Commercial Value of Gold and Silver coin

[Pottapaug1938]

Earlier today, I came across a copy of the Old Farmer's Almanac from 1863, which I bought among others (with publication dates between 1815 and 1889) about thirty years ago. On pages 4 and 5 are two tables which are rather fascinating.

The one on page 4 bears the title which I used for this thread. It gives the commercial value of foreign coins, which is unsurprising; but it also gives the commercial value of U.S. coins. Silver coins minted after 1853, and gold coins minted after 1834, are acceptable at par; but silver coins minted in 1852 or earlier trade at a premium of 1/4% per 25 cents, due to their higher silver content; and gold coins minted in 1834 or before which bear the motto "E Pluribus Unum" over the eagle on the reverse carry a premium of between 5 and 6 cents per dollar, due to their gold content. $10, $20 and $50 gold pieces issued by the U.S. Assay Office in 1852 and 1853 are discounted 2, 1 and 1/2 percent respectively (von Nuthouse, take note).

The table on page 5, which has its counterparts in many other old OFAs, lists "Worthless and Uncurrent Bank Notes in New England". A few of these notes are worth as much as 95 cents on the dollar; but most which are worth anything are worth only 5 cents on the dollar. About 3/4 of the list is devoted to completely worthless notes.

I've also seen special circular publications which are completely devoted to current news on both topics. At any rate, it's things like this that come to mind when the gold/silver bugs, and people like von Nuthouse, make their appearances on stage.

[Pottapaug1938]

This morning, I was also thinking about the "chopmarked" silver coins which passed through Asian markets in days of old. A merchant who received a silver coin would test its fineness; and if it passed muster he would take a distinctive metal stamp, known as a "chop", and mark the coin to certify that, in his opinion, it was worth the stated amount. Many silver coins are known to be quite disfigured by the chopmarks; and I've seen one in the Peabody Museum in Salem, Massachusetts, which was pounded into a cup shape by the chopmarks.

If von Nuthouse got his way and "alternative currencies" like the Liberty Dollar ever truly entered circulation, the mind reels at the number of expertly-struck counterfeits which would soon flood the market, and at the way that teenage register clerks would be required to perform weight and purity tests on these (ahem) "coins"....

[notorial dissent]

and at the way that teenage register clerks would be required to perform weight and purity tests on these (ahem) "coins"....

Yeah, like that is going to happen, considering that most of them can't even make change without the help of the cash register.

The value of the coin was always one of the issues with our early mintages, as it varied from time to time and mint to mint, and was allegedly one of the reasons the mint took over what became the Denver mint instead of prosecuting the owners for counterfeit, as they were producing coins that were worth more than their face amount and were as good or better quality than what the two official mints were doing.

[fortinbras]

I had said before that Von NotHaus's (NORFED) "drachmas" are wildly overpriced.

To begin with, NORFED was selling them always at least 50% above the market price for the precious metal; when the price of the metal itself went up, NORFED raised its own prices (to be paid in FRNs).

Second, unlike the US Mint's Silver Eagle or Gold Eagle, or the Canadian Mint's Gold/Silver Maple Leaf , or the RSA's Kruggerands, which are all supposedly the same weight and purity, the NORFED drachma is not guaranteed by law to have its claimed weight and purity. Essentially, with NORFED's 'coins" (and the similar homebrew gold/silver 'coins' being issued by a few other outfits - one of them purports to be an Indian tribe), we are thrown back onto the old Chinese chop system - each recipient must test the weight and purity to satisfy himself and knowing whoever takes the coin from him will have to do the same. This means that NORFED 'coins' will have to be SEVERELY discounted - to cover the testing, the bother of doing the testing, and the difficulty of finding someone willing to accept the same coin. All in all, this means, as a medium of exchange, the NORFED and similar homebrew coins will have buying power of perhaps only half of the FRNs originally paid to NORFED for them.

