31 U.S.C. § 5119 — Redemption and cancellation of currency

Page 408 TITLE 31—MONEY AND FINANCE § 5119 (3) Except when consent is not withdrawn under this subsection, an amount appropriated for payment on public debt obligations and for United States coins and currency may be ex- pended only dollar for dollar. (d)(1) In this subsection, ‘‘obligation’’ means any obligation (except United States currency) payable in United States money. (2) An obligation issued containing a gold clause or governed by a gold clause is discharged on payment (dollar for dollar) in United States coin or currency that is legal tender at the time of payment. This paragraph does not apply to an obligation issued after October 27, 1977. (Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 985; Pub. L. 99–185, § 2(d), Dec. 17, 1985, 99 Stat. 1178; Pub. L. 104–208, div. A, title II, § 2609, Sept. 30, 1996, 110 Stat. 3009–475; Pub. L. 105–61, title VI, § 641, Oct. 10, 1997, 111 Stat. 1318.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 5118(a) ..... 31:773d. Aug. 27, 1935, ch. 780, 49 Stat. 938. 5118(b) ..... 31:315b. Jan. 30, 1934, ch. 6, § 5, 48 Stat. 340. 31:773a. 5118(c)(1), (2). 31:773b. 5118(c)(3) 31:773c. 5118(d) ..... 31:463. June 5, 1933, ch. 48, § 1, 48 Stat. 113. 31:463(note). Oct. 28, 1977, Pub. L. 95–147, § 4(c), 91 Stat. 1229. In subsection (a), before clause (1), the words ‘‘the phrase’’ are omitted as surplus. In clause (1), the words ‘‘declared to be against public policy by section 463 of this title’’ are omitted as surplus. Clause (2) is sub- stituted for 31:773d(words after semicolon) for consist- ency in the revised title and to eliminate unnecessary words. In subsection (b), the words ‘‘after January 30, 1934’’ in 31:315b are omitted as executed. The words ‘‘that may be lawfully held’’ are substituted for ‘‘which may be lawfully acquired and are legal tender for public and private debts’’ in 31:773a for consistency in the sub- section and to eliminate unnecessary words. The words ‘‘and that the owners of the gold clause securities of the United States shall be, at their election, entitled to receive immediate payment of the stated dollar amount thereof with interest to the date of payment or to prior maturity or to prior redemption date, which- ever is earlier’’ in section 1 of the Act of August 27, 1935 (ch. 780, 49 Stat. 938), are omitted as expired. The words ‘‘make the exchange’’ are substituted for ‘‘make such exchanges and payments upon presentation hereunder’’ to eliminate unnecessary words. The words ‘‘No gold shall after January 30, 1934, be coined’’ in 31:315b are omitted because of section 5112 of the revised title. The text of 31:315b(proviso) is omitted as unnecessary be- cause of the restatement. The text of 31:315b(last sen- tence) is omitted as executed. In subsection (c)(1), before clause (A), the word ‘‘Gov- ernment’’ is substituted for ‘‘United States’’ for con- sistency in the revised title and with other titles of the United States Code. The words ‘‘to anyone’’ are added for clarity. The words ‘‘whether by way of suit, coun- terclaim, set-off, recoupment, or other affirmative ac- tion or defense in its own name or in the name of’’ are omitted as surplus. The word ‘‘employees’’ is added for consistency in the revised title and with other titles of the Code. The word ‘‘instrumentalities’’ is omitted as unnecessary because of section 101 of the revised title. The word ‘‘claim’’ is substituted for ‘‘right, privilege, or power’’ to eliminate unnecessary words and for con- sistency in the revised title and with other titles of the Code. The words ‘‘in any proceeding of any nature whatsoever’’ are omitted as surplus. In clause (C), the words ‘‘or demand’’ are omitted as surplus. In subsection (c)(2), the words ‘‘any suit commenced prior to August 27, 1935, or which may be commenced by January 1, 1936’’ are omitted as executed. The words ‘‘referred to in this section’’ are omitted as surplus. In subsection (c)(3), the words ‘‘may be expended’’ are substituted for ‘‘an amount appropriated or authorized