[Kinser] I did…(look at the article)
[Mike] I went back to look at the article myself and I couldn’t find it. I had found a 1916 report that had a nice little table in which they gave the market price for silver and the value of 371.25 grains of silver, which showed fluctuations in value with changes the price of silver over the 1882-1916 period, but all were less than $1. I somehow must have deleted the part of the post that referenced this article. I neglected to bookmark it and cannot find it now.
So here is a link that makes the same point. Here is the relevant section:
Between 1878 and 1900, silver was used as money in its own right in the form of the silver dollar. However, unlike the silver dollar before 1873, which was commodity money, the silver dollar between 1878 and 1900 was fiat money. Congress and the Secretary of the Treasury decided how many silver dollars to issue. Moreover, the value of silver in a silver dollar was less than its monetary value.
Here’s another link that covers the later period.
Substantial “backing” of paper money by gold is also both unnecessary and insufficient to make such paper “as good as gold. ”For that, what’s usually required is unrestricted convertibility of paper money into gold coin, for which fractional gold reserves not only may suffice but in practice usually have sufficed. Thus “silver certificates” issued by the U.S. Treasury between 1878 and 1933, though “backed” by silver, were worth their nominal value not in the silver for which they were exchanged (the market value of which was well below its then inoperative mint value) but in gold, thanks to the limited number of certificates issued and (after 1890) to their being redeemable for gold
[Mike] I went back to look at the article myself and I couldn’t find it. I had found a 1916 report that had a nice little table in which they gave the market price for silver and the value of 371.25 grains of silver, which showed fluctuations in value with changes the price of silver over the 1882-1916 period, but all were less than $1. I somehow must have deleted the part of the post that referenced this article. I neglected to bookmark it and cannot find it now.
So here is a link that makes the same point. Here is the relevant section:
Between 1878 and 1900, silver was used as money in its own right in the form of the silver dollar. However, unlike the silver dollar before 1873, which was commodity money, the silver dollar between 1878 and 1900 was fiat money. Congress and the Secretary of the Treasury decided how many silver dollars to issue. Moreover, the value of silver in a silver dollar was less than its monetary value.
Here’s another link that covers the later period.
Substantial “backing” of paper money by gold is also both unnecessary and insufficient to make such paper “as good as gold. ”For that, what’s usually required is unrestricted convertibility of paper money into gold coin, for which fractional gold reserves not only may suffice but in practice usually have sufficed. Thus “silver certificates” issued by the U.S. Treasury between 1878 and 1933, though “backed” by silver, were worth their nominal value not in the silver for which they were exchanged (the market value of which was well below its then inoperative mint value) but in gold, thanks to the limited number of certificates issued and (after 1890) to their being redeemable for gold