From: billn@hpcvaac.cv.hp.com (bill nelson)
Newsgroups: alt.folklore.urban
Subject: Re: Gold coins (Was: Re: You are humble and loveable.  CHOMP!)
Date: 4 Sep 92 23:43:28 GMT
Organization: Hewlett-Packard Company, Corvallis, Oregon USA

me@csri.toronto.edu (Daniel R. Simon) writes:
: In article <1992Aug29.001818.1084@hpcvaac.cv.hp.com> billn@hpcvaac.cv.hp.com (bill nelson) writes:
: >me@csri.toronto.edu (Daniel R. Simon) writes:
: >
: >Gold coins (including the ten-dollar coin) were in circulation into the 1920s,
: >at least. They only went out of circulation when the government took our
: >currency off the gold standard and made it a crime to possess gold. Before
: >that time, our national currency had been based on valuable metal - you could
: >turn in a paper certificate anytime and get gold or silver in return.
: 
: I am well aware that gold coins have recently been, and in some cases
: still are, *legal tender*.  Canada minted a twenty-dollar gold coin in
: 1967 as part of its centennial series, and I have no reason to believe
: that it is not still legal currency here.  However, it is highly
: doubtful that anyone was foolish enough to spend one, even during the
: brief period when its gold content was actually worth less than its
: face value.  Hence my doubts that gold coins were in *common
: circulation* at any time in the recent past.  The instinct to hoard
: currency of intrinsic material value, and instead spend materially
: worthless counterparts of equal face value (paper money, for instance)
: is quite universal; the government's promise of convertibility cannot
: compete with the reality of a lump of pure gold in one's hand.  (So
: argued Gresham, anyway.)

Well, it would help if you read a little numismatic history. As I, and
others have stated, gold coins were in common circulation. Since they
were not worth more than their face value, and they could get others
easily, there was no need to hoard them.  Certainly, some people kept
them, but most people treated them just like any other coin.  The same
is true for silver coins - at one time, they were worth their face
value in silver.  They also were commonly used to pay for merchandise.

The only time a sane person hoards something is when they expect a shortage
of that material sometime in the near future. There was no such fear for
either gold or silver - during the time when the coins were in circulation.

There are a number of reasons to use coin instead of paper currency. If the
coin is made of valuable metal then it has an intrinsic value - not just a
possibly worthless government guarantee of value. Supposedly, there were  
some businesess, around the start of the 20th century, that refused to accept
anything except coin in payment. I am sure the same has been true throughout
history when people do not trust the stability of their government. Another
reason is that the coins are less subject to destruction due to wear, moisture
etc. Many people who performed manual labor for a living would prefer to be
paid in coin.

So,  your doubts are wrong. Of course, a little research would have shown
that - but that is asking too much in this group.

Bill
Newsgroups: alt.folklore.urban,soc.culture.jewish