to be expended’’ and ‘‘shall be available for or expended in’’, and the words ‘‘dollar for dollar’’ are substituted for ‘‘on an equal and uniform dollar for dollar basis’’, to eliminate unnecessary words. In subsection (d)(1), the words ‘‘including every obli- gation of and to the United States’’ are omitted as sur- plus. The text of 31:463(b)(words after semicolon) is omitted as unnecessary because of the restatement. Editorial Notes AMENDMENTS 1997—Subsec. (d)(2). Pub. L. 105–61 struck out at end ‘‘This paragraph shall apply to any obligation issued on or before October 27, 1977, notwithstanding any assign- ment or novation of such obligation after October 27, 1977, unless all parties to the assignment or novation specifically agree to include a gold clause in the new agreement. Nothing in the preceding sentence shall be construed to affect the enforceability of a Gold Clause contained in any obligation issued after October 27, 1977 if the enforceability of that Gold Clause has been fi- nally adjudicated before the date of enactment of the Economic Growth and Regulatory Paperwork Reduc- tion Act of 1996.’’ 1996—Subsec. (d)(2). Pub. L. 104–208 inserted at end ‘‘This paragraph shall apply to any obligation issued on or before October 27, 1977, notwithstanding any assign- ment or novation of such obligation after October 27, 1977, unless all parties to the assignment or novation specifically agree to include a gold clause in the new agreement. Nothing in the preceding sentence shall be construed to affect the enforceability of a Gold Clause contained in any obligation issued after October 27, 1977 if the enforceability of that Gold Clause has been fi- nally adjudicated before the date of enactment of the Economic Growth and Regulatory Paperwork Reduc- tion Act of 1996.’’ 1985—Subsec.(b). Pub. L. 99–185 struck out ‘‘or de- liver’’ after ‘‘pay out’’ and inserted ‘‘(other than gold and silver coins)’’ before ‘‘that may be lawfully held’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1985 AMENDMENT Amendment by Pub. L. 99–185 effective Oct. 1, 1985, except that no coins may be issued or sold under sec- tion 5112(i) of this title before Oct. 1, 1986, see section 3 of Pub. L. 99–185, set out as a note under section 5112 of this title. § 5119. Redemption and cancellation of currency (a) Except to the extent authorized in regula- tions the Secretary of the Treasury prescribes with the approval of the President, the Sec- retary may not redeem United States currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) in gold. However, the Secretary shall re- deem gold certificates owned by the Federal re- serve banks at times and in amounts the Sec- retary decides are necessary to maintain the equal purchasing power of each kind of United States currency. When redemption in gold is au- thorized, the redemption may be made only in gold bullion bearing the stamp of a United States mint or assay office in an amount equal at the time of redemption to the currency pre- sented for redemption. Page 409 TITLE 31—MONEY AND FINANCE § 5119 (b)(1) Except as provided in subsection (c)(1) of this section, the following are public debts bear- ing no interest: (A) gold certificates issued before January 30, 1934. (B) silver certificates. (C) notes issued under the Act of July 14, 1890 (ch. 708, 26 Stat. 289). (D) Federal Reserve notes for which pay- ment was made under section 4 of the Old Se- ries Currency Adjustment Act. (E) United States currency notes, including those issued under section 1 of the Act of Feb- ruary 25, 1862 (ch. 33, 12 Stat. 345), the Act of July 11, 1862 (ch. 142, 12 Stat. 532), the resolu- tion of January 17, 1863 (P.R. 9; 12 Stat. 822), section 2 of the Act of March 3, 1863 (ch. 73, 12 Stat. 710), or section 5115 of this title. (2) REDEMPTION, CANCELLATION, AND DESTRUC- TION OF CURRENCY.