Pastor Rant!

Little  bit of history!!

The birth of the U.S. was paid for by both a debauched paper currency and large debts that it soon defaulted on. When Alexander Hamilton became Treasury Secretary in 1789, his job was not just restoring the country’s credit by restructuring the debt and imposing new taxes; he also had to clean up the mess that was money in the early U.S.

Hamilton proposed to base the monetary system on both gold and silver. Gold had advantages, including greater stability, he argued, but it would be disruptive to withdraw the large amounts of silver that were already in use. He proposed “ten dollar and one dollar gold pieces, one dollar and ten cent silver pieces, and one cent and one-half cent copper pieces,” and the Mint Act of 1792 largely followed his recommendations. As gold and silver were both widely recognized bases for money at the time, this was relatively uncontroversial.

This “bimetallic” standard meant that the dollar was defined as either a specific amount of silver or a specific amount of gold. In 1834, Congress set the ratio between the two at 16-to-1, although the market value of gold was slightly lower than 16 times the market value of silver. The California gold rush of the 1840s reduced the relative price of gold further, which meant that the U.S. was effectively on the gold standard.