The weight of silver coins was adjusted beginning in 1853, with arrows added to either side of the obverse date on this quarter to signify the change. (Photo: Heritage Auctions)
By Gerald Tebben
What would a Tea Party revolution mean to coin collectors? That’s something I had been thinking about as the group flexed its muscles in during the Republican primary season last summer.
Where there is no one spokesman and every splinter seems to have its own ideas on how the country should be run, one theme recurs—the federal government should strictly follow the Constitution of 1787. That would mean, by some readings of the document, a return to circulating gold and silver coinage and no federal paper money.
Section 10 of the Constitution forbids states from making “any Thing but gold and silver Coin a Tender in Payment of Debts.”
In the early 1800s, the metallic content of coins approximated their value as money. A cent contained a cent’s worth of copper; an eagle contained $10 worth of gold.
The fineness and weight of coins changed periodically in response to the price of bullion. Gold coins minted before 1834 weighed more than ones struck later. Silver coins were adjusted in 1853 and 1873.
If the U.S. Mint were still striking gold and silver coins for circulation, the metallic content of those coins would have to change daily. Markets move more quickly now than they did in the 19th century. In 1834, the price of gold was $20.65 an ounce. In 1899, the price was $20.66.
After 1834, circulating gold coins were struck to the standard of $20.65 an ounce and silver coins to the standard of $1.29 an ounce. In round terms, a $20 double eagle contained about an ounce of gold. A Morgan dollar had about three-fourths of an ounce of silver.
In January 2000, gold was worth about $280 an ounce. A circulating $20 double eagle issued that year would have contained 7/100ths of an ounce of gold and been smaller than a dime.
By 2010, when gold rose above $1,250 an ounce, a circulating gold double eagle would weigh 16/1000ths of an ounce—about the same as 10 to 20 grains of rice—and be so small you’d need a magnifying glass to see it.
Silver coins would be a bit easier to see. With silver at $18.50 an ounce, a 2010 silver dollar would be midway in diameter between a half dime and a dime. Paper money, too, would be radically different. Federal Reserve notes and all federal paper money would disappear.
Before the Civil War, paper money was issued by state-regulated private banks, as well as by other businesses. Bills issued by strong banks in states with tight regulation were worth more than bills issued by weak banks in states with little regulation. Merchants kept regularly updated bank note reporters beside the till to tell them how much each bill was worth.
A return to the monetary rules of the Constitution of 1787 would give us an almost infinite variety of coins and bills to collect, but commerce would be much more difficult.
Gerald Tebben, a longtime numismatist, is editor of the Central States Numismatic Society’s Centinel and a contributing writer to Coin World.
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