—The Secretary shall— (A) redeem any currency described in para- graph (1) from the general fund of the Treas- ury upon presentment to the Secretary; and (B) cancel and destroy such currency upon redemption. The Secretary shall not be required to reissue United States currency notes upon redemption. (c)(1) The Secretary may determine the amount of the following United States currency that will not be presented for redemption be- cause the currency has been destroyed or irretrievably lost: (A) circulating notes of Federal reserve banks and national banks issued before July 1, 1929, for which the United States Government has assumed liability. (B) outstanding currency referred to in sub- section (b)(1) of this section. (2) When the Secretary makes a determination under this subsection, the Secretary shall re- duce the amount of that currency outstanding by the amount the Secretary determines will not be redeemed and credit the appropriate re- ceipt account. (d) To provide a historical collection of United States currency, the Secretary may withhold from cancellation and destruction and transfer to a special account one piece of each design, issue, or series of each denomination of each kind of currency (including circulating notes of Federal reserve banks and national banks) after redemption. The Secretary may make appro- priate entries in Treasury accounts because of the transfers. (Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 985; Pub. L. 102–390, title II, § 226(b), Oct. 6, 1992, 106 Stat. 1630; Pub. L. 103–325, title VI, § 602(g)(14), Sept. 23, 1994, 108 Stat. 2294.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 5119(a) ..... 31:408a(less last pro- viso). Jan. 30, 1934, ch. 6, §§ 6(less last proviso), 11, 15(1st sen- tence words between 2d and 3d semicolons), 48 Stat. 340, 342, 344. 31:444(1st sentence words between 2d and 3d semi- colons). 31:822b. HISTORICAL AND REVISION NOTES—CONTINUED Revised Section Source (U.S. Code) Source (Statutes at Large) 5119(b)(1) 31:405a–3. June 24, 1967, Pub. L. 90–29, §§ 1, 2, 81 Stat. 77. 31:911. June 30, 1961, Pub. L. 87–66, §§ 2, 5, 6, 9, 10, 75 Stat. 146, 147. 31:915(a), (b). 5119(b)(2) 31:404. May 31, 1878, ch. 146, 20 Stat. 87; June 30, 1961, Pub. L. 87–66, § 7, 75 Stat. 147. 31:420. R.S. § 3580. 31:914. 31:916. 5119(c)(1) 31:915(c)(words be- fore last comma). 5119(c)(2) 31:405a–2. 31:915(c)(words after last comma). 5119(d) ..... 31:917. In subsection (a), the words ‘‘Secretary may not re- deem’’ are substituted for ‘‘no . . . shall be redeemed’’ in 31:408a(less last proviso) because of the source provi- sions restated in section 321 of the revised title. The words ‘‘United States currency (including Federal re- serve notes and circulating notes of Federal reserve banks and national banks)’’ are substituted for ‘‘cur- rency of the United States’’ and the text of 31:444(1st sentence words between 2d and 3d semicolons) for con- sistency with section 5103 of this title and to eliminate unnecessary words. In subsection (b)(1), before clause (A), the words ‘‘upon completion of the transfers and credits author- ized and directed by section 912 of this title’’ in 31:915 and ‘‘and the amount of the payment credited as a pub- lic debt receipt in accordance with such section’’ are omitted as executed. In clause (B), the text of 31:405a–3(last sentence) and 31:915(a)(4) is consolidated. The text of 31:405a–3(1st sentence) is omitted as exe- cuted. In clauses (C) and (E), the citations in paren- theses are included only for information purposes. In subsection (b)(2), the words ‘‘cancel and destroy’’ are substituted for ‘‘retired’’ in 31:914 for consistency in the revised section. The words ‘‘paragraph (1) of this subsection’’ are substituted for ‘‘Any currency the funds for the redemption or security of which have been transferred pursuant to the provisions of section 912 of this title, and any Federal Reserve notes as to which payment has been made under section 913 of this title’’ because of the restatement. The words ‘‘presented to the Secretary’’ are substituted for ‘‘presentation at the Treasury’’ because of the source provisions restated in section 321(c) of the revised title. The text of 31:916 is omitted as unnecessary because of the restatement. The text of 31:404 and 31:420 is omitted as