they bore no resemblance to the official currency.65 The same theory was also applied in twentieth-century cases decided by the House of Lords and the Privy Council, and to which it will be necessary to return at a later point.66
If the State theory of money appears to have gathered early momentum in England, matters took a slightly more tortuous course in the United States of America. The Constitution67 confers upon Congress the power ‘to coin money, regulate the value thereof, and of foreign coin’. Thus, the Supreme Court has noted that ‘to determine what shall be lawful money and a legal tender is in its nature and of necessity a governmental power. It is in all countries exercised by the governments’.68 It followed that Congress had the power (and, it may be added, the sole power) ‘to issue obligations of the United States in such form, and to impress upon them such qualities as money … as accord with the usage of sovereign governments. The power … was a power universally understood to belong to sovereignty’.69 In view of these considerations, the power of Congress to ‘coin’ money was held to extend to the issue of greenbacks, or paper money.70 Under these circumstances, it will be appreciated that the circulation of any other chattels claimed to have the quality of money would be inconsistent with the established monetary prerogative of the Federal Government71 The first ‘greenbacks’ were issued as part of the Government’s efforts to finance the Civil War; for this purpose, Abraham Lincoln signed the first Legal Tender Act in February 1862. The Act authorized the issue of notes which were ‘lawful money and legal tender in payment of all debts, public and private within the United States’. Until that time, the issue of banknotes had essentially been a function of private issuers.72 If the Federal Government had now established the exclusive right to issue notes, then it was necessary to decide whether action by the individual States might infringe the monopoly. By Article 1, section 10 of the Constitution, individual States could not ‘coin money, emit Bills of Credit, make any Thing but gold and silver Coin a Tender in Payment of Debts’. The Court in Craig v Missouri73 held that ‘the emission of any paper medium by a State government for the purpose of common circulation’ would be caught by the prohibition. But a few years later, paper ‘money’ issued by a State-owned banking corporation was held to fall outside the prohibition—it was not issued by the State and on the faith of the State.74 Later cases held that notes and coupons issued by State banks—which were essentially departments of State governments—were not ‘bills of credit’ for these purposes even though they could be accepted in payment of taxes and other sums owing to the State.75 Of course, the exclusive right to issue banknotes enjoying legal tender status is now vested in the Federal Reserve, although the notes represent obligations of the Federal Government, rather than the Federal Reserve.76 In a series of cases, the Supreme Court further held that the power to determine the value or convertibility of legal tender77 likewise rested with the State. The State theory of money may thus be regarded as a part of the law of that country.78
If one accepts the State theory of money as formulated by Dr Mann, then it becomes necessary to consider its practical consequences. Two points should be made in this context.
First of all, circulating media of exchange in law only constitute ‘money’ if (a) they are created by or with the supreme legislative authority of the State, and (b) the relevant law confers upon those circulating media a nominal value which is independent of the intrinsic value of the paper/metal from which they are made, of their actual purchasing power, and of their external value measured against other currencies. It follows that gift vouchers, tokens, and similar items—even though exchangeable against the provision of goods or services by their issuers—do not constitute ‘money’ because they lack the support of the supreme legislative authority within the State concerned. For the same reason, promissory notes issued by a commercial or industrial company are not ‘money’, even if they were to circulate and to be accepted as such throughout the community. Likewise, where a statute, without further definition, refers to ‘gold coin’, it must be taken to refer to coin issued under the authority of the State and not to some privately produced replica.79
A currency issued by an insurgent authority and forcibly imposed upon the local population in the course of a civil war is to be regarded as lawful money in the geographical area concerned, because the insurgents exercise de facto supreme authority in governmental matters, which makes obedience to their authority not only a necessity but a positive duty. This position is established by a number of decisions of the Supreme Court of the United States,80 which held, amongst other things, that a contract could not be rendered void or unenforceable on public policy grounds merely because the consideration had been expressed in the Confederate dollar. In the present context, this approach has the merit of consistency with the State theory of money, as formulated earlier. It is, however, not entirely clear that the English courts would adopt a similar approach; on occasion, they have refused to recognize the legislative or official acts of an insurgent government.81 However, the English courts have indicated a willingness to apply laws made by unrecognized governments to the extent to which these deal with private rights and there are no countervailing considerations of public policy.82 It is suggested that the English courts could, on this basis, recognize such a monetary law under appropriate circumstances, even though the relevant State or government is not formally recognized by the United Kingdom.
