Denver Gold and Silver
5475 Leetsdale Dr Suite 210
Denver, Colorado 80246
Monday - Saturday 10 am to 5 pm
Sundays by Appointment Only
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United States Dollars
The first dollar coins issued by the United States Mint were of
the same size and composition as the Spanish dollar and even after
the American Revolutionary War the Spanish and U.S. silver dollars
circulated side by side in the United States. The coinage of various
English colonies also circulated. The lion dollar was popular in
the Dutch New Netherland Colony (New York), but the lion dollar
also circulated throughout the English colonies during the seventeenth
and early eighteenth centuries. Examples circulating in the colonies
were usually worn so that the design was not fully distinguishable,
thus they were sometimes referred to as "dog dollars".
The U.S. dollar was created and defined by the Coinage Act of 1792.
It specified a "dollar" to be between 371 and 416 grains
(27.0 g) of silver (depending on purity) and an 'eagle" to
be between 247 and 270 grains (17 g) of gold (again depending on
purity). It set the value of an eagle at 10 dollars, and the dollar
at 1/10th eagle. It called for 90% silver alloy coins in denominations
of 1, 1/2, 1/4, 1/10, and 1/20; it called for 90% gold alloy coins
in denominations of 1, 1/2, 1/4, and 1/10.
The value of gold or silver contained in the dollar was then converted
into relative value in the economy for the buying and selling of
goods. This allowed the value of things to remain fairly constant
over time, except for the influx and out flux of gold and silver
in the nation's economy.
For articles on the currencies of the colonies and states, see Connecticut
pound, Delaware pound, Georgia pound, Maryland pound, Massachusetts
pound, New Hampshire pound, New Jersey pound, New York pound, North
Carolina pound, Pennsylvania pound, Rhode Island pound, South Carolina
pound and Virginia pound.
The history of the dollar in North America pre-dates US independence.
Even before the Declaration of Independence, the Continental Congress
had authorized the issuance of dollar denominated coins and currency,
since the term 'dollar' was in common usage referring to Spanish
colonial 8 real coins or "Spanish Milled Dollars". Though
several monetary systems were proposed for the early republic, the
dollar was approved by Congress in a largely symbolic resolution
on August 8, 1786. After passage of the Constitution was secured,
the government turned its attention to monetary issues again in
the early 1790s under the leadership of Alexander Hamilton, the
secretary of the treasury at the time. Congress acted on Hamilton's
recommendations in the Coinage Act of 1792, which established the
Dollar as the basic unit of account for the United States. The word
"dollar" is derived from Low Saxon "daler",
an abbreviation of "Joachimsdaler" – (coin) from Joachimsthal
(St. Joachim's Valley, now Jáchymov, Bohemia, then part of the Holy
Roman Empire, now part of the Czech Republic; for further history
of the name, see dollar.) – so called because it was minted from
1519 onwards using silver extracted from a mine which had opened
in 1516 near Joachimstal, a town in the Ore Mountains of northwestern
Bohemia. The term "dollar" was widely used in reference
to a Spanish coin at the time it was adopted by the United States.
Because prices of gold and silver in the open marketplace vary independently,
the production of coins of full intrinsic worth under any ratio
will nearly always result in the melting of either all silver coins
or all gold coins. In the early 1800s, gold rose in relation to
silver, resulting in the removal from commerce of nearly all gold
coins, and their subsequent melting. Therefore, in 1834, the 15:1
ratio was changed to a 16:1 ratio by reducing the weight of the
nation's gold coinage. This created a new U.S. dollar that was backed
by 1.50 g (23.22 grains) of gold. However, the previous dollar had
been represented by 1.60 g (24.75 grains) of gold. The result of
this revaluation, which was the first-ever devaluation of the U.S.
dollar, was that the value in gold of the dollar was reduced by
6%. Moreover, for a time, both gold and silver coins were useful
In 1853, the weights of US silver coins (except, interestingly,
the dollar itself, which was rarely used) were reduced. This had
the effect of placing the nation effectively (although not officially)
on the gold standard. The retained weight in the dollar coin was
a nod to bimetallism, although it had the effect of further driving
the silver dollar coin from commerce.
With the enactment (1863) of the National Banking Act during the
American Civil War and its later versions that taxed states' bonds
and currency out of existence, the dollar became the sole currency
of the United States and remains so today.
In 1878, the Bland-Allison Act was enacted to provide for freer
coinage of silver. This act required the government to purchase
between $2 million and $4 million worth of silver bullion each month
at market prices and to coin it into silver dollars. This was, in
effect, a subsidy for politically influential silver producers.
The discovery of large silver deposits in the Western United States
in the late 19th century created a political controversy. Due to
the large influx of silver, the value of silver in the nation's
coinage dropped precipitously. On one side were agrarian interests
such as the United States Greenback Party that wanted to retain
the bimetallic standard in order to inflate the dollar, which would
allow farmers to more easily repay their debts. On the other side
were Eastern banking and commercial interests, who advocated sound
money and a switch to the gold standard. This issue split the Democratic
Party in 1896. It led to the famous "cross of gold" speech
given by William Jennings Bryan, and may have inspired many of the
themes in The Wizard of Oz. Despite the controversy, the status
of silver was slowly diminished through a series of legislative
changes from 1873 to 1900, when a gold standard was formally adopted.
The gold standard survived, with several modifications, until 1971.
Next --> Gold Standard