superseded by the source provisions restated in this subsection and subsection (c). The words ‘‘All acts and parts of acts in conflict herewith are hereby repealed’’ in the Act of May 31, 1878 (ch. 146, 20 Stat. 87), are omitted as exe- cuted. In subsection (c)(2), the words ‘‘When the Secretary makes a determination under this subsection’’ are added because of the restatement. The words ‘‘on the books of the Treasury’’ are omitted as surplus. The text of 31:405(e)(2)(1st sentence) is omitted as super- seded by the source provisions restated in subsection (b). In subsection (d), the word ‘‘paper’’ is omitted as sur- plus. The words ‘‘(including circulating notes of Fed- eral Reserve banks and national banks)’’ are sub- stituted for ‘‘including bank notes’’ for consistency in the section. The words ‘‘heretofore or hereafter issued’’ are omitted as surplus. Editorial Notes REFERENCES IN TEXT Act of July 14, 1890, ch. 708, 26 Stat. 289, referred to in subsec. (b)(1)(C), which was known as the Sherman Purchase of Silver Act of July 14, 1890, was classified to sections 408, 410, 412, and 453 of former Title 31, and sec- Page 410 TITLE 31—MONEY AND FINANCE § 5120 tions 122 and 145 of Title 12, Banks and Banking, and was repealed by Pub. L. 97–258, § 5(b), Sept. 13, 1982, 96 Stat. 1069. Section 4 of the Old Series Currency Adjustment Act, referred to in subsec. (b)(1)(D), is section 4 of Pub. L. 87–66, June 30, 1961, 75 Stat. 146, which was classified to section 913 of former Title 31, and was repealed by Pub. L. 97–258, § 5(b), Sept. 13, 1982, 96 Stat. 1079. Acts February 25, 1862, July 11, 1862, and March 3, 1863, and resolution January 17, 1863, referred to in sub- sec. (b)(1)(E), are acts Feb. 25, 1862, ch. 33, 12 Stat. 345, July 11, 1862, ch. 142, 12 Stat. 532, and Mar. 3, 1863, ch. 73, 12 Stat. 709, and resolution Jan. 17, 1863, 12 Stat. 822, respectively, which are not classified to the Code. AMENDMENTS 1994—Subsec. (b)(2). Pub. L. 103–325 inserted con- cluding provisions. 1992—Subsec. (b)(2). Pub. L. 102–390 amended par. (2) generally. Prior to amendment, par. (2) read as follows: ‘‘The Secretary shall redeem from the general fund of the Treasury and cancel and destroy currency referred to in paragraph (1) of this subsection when the cur- rency is presented to the Secretary.’’ § 5120. Obsolete, mutilated, and worn coins and currency (a)(1) The Secretary of the Treasury shall melt obsolete and worn United States coins with- drawn from circulation. The Secretary may use the metal from melting the coins for reminting or may sell the metal. The Secretary shall ac- count for the following in the coinage metal fund under section 5111(b) of this title: (A) obsolete and worn coins and the metal from melting the coins. (B) proceeds from the sale of the metal. (C) losses incurred in the sale of the metal. (D) losses incurred because of the difference between the face value of the coins melted and the coins minted from the metal. (2) The Secretary shall reimburse the coinage metal fund for losses under paragraph (1)(C) and (D) of this subsection out of amounts in the coinage profit fund under section 5111(b) of this title. (b) The Secretary shall— (1) cancel and destroy (by a secure process) obsolete, mutilated, and worn United States currency withdrawn from circulation; and (2) dispose of the residue of the currency and notes. (c) The Comptroller General shall audit the cancellation and destruction of United States currency and the accounting of the cancellation and destruction. Records the Comptroller Gen- eral considers necessary to make an effective audit easier shall be made available to the Comptroller General. (Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 986.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 5120(a) ..... 31:317c. Dec. 18, 1942, ch. 767, § 3, 56 Stat. 1065; July 23, 1965, Pub. L. 89–81, § 203(a), 79 Stat. 256. 5120(b) ..... 31:421. R.S. § 3581. 31:422. June 23, 1874, ch. 455, § 1(3d par. under heading ‘‘Na- tional Currency’’), 18 Stat. 206. 5120(c) ..... 