There were a lot of inconveniences when the Pilgrims came here and settled, not the least of which was that most of them died in the first winter! The Jamestown Colony, a few years earlier, came out even worse. Just imagine: No electricity, oil, machinery, transportation, or communications, and rudimentary tools made growing things extremely difficult. They brought English coins with them, but there were no banks, and little paper either, so there were no banknotes. No gold or silver mines, so their gold and silver had to be imported. Actually, the first paper money in the New World, was issued in 1690, to pay troops fighting the French, in what was called “King William’s War.” Pennsylvania issued paper money in 1723, and in 1729 Ben Franklin wrote a paper titled, “A Modest Inquiry into the Nature and Necessity of Paper Currency.” That suited him fine, as he was rewarded with the printing contract to turn out paper money. As with all paper money however, it was soon discounted in favor of gold and silver. Gresham’s Law says that ’bad money drives out good money.’ The bad money (paper) drives the good money (gold and silver) out of circulation and into safes, and under mattresses, because it holds its value and is safe to save in, as opposed to today’s dollars, and the paper money in 1729. ’Bad money” (paper) was printed recklessly, and North Carolina in the 1730’s, had 17 different ’bad monies’ in circulation.
America was soon on its feet, and began manufacturing and exporting various things, not only to the rest of the colonies (states) but overseas. By 1774, Philadelphia alone had more than 300 workers making carriages. Others in Philadelphia, Charleston and Boston were making furniture which was the equivalent of any made overseas. By 1770, there were over 2 million Americans. Mother England was heavily dependent on the new colonies for their taxes. When she fought the French and Indian War, Mother England found herself heavily in debt, and to pay that, she raised taxes on youthful America so much, that we revolted. We won, but fought it with paper money, and once again, history repeated itself, when the “Continental” dollar went to zero, after the presses had their way. From that, came the expression, ’not worth a continental.’
Spanish gold ’dollar’ coins were in circulation, and had been clipped into smaller sizes of halves, quarters, and eighths, from where the term ’pieces of eight’ came, as well as ’two bits.’ Tom Jefferson thought that halves, quarters and tenths were better than eighths, and he coined the word ’dime.’ British shillings stayed around for a while, since the population was increasing faster than the mint could produce US coinage. Shillings were eighths, or twelve and a half cents. “Two Bits” which we still use, then, is a quarter. The Philadelphia Mint was established in 1792, and of course is still in existence. The first official US coin, was made of copper and privately produced. It bore the motto, “Mind Your Business.”
The word ’dollar,’ came from the German ’thal’ or ’valley.’ Major silver deposits were uncovered in Bohemia, (now the Czech Republic), and in 1519, the owner of some of the mines began minting silver coins weighing a Saxon ounce, and were called ’thalers’ or ’from the valley.’ The thaler met with instant success and acceptance, and eventually, the entire Holy Roman Empire used thalers in exchange for goods and services for hundreds of years. “Thaler” became “dollar” in English. Silver coins weighing an ounce were in use for hundreds of years, with no inflation of course. The current Silver Eagle weight is exactly one Troy Ounce, which imitates the old thaler, which was around for centuries. The extinct US silver dollar never weighed a full ounce, but has .77344 of an ounce of pure silver plus alloy to harden it. Silver dimes have .07234 ounce of pure silver plus alloy to harden them. Silver quarters have .18084 of pure silver in them, plus alloy harden them, and silver halves have .36169 of pure silver in them plus alloy to harden them.
Dollars are still around, and for some strange reason are still considered the ’reserve currency of the world.’ In other words, oil, gold, silver, and a few others are still priced in dollars. How long this will remain is unknown. In the good old days before FDR, the dollar was a twentieth of an ounce of gold. For over a hundred years, gold was $20.67 per ounce. FDR, after trying to collect America’s gold to facilitate his programs to get America out of the first great depression, then raised the price of gold to $35 per ounce, thereby robbing American citizens of billions of dollars. Raising the price of gold, actually devalued the dollar, and it is still being devalued rapidly by endless printing of it. Gold and silver prices are no longer controlled by governments, but the market prices them, as the market prices oil and virtually everything bought with a currency.
All currencies are doing down in value, because all governments possess that typical universal governmental habit, and that is the habit of spending far more than they take in, never balancing its budgets, and taxing everyone by devaluing currencies. The ’buck’ has been used as a slang word for dollar for a long time. It is thought to have come from ’buckskin,’ when Indian traders in the old west, bought buckskins for dollars. Just remember, no paper money in history, regardless of time or nation, has ever survived. All have originally gone to zero, and it has happened three times in America already. The Continental, Greenback, and Confederate currencies all went to zero because of being printed by governments to pay for excesses and wars. The buck or dollar has lost about 98% of its value in the last 75 years, and it still goes down, which means prices still go up, and will go up. So, why save surplus assets in dollars? Why set to sea in a leaky boat? Why buy a home which is full of termites? Why buy a car with a bad engine? All are utterly stupid.