What is money anyways?

Quote: Ayecarumba

$100 could be exchanged for 100 silver dollars. The paper certificate represented a physical amount of silver in the "Treasury".

I recall that the weight of silver to be used in coins was actually specified in the ?Constitution? to make it similar to popular coinage in circulation at the time.

The Coinage Act , passed by the United States Congress on April 2, 1792, established the United States Mint and regulated the coinage of the United States. It was not part of the constitution (Ratified June 21, 1788), but it is one of the oldest laws in the country.

This act established the silver dollar as the unit of money in the United States to compete with the most widely accepted currency in the new world, the Spanish dollar (no Latin American countries would declare independence from Spain for another 18 years).

The Bureau of Engraving and Printing (BEP) was not formed until August 29, 1862., Congress authorized the Secretary of the Treasury to issue paper currency in lieu of coins due to the lack of funds needed to support the conflict. The paper notes were essentially government IOUs and were called Demand Notes because they were payable "on demand" in coin at certain Treasury facilities.

Prior to 1862 the federal government had founded two banks to issue paper currency twice to fund the War of Independence and to fund the debts incurred by War of 1812. The second bank had a 20 year charter which began in 1816. President Jackson was elected president partly on the promise to end the the Second Bank , which he did when their charter expired in 1836. Many people think it is ironic that his image is on the $20 banknote.

During what is known as the Free Banking Era (1836-1865), state-chartered banks and unchartered “free banks” took hold. Banks began issuing their own money notes that could be redeemed in gold or coins, and offered demand deposits to enhance commerce.

Quote: Wizard

Is it just a coincidence those coins are valued in proportion to their weight (correct me if I'm wrong).

Dimes, quarters, half dollars and even Eisenhower dollars are all proportionate to their weight at $20 per pound. Given that there is 14.5833 troy ounces per pound that would be $1.371 per troy ounce. The difference between the face value of a coin and it's precious metal content has been called "seignorage" since the middle ages as it used to fund a tax to the monarch.

Silver passed $1.00 per ounce at the end of 1961 and was $1.30 per ounce by May 1963. At the end of 1964 all new clad coins were issued with no silver in them. It only worked to make coins silver because they were worth much more as coins than their meltdown value. Silver certificate banknotes were also discontinued in 1964. Silver passed $2 an ounce briefly in 1968.

Thanks Paco! I learned something today thanks to you.

More tidbits:
In the second half of the 19th century, Nevada became a state because of the silver rush caused by the discovery of the Comstock lode. There was so much silver being pulled from the ground, that the price was depressed. Mining interests convinced (i.e., "bribed") U.S. Government officials to pass legislation ordering the government to buy up the silver to support the price. The bullion would be turned into Morgan silver dollars, and silver certificates were issued to encourage free exchange.

In the 1960's, the price of silver went over $1 an ounce, and silver coins were now worth more melted down than their face value. Clad coins were introduced to reduce the value of their metal content, and make them more attractive for money, than for hording. Silver certificates would no longer be honored for exchange back to silver after 1964.

Quote: Ayecarumba

In the second half of the 19th century, Nevada became a state because of the silver rush caused by the discovery of the Comstock lode. .

And who had the Comstock Lode? George Hearst.
Who's son William started a newspaper dynasty
and ran the family fortune into the ground building
giant homes and importing thousands of antiques
from Europe, where the aristocracy was crumbling
and old money families were selling treasures for
pennies on the dollar.

Quote: Ayecarumba

In the second half of the 19th century, Nevada became a state because of the silver rush caused by the discovery of the Comstock lode.

I thought Lincoln pushed that through because Nevada leaned more towards the Union and would be two more votes on his side in the Senate. Thus the state slogan, "Battle Born."

Quote: Wizard

I thought Lincoln pushed that through because Nevada leaned more towards the Union and would be two more votes on his side in the Senate. Thus the state slogan, "Battle Born."

Well I don't think the two comments are incompatible. Certainly Nevada was a free state, but it needed some kind of minimum population to be a viable state. In Mexico a state must have a population of 100K. So Baja, Baja Sur, and Quintana Roo all had to wait until they had that many people to become states. It seems like the population of Nevada was well under 40K.

Quote: The New York Times

The Times tucked the article away on page four--in a column that followed an article about the news of the rebellion, referring to the Civil War, and the news from Europe.
NEVADA: A STATE OF THE UNION

The President has issued a proclamation, agreeably to an act passed in the last session of Congress, declaring the admission of Nevada into the Union as a State. By the last census Nevada had a population of only about twenty-six thousand, two-thirds of whom were Indians; but the great increase of the population of the territory, and its great growth in wealth, has taken place within the last six, indeed within the last four years. Silver was discovered there in great abundance and purity, and the mining of it became the great interest and industry of the region. As California lay directly west of Nevada, Utah north of it, and Colorado to its eastward, it at once secured from these regions, and particularly from California, vast numbers of emigrants acquainted with mining. Our readers must remember the intense excitement which prevailed on the Pacific coast four years ago about the "Washoe" silver region, which was the first profitable mining done in what now constitutes the State of Nevada. Various fortunes waited on the territory and on its mining prospects; but it has grown with unprecedented rapidity--distancing completely all the contiguous territories.
The President, in admitting Nevada as a State into the Union, has but recognized the operation of the last act of congress, which made provision for its admission upon its forming a constitution and complying with the other demands for such cases made and provided.

Quote: Wizard

I thought Lincoln pushed that through because Nevada leaned more towards the Union and would be two more votes on his side in the Senate. Thus the state slogan, "Battle Born."

Nevada was able to meet the population requirement to become a territory because of the influx of fortune hunters. Territory status is the precursor to statehood. Thus the State nickname "The Silver State". Isn't West Virginia's slogan "Battle Born"?

State Slogan
Nevada Battle Born ; The Silver State ; A World Within. A State Apart.
West Virginia Wild and Wonderful; also on its license plate as Wild, Wonderful; (formerly) Almost Heaven

Good trivia question is what four states were formed from territory that formerly belonged to other states. One of them is extremely difficult IMO.

Quote: Wizard

I'm personally thinking of getting into bitcoin but what bothers me is that the whole thing seems to have no foundation to it.

Gee, look at all the courts that have examined the issue and pronounced lawful as both currency and commodity. The US govt. seized some and sold them. Heck, how much "foundation" does the "cloud" have? The Bitcoiners Association in my county had 154 attendees at a recent wine and cheese meeting. The nation of Norway has created a bitcoin account for all its citizens, but it remains zero unless the citizen elects to participate.

Please consider:
The electricity generation industry was pretty robust and rested on the notion of flowing in the 'wrong' direction.
Beer production was pretty darn an OLD fangled thing at a time when people still did not understand bacteria and fungi.

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ON EDIT: Don't understand the Block Chain Thing (related to bit coinage)...... well, remember... it works better when errors are tolerated. So a Wrong Block Chain Thing is part of an even more profitable "foundation".

Quote: Evenbob

And who had the Comstock Lode? George Hearst.

Didn't Hearst win it in a poker game, it was originally owned by three men, one of whom was Samuel Leghorn Clemens, a/k/a Mark Twain.

Quote: Pacomartin

Good trivia question is what four states were formed from territory that formerly belonged to other states. One of them is extremely difficult IMO.