31:49a. May 20, 1966, Pub. L. 89–427, § 5, 80 Stat. 161. In subsection (a)(1), before clause (A), the word ‘‘obso- lete’’ is substituted for ‘‘uncurrent’’ as being more pre- cise. The words ‘‘withdrawn from circulation’’ are sub- stituted for ‘‘received in the Treasury’’ for clarity. The words ‘‘heretofore or hereafter issued’’ are omitted as surplus. The words ‘‘metal from melting the coins’’ are substituted for ‘‘the resulting metal’’ because of the re- statement. The word ‘‘reminting’’ is substituted for ‘‘coinage’’ for consistency in the revised title. The word ‘‘material’’ is omitted as being included in ‘‘metal’’. The words ‘‘The Secretary shall account’’ are sub- stituted for ‘‘shall be accounted for by entries’’ because of the source provisions restated in section 321 of the revised title. In clause (D), the word ‘‘face’’ is sub- stituted for ‘‘nominal or face’’ to eliminate unneces- sary words. The words ‘‘coins minted from the metal’’ are substituted for ‘‘the amount the same will produce in new coin’’ for clarity. In subsection (a)(2), the words ‘‘The Secretary shall reimburse’’ are substituted for ‘‘fund shall be reim- bursed’’ because of the source provisions restated in section 321 of the revised title. The text of 31:317c(proviso) is omitted as obsolete because the stat- utory limit on the coinage metal fund was removed by the restatement of section 3528 of the Revised Statutes by section 206(a) of the Coinage Act of 1965 (Pub. L. 89–81, 79 Stat. 256). In subsection (b), before clause (1), the words ‘‘The Secretary shall’’ are substituted for ‘‘shall be destroyed in such manner and under such regulations as the Sec- retary of the Treasury may prescribe’’ in 31:421 because of the source provisions restated in section 321 of the revised title. In clause (1), the words ‘‘cancel and de- stroy’’ are substituted for ‘‘shall be destroyed’’ to con- form to subsection (c) and section 5118(c) and (e) of the revised title. The words ‘‘(by a secure process)’’ are sub- stituted for ‘‘may be destroyed by maceration instead of burning to ashes’’ in 31:422 to eliminate unnecessary words and because of the source provisions restated in section 321 of the revised title. The words ‘‘obsolete, mutilated, and worn . . . withdrawn from circulation’’ are substituted for ‘‘which by law are required to be taken up, and not reissued, when taken up’’ in 31:421 for consistency with subsection (a) and 12:124. The words ‘‘United States currency’’ are substituted for ‘‘all other notes’’ in 31:421 and ‘‘All national bank notes . . . and other obligations of the United States’’ for consistency in the revised title. The words ‘‘Mutilated United States notes, when replaced according to law’’ are omitted as superseded by the source provisions restated in section 5119(b) of the revised title. The text of the 3d paragraph(words before the first semicolon and be- tween the 2d and last semicolons) under the heading ‘‘National Currency’’ in section 1 of the Act of June 23, 1874 (ch. 455, 18 Stat. 206), is omitted as executed. In clause (2), the words ‘‘dispose of the residue of the cur- rency and notes’’ are substituted for ‘‘The pulp from such macerated issue shall be disposed of only under the direction of the Secretary of the Treasury’’ in 31:422 to eliminate unnecessary words and for consistency in the revised title. In subsection (c), the word ‘‘currency’’ is substituted for ‘‘currency . . . unfit for circulation’’ to eliminate unnecessary words. The words ‘‘regardless of who is re- sponsible for, and regardless of who performs, such can- cellation, destruction, or accounting’’ are omitted as unnecessary because of the restatement. The word ‘‘record’’ is substituted for ‘‘books, documents, papers, and records’’, and the words ‘‘make . . . easier’’ are substituted for ‘‘facilitate’’, for consistency in the re- vised title and with other titles of the United States Code. Statutory Notes and Related Subsidiaries TERMINATION OF COINAGE PROFIT FUND AND COINAGE METAL FUND All assets and liabilities of Coinage Profit Fund and Coinage Metal Fund transferred to United States Mint