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<p>[QUOTE=&quot;Conder101, post: 3082187, member: 66&quot;]In 1918 Britain needed silver for the purchase of needed war supplies (sellers didn&#039;t want paper money from a country that was on shaky ground), they also needed silver for their control of India (A country that was very pro silver).&nbsp; They didn&#039;t have it but we had hundreds of millions of silver dollars just sitting and taking up space in our vaults.&nbsp; Britain was an ally so we sold them the silver at $1 per oz (Which was above the market price at the time.&nbsp; But we had them over a barrel, they needed the silver quickly and the market couldn&#039;t have supplied it fast enough, but we had it already on hand.)&nbsp; We melted the dollars and shipped the silver to England.&nbsp; </p><p><br /></p><p>The law allowed for the melting of 250 million silver dollars with roughly 50 million ounces being earmarked for minor US coinage and the balance going to Britain.</p><p><br /></p><p>Why after we melted the coins did we recoin them three years later?&nbsp; Two reasons, One all those silver dollars in the vaults were the backing for the silver certificates in circulation.&nbsp; Melting the coins meant that $250 million in silver certificates had to be withdrawn from circulation, and hurt our economy.&nbsp; Recoining the silver dollars would allow the government to issue (spend) $250 million dollars.</p><p><br /></p><p>Second, it was a political plum for the silver mining interests.&nbsp; There was a provision in the Pitman Act that required the dollars to be recoined and the silver HAD to be purchased from newly mined domestic silver AND PAID FOR AT THE RATE OF $1 PER OZ.&nbsp; This was still well above the market price for silver, so the law REQUIRED the government to overpay private companies for the raw materials.&nbsp; The government would have taken a loss on the recoinage costs, but the section that sold the silver to England also included a few cents extra per oz to cover the recoinage costs.</p><p><br /></p><p>Once the dollars melted under the Pitman Act had been replaced, which happened in 1928 coinage of dollars stopped.</p><p><br /></p><p>Beginning in 1933 the government again began trying to support the silver interests and to inflate the currency buy buying silver and issuing silver certificates.&nbsp; At the time the certificates had to backed by SILVER DOLLARS so that was the reason for the 1934 and 1935 Peace dollars, then the law was changed to just &quot;monitize&quot; the silver bullion and allow it to back the certificates without the expense&nbsp; and storage problems of coinage.&nbsp; So the Peace dollar ended abd silver purchases continued to the extend of over two BILLION oz of silver which allowed for the issuance of over $2.5 billion worth of silver certificates.[/QUOTE]</p><p><br /></p>

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