Steamboat Springs A new type of currency is popping up in Steamboat, but it's highly unlikely that stores or banks will accept it.
In the last week, the Steamboat Springs Police Department has fielded reports of tokens called "Liberty Dollars" being offered as payment at Curve Market, City Market, Safeway and Wal-Mart. Representatives from each store told police they were unaware the tokens -- large, round silver pieces bearing a Lady Liberty-style bust and the words "USA" and "Trust in God" on the face, and a burning torch on the reverse -- were not legal tender.
The American Liberty Dollar is legal, but it is not legal tender. It is not endorsed by the Federal Reserve Board so it cannot be used by any government entity or business that deals exclusively in American dollars and cents.
"The issues comes up about once a year, but we don't accept American Liberty Dollars as currency," Wal-Mart corporate communications officer Tom Williams said. "If it has been accepted, it has been accepted in error."
"It says it's redeemable on demand by the bearer for pure silver, but what would I do with pure silver?" Community First National Bank President Paul Clavadetscher said as he perused a Web site maintained by the Liberty Dollar's minter, an organization called NORFED. "We're not going to accept this form of currency. We'll stick with the federal currency."
NORFED, the National Organization for the Repeal of the Federal Reserve Act and the Internal Revenue Code, calls itself a supporter-based nonprofit organization. Its Liberty Dollars -- paper bills and tokens in $1, $5, $10 and $500 denominations -- are distributed by "redemption centers," people who pay NORFED $250 to become distributors of the currency.
According to NORFED's Web site, NORFED keeps $50 for administrative costs, gives $100 to the distributor who sponsors a new redemption center, and sends $100 worth of Liberty Dollars to the new redemption center owner.
The owner can then continue to purchase Liberty Dollars for up to a 40 percent discount, and exchange that currency at face value for legal tender -- Federal Reserve Notes -- with members of the public interested in using what NORFED calls its "inflation-proof currency."
Steamboat Springs has one Liberty Dollar Redemption Center, run by Glenn Tanis. Tanis, who visited Steamboat Springs last winter and plans to return here this summer, was contacted by police after an April 22 incident at Curve Market.
According to police reports, cashier Chris Antonio said a man came into the store and attempted to use the coins but was denied. The man showed Antonio a certificate of authenticity for the coins and said Antonio would "be seeing a lot of them." When Antonio still refused to accept the Liberty Dollars, the man paid with standard Federal Reserve bills.
Later in the same day, a woman used three of the $10 Liberty Dollar tokens to pay for groceries. Although a cashier accepted the coins, Curve employees then called police.
Police Officer Damian Baynes contacted Tanis after determining that he ran the local distribution center.
Tanis "freely admitted that he was using the coins, and that he and his wife were both in Curve Market (April 22)," Baynes wrote in his report. "Tanis stated that what he was doing was totally legal, and that since I saw the Web site, I should know that nothing illegal was going on."
Baynes contacted the Denver office of the U.S. Secret Service, where an officer told him she had received several calls about the Liberty Dollars and, due to public outcry about the tokens, said a public meeting was planned to discuss the issue.
"At this time, no law was being broken since the coins are not represented as U.S. currency," Baynes' report stated, quoting the Secret Service officer. "She went on to say that, through their research, it basically falls upon the merchant for accepting the coins."
According to NORFED's Web site, 38 businesses in the state of Colorado currently accept Liberty Dollars for goods and services; 35 of those businesses are also listed as redemption centers.
Tanis said the Liberty Dollars are increasingly accepted on the Front Range, but they are just beginning to be used in Steamboat. Still, he said, he has been able to use them at local businesses.
"Some businesses are accepting it, sure. We do use it at a lot of the restaurants and some of the stores, but I don't know that I want to advertise for them," Tanis said. "I'm not at the point now where I can say these are the dozen merchants who will trade them."
The benefit of using Liberty Dollars instead of standard currency is that the dollars are backed by silver and gold, rather than debt, so they are inflation proof, Tanis said.
"The motivation is to get value back into currency," he said, noting that there are numerous types of alternative currency in the country, so the concept of the Liberty Dollar is not unusual. "I'd love to get some of the businesses and some of the banks to become redemption centers."
If people exchange their federal currency for Liberty Dollars and then have second thoughts, Tanis said he would happily re-exchange the tokens for cash. NORFED's Web site, however, is less clear about whether the money can be re-exchanged for Federal Reserve notes, simply saying that the money can be exchanged for its worth in silver.
"As soon as the businesses and the banks accept them, it will be a way of life," Glenn Tanis' wife, Pat Tanis, added.
That way of life may be a long way off. Representatives from the local City Market and Safeway groceries said that while people in their stores may have seen the Liberty Dollars and purchased them for personal enjoyment, the money is not being accepted as payment for goods.
"They were going to use them here, but I didn't take them because I'd never seen them before," Safeway head clerk Barbara Pauley said. "I know somebody standing in line behind her bought them, though."