Similar questions may arise where the conflict is of an international nature, as opposed to a civil war. Notes issued and made legal tender by a belligerent occupant in the course of an international war are ‘money’ because they are imposed by the body which de facto (and even if only temporarily) exercises supreme authority and is responsible for public order and administration.83 As a consequence, a debt contracted in the national currency prior to the onset of hostilities can subsequently be discharged in the occupation currency by payment of so many occupation currency notes as are—under the occupant’s legal tender legislation—equivalent to the nominal value of the debt.84
The second consequence of the State theory is that, in law, money cannot lose its character except by virtue of formal demonetization—that is to say, the introduction of a subsequent law which deprives the earlier money of its character as such.85 The statement just made implies that money cannot lose its character by custom, or by any other means. As a matter of law, it is suggested that this proposition remains accurate, even though history supplies many examples of the operation of Gresham’s Law, where bad money drove good money out of circulation.86 Gresham’s Law has usually been applied to coins which were perceived to have a nominal value below the intrinsic value of their metallic (gold or silver) content. Inevitably, holders of the undervalued coins would tend to withhold them. But they retained their status as ‘money’, for they were still legal tender for the number of units of account by reference to which they were denominated; and coins do not lose their legal tender status merely because some of the holders elect to save, rather than spend. If a coin—such as a gold sovereign87—can be sold for a price in excess of its nominal value, then it is being sold in the character of a commodity, and not as money.88 Apart from such ‘commodity’ cases, however, the courts will apply their national legal tender laws and will ignore any premium which the market may happen to place on particular coins.89 Equally, the courts will generally ignore the fact that a long-term monetary obligation may lose its effective value over a period. Thus, the annual rental of three shillings a year payable under a 1,000-year lease from 1607, now has very little value, but it remains a money obligation which can be discharged at its nominal value.90 These rules flow in part from the principle of nominalism, which will be considered at a later stage.91
It may be added that States have occasionally minted gold coins without ascribing to them a specific value in terms of the local monetary unit—the South African Krugerrand is a case in point. Whilst it was (indirectly) described as legal tender, no specific monetary value was placed upon it.92 It follows that such coins are not ‘money’, and must be regarded as a commodity. This aspect of definition can be important and is considered later.93
Although it is not adopted as the key starting point in the present work,94 reference must be made to the ‘Societary theory of money’ which holds that it is the usage of commercial life or the confidence of the people which has the power to create or recognize ‘money’. In other words, it is the attitude of society—rather than the State itself—which is relevant in identifying money. Now, to the economist, there is no doubt that public acceptance and confidence are important criteria within the definition of money; people will enter into contracts in terms of money and accept payment in it, because they are confident that other members of the same society will behave in like manner.95 This, in turn, leads to the view that anything is money if it functions as such; but, taken by itself, this definition is unsatisfactory in seeking to define the attributes of money from a legal perspective. As demonstrated earlier in this chapter, a purely functional approach to money cannot of itself provide an adequate basis for a legal definition; the Societary theory cannot be reconciled with the undeniable monopoly of modern States over their currencies96 and the effective recognition of that monopoly by international law. Whether in situations of crisis or otherwise, money cannot be created—or lose its character—purely by the will of the community;97 legal sanction is required for that purpose. The recognition of Confederate notes as ‘money’ by the US Supreme Court does not lend support to the Societary theory; on the contrary, the Court recognized that the acts of the insurgent Government within its territory could not be questioned, for it represented the de facto supreme authority at that time.98