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Legal Tender

(A). The circulating medium of a nation, according to a standard fixed by the government of that nation. It may be in metal, in paper, or anything else that the government may choose to sanction. In England, at present (1895), the standard is a gold sovereign, guaranteed of a fixed purity. In some countries it is silver, and in some countries the two precious metals are made to bear a relative value, say twenty silver shillings (or their equivalents) shall equal in commercial value a gold sovereign. In Germany, before 1872, a very base silver was a legal tender, and in Ireland James II. made a farthing the legal tender represented by an English shilling, so that 5d. was really a legal tender for a sovereign. Of course, export and import trade would not be possible under such conditions.

Source: Dictionary of Phrase and Fable, E. Cobham Brewer, 1894
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