![]() ![]() Gold remained fixed within a few pennies of this price until the havoc of the Great Depression 100 years later. ![]() The Coinage Act of 1834 devalued silver gold was set at $20.65/oz while silver remained at $1.29/oz, for a ratio of 16:1. It set the gold to silver price ratio at 15:1, deeming gold to be valued at $19.39/oz and silver at $1.29/oz. Furthermore, this iconic document prohibited the States from making “ any instrument other than gold or silver a tender in payment of debts ”.Ī bimetallic monetary standard was formalized in 1792 with the Mint Act. In 1787, the United States Constitution gave Congress the power to coin money and to regulate its value. Note that gold and/or silver were commonly used as real monetary instruments or “specie ” by many governments from the 1700s thru the late 1900s. This 179-year history is largely a record of government attempts to control the supply and demand of silver and its US dollar price in relation to the set price for gold. Let’s review the history of gold and silver as money in the United States of America from 1792 until 1971. In a subsequent musing, I will document the record of gold-silver ratios in the floating fiat currency market from late 1971 to the present. This musing covers the period from 1792 when the United States government first established a national currency backed by gold and silver until August 1971 when Nixon floated the US dollar against gold and world currencies. I document how various wars, panics and depressions, Congressional acts, and executive orders have affected the US dollar prices of precious metals and resulting gold-silver ratios. The Act also stipulated that “ the director of the mint… be authorized to contract for and purchase a quantity of copper, not exceeding one hundred and fifty tons… to be coined at the mint into cents and half-cents… and be paid into the treasury of the United States, thence to issue into circulation.” Furthermore, “no copper coins or pieces whatsoever except the said cents and half-cents, shall pass current as money, or shall be paid, or offered to be paid or received in payment for any debt, demand, claims, matter or thing whatsoever.In today’s musing I review the history of gold, silver and fiat currency as money in the United States of America. ![]() This legislation resulted in the birth of the copper cent, from which descends today’s one cent piece. On An Act to Provide For a Copper Coinage was signed into law by President George Washington. This was the first federal building erected under the United States Constitution. The Act also authorized construction of a mint building in Philadelphia, the nation’s capital. While the first draft of the Act stipulated that all coins would employ a portrait of the president on the obverse, the final version called for an image emblematic of liberty as well as the word “ Liberty“. Essentially, it provided the basic framework on which all subsequent coinage production was based. The Act pegged the newly created United States dollar to the value of the widely used Spanish silver dollar ( 8 reales), saying it was to have “the value of a Spanish milled dollar as the same is now current”.Īlthough some of the provisions in the 1792 Coinage Act were adjusted as time went by, the majority of the rules specified in this Act remained in effect for many decades. The Act also allowed that one person could perform the functions of Chief Coiner and Engraver. Mint were a Director, an Assayer, a Chief Coiner, an Engraver, and a Treasurer. currency.īy the Act, the Mint was to be situated at the seat of government of the United States. This act established the silver dollar as the unit of money in the United States, declared it to be lawful tender, and created a decimal system for U.S. The long title of the legislation is An act establishing a mint, and regulating the Coins of the United States. The Coinage Act, passed by the United States Congress on April 2, 1792, created the United States dollar as the country’s standard unit of money, established the United States Mint, and regulated the coinage of the United States. ![]()
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