Although experiments with paper money did occur throughout the early history of the country, they were largely unsuccessful. People, for good reason, didn’t trust the notes and preferred gold and silver coin. In 1861, the North, needing money to finance the civil war it started, authorized the issuance of what came to be known as “Greenbacks,” and were in denominations of $5, $10, and $20. The first $1 bill was printed in 1862 with a portrait of Salmon Chase, the Secretary of the Treasury under Lincoln. The South also needed money to finance their side of the war, and issued Confederate bills. Neither of the currencies were backed by anything, and by the end of the war both had become virtually worthless. Confederate bills are highly collectable today.
Gold certificates (paper money) were first issued in 1863, and held back till the war was over in 1865. The ‘great depression,’ which began with the market crash in 1929, caused a severe economic crisis in the 1930’s, which caused runs on the banks by depositors who demanded gold for their gold certificates. Naturally, the ever faithful government, even back then, quickly called in the gold certificates, and to further give ‘faith and credit,’ as the bills don’t say, because they have none, it became illegal to own gold bullion or gold certificates. This law was finally repealed in 1974, and this gave birth to citizens holding gold. I got started in November, 1977.
Silver certificates were first issued in 1878, in exchange for silver dollars. They were paperweight rather than .91 ounce of silver plus .09 ounce of copper each for a dollar. Silver certificates were redeemable in physical silver until the early 1960’s when there was a severe silver shortage. I still have a little envelope with grains of silver in it when I sent in a silver certificate for physical silver. Congress decided to eliminate all real money in circulation in 1964, by ceasing to make quarters, dimes and halves out of 90% silver. Today, a silver dime is worth $1.20.
In 1963, dollar bills became ‘Federal Reserve Notes,’ rather than ‘Silver Certificates,’ but many of the designs on the bills date back to 1929, when all of the currencies were changed to their current design and size. In 1957, the $1 bill became for first U.S. currency to bear the motto, “In God We Trust.”
Congress passed “Legal Tender Laws” in America, and for that matter such laws exist all around the globe. After all, no government wants its currencies to be what they actually are, and that is a debt, which I’ll get into next week, and to make their worthless currencies worth something, they make it illegal to transact any business with any other means other than their issued currencies. Can we barter with gold and silver? Of course, if you can find someone who has something you want, and they will accept real money (gold and silver) for what they have to offer. Throughout history, not a single paper currency has survived. Not a one. Our dollar has already lost 95% or more of its purchasing power of a hundred years ago. Why? Because Congress insists on spending money it doesn’t have, and prints more to pay its bills. This is inflation, and has been the cause of most nations’ failures in history. It will eventually make the buck totally worthless, regardless of legal tender laws, but I doubt that this is in the immediate future. This is why Colorado Gold sells silver and gold at a 1% profit, and we include shipping as well. Plan for the future and get real money which needs no backing as it has value in itself, and can be redeemed in any currency in the world. – Don Stott 1-888-786-8822