Found this tidbit on coinfacts. By the late 1850’s the chaotic currency situation in California had changed completely. Silver quarters and half dollars had been issued in such quantity by the new San Francisco Mint that they actually sold at a discount from face value from 1858 or 1859 until 1873. --------------------------------------------------------------------------------------------------------- They sold coins below face value?! Would love to hear more about this.
I would guess thats not accurate. There are only a few dates for both quarters and halves minted in SF before that time and all in very miniscule amounts. I'd say people used Spanish coins at the time more often because US coinage wasn't plentiful enough in the West. Guy
I believe that is correct. I recall reading about it in "The Crime of 1873: The Comstock Connection" by Van Ryzin. Chris
The Coinage Act of 1857 outlawed the use of foreign coins in the US. I don't know how stringently the US enforced that law in California but using foreign coins after passage of the Act was technically illegal (much like possessing and using marijuana is legal in Colorado but technically against US law).
in 1853 they lowered the amount of silver in the coins so maybe that caused people to value them less than before. that makes more sense to me.
Literacy rates were much lower then and people much more susceptible to believing what they heard so anything is possible. I have heard anecdotal stories of Spanish/Mexican silver coins circulating in rural areas of the American west until the turn of the last century. I was also reading of a shipwreck in the Great Lakes area from 1888 where they found several lower value foreign coins that could have still been used in circulation since they were mixed in with American coins.
Conder can probably give you the specifics, or you can look them up, but the value of silver fluctuated up and down a lot during the second half of the 1800's. So depending where the value was at a given time, sometimes the silver coins held silver worth more than their face value. During these times the coins were hoarded and pulled out of circulation. But during the times when the silver content was worth less than face, some people were reluctant to take the coins and so they were discounted below face. My guess is that is the probable explanation.
Found it! To fund the Civil War, the government issued Greenbacks along with fractional currency. This "soft money" was to be redeemed for specie (coinage) by the Specie Resumption Act of 1875, and a record production of dimes, quarters and half dollars was implemented to fund the redemption of the fractional currencies. At that time, silver maintained a high enough price to the paper dollar to make this possible, but as a depression set in and credit grew tighter, this also coincided with the peak production of silver from the Comstock Lode. At the same time, the Trade Dollar was being rejected by the Chinese which resulted in a massive entry of these depreciated dollars into domestic circulation. As a result, the silver value of a standard silver dollar fell below 80c, by mid-1876. Chris
Fractional currency was not issued to "fund" the Civil War; it was issued due to the widespread hoarding of silver coins, and their disappearance from circulation, which caused severe problems in everyday commerce. Since it was not practical to print 1c fractional currency, this explains the proliferation of store cards, merchant tokens, and patriotics during the 1860s.
According to this from Wikipedia and Van Ryzin's book, "The Crime of 1873", it was. http://en.wikipedia.org/wiki/Specie_Payment_Resumption_Act Chris
I believe Chris is correct. It was the Comstock lode silver, (and all of the other silver mines) that was changing the market ratio price between silver and gold. The CA gold rush had forced us to lower silver in coinage in 53, but the ratio had changed again, but our coins would not have more silver in them until 73. So, I believe I have read as well our silver coins out west, (where coins traded more on metal value than stated value), were discounted. Btw, i just read last night about how the mint in this same time frame had two prices for proof sets, one if you paid in silver or gold, and a higher price if you paid in paper money, (even US paper money). Man, I could imagine how much a mess that would have been.
I can't remember where I read it, but I seem to remember that Lincoln felt the railroad was the key to not only winning the war, but stimulating the economy. But because the outcome of the war was not really certain, the banks didn't want to issue the loans. So Lincoln issued the greenbacks instead of borrowing from the "central bank" Can't remember if it was the first or second U.S. bank. I have also read conspiracy theories that believe that this course of circumventing the central banking system was the reason for his assassination, along with pretty much every other presidential assassination, and attempted assassination. But I suppose that is a topic for a whole other thread.
I'll stand by my original statement and analysis. Over 75% of the fractional currency (total about $360M) was issued AFTER the Civil War ended, beginning with a portion of the Third Issue. The entire Fourth and Fifth Issue appeared in 1869 ($166M) and 1874 ($63M) respectively. Even the Fourth Issue by itself was greater than the 1st, 2nd, and 3rd combined ($129M). Funding: greenbacks yes, fractionals (overwhelmingly) no. It was emergency currency due to the rapid hoarding of silver coins, the unintended result of the policy of suspended specie payments late in 1861. A side note of interest: "Five issues of Postage and Fractional Currency in the total amount of $369 million were printed and released to circulation between Aug. 21, 1862, and Feb. 15, 1876, when a flood of silver from the Comstock Lode drove down silver bullion prices, reducing the intrinsic value of silver coins to a point below face, value, thereby insuring that they would remain in circulation. The silver price drop further augmented the supply of circulating silver by triggering a flow back to the United States ñ where they could be exchanged for their greater face value - of the hundreds of millions of silver coins which had been exported to Canada, the West Indies and Latin America since 1862."