But I think NORFED currency served another purpose, besides pretending to be a medium of exchange that would somehow bring down the Federal Reserve System. The NORFED drachma served to conceal assets from the IRS, creditors, ex-wives and the like. A client gets paid in FRNs, immediately spends them to buy NORFED coins or at least the pretty colored paper that was a "warehouse receipt" for a NORFED drachma. Now it's no longer countable money. It's become invisible to the IRS, creditors, ex-wives, et al.. When the client needs spendable cash he might take the NORFED drachma down to the coin shop to see if he can get anything for it, or else he returns it to NORFED for a refund (minus some s&H) in FRNs. Similarly, if someone wanted to secretly transmit a substantial sum of cash, he'd buy up NORFED funny money (either the coins or the warehouse receipts) and transfer them to his recipient who would cash them in. Whatever money he lost in the transaction -- the overpricing of the metal, NORFED's processing fees, etc. -- is mere viggorish, an acceptable expense for keeping his money hidden in NORFED's warehouse bank.

[notorial dissent]

The NORFED funnies, were never really guaranteed to be anything other than what von Nut burt claimedthey were, and we know what a font of reliabilty and veracity he was. Bother being the least of it, uncertainty as to quality and value being the main things, since there is no guarantee of any kind that they are not simply plugs sprayed with pretty paint. I will admit that I am not willing to give Nutty the benefit of the doubt as to his hallmark, but then I wouldn't be any more trusting with anyone else, so he is getting equal treatment there, whereas, I will trust the gov't offices unless and until I find some valid reason not to.

What it amounts to, is that as a medium of exchange the NORFED slugs, and any others for that matter would, or at the very least, should be highly suspect, and therefor not a ready trade item.

I think your second point is equally valid, as that is certainly what it appears the NORFED stuff got used for.

I had said before that Von NotHaus's (NORFED) "drachmas" are widely overpriced.

To begin with, NORFED was selling them always at least 50% above the market price for the precious metal; when the price of the metal itself went up, NORFED raised its own prices (to be paid in FRNs).

Second, unlike the US Mint's Silver Eagle or Gold Eagle, or the Canadian Mint's Gold/Silver Maple Leaf , or the RSA's Kruggerands, which are all supposedly the same weight and purity, the NORFED drachma is not guaranteed by law to have its claimed weight and purity. Essentially, with NORFED's 'coins" (and the similar homebrew gold/silver 'coins' being issued by a few other outfits - one of them purports to be an Indian tribe), we are thrown back onto the old Chinese chop system - each recipient must test the weight and purity to satisfy himself and knowing whoever takes the coin from him will have to do the same. This means that NORFED 'coins' will have to be SEVERELY discounted - to cover the testing, the bother of doing the testing, and the difficulty of finding someone willing to accept the same coin. All in all, this means, as a medium of exchange, the NORFED and similar homebrew coins will have buying power of perhaps only half of the FRNs originally paid to NORFED for them.

But I think NORFED currency served another purpose, besides pretending to be a medium of exchange that would somehow bring down the Federal Reserve System. The NORFED drachma served to conceal assets from the IRS, creditors, ex-wives and the like. A client gets paid in FRNs, immediately spends them to buy NORFED coins or at least the pretty colored paper that was a "warehouse receipt" for a NORFED drachma. Now it's no longer countable money. It's become invisible to the IRS, creditors, ex-wives, et al.. When the client needs spendable cash he might take the NORFED drachma down to the coin shop to see if he can get anything for it, or else he returns it to NORFED for a refund (minus some s&H) in FRNs. Whatever money he lost in the transaction -- the overpricing of the metal, NORFED's processing fees, etc. -- is mere viggorish, an acceptable expense for keeping his money hidden in NORFED's warehouse bank.

[webhick]

Hey, did anyone ever actually do a purity test on a LD?

[Pottapaug1938]

One things which just came to mind about the various privately-issued gold coins which could be found, in the U.S. in the mid-19th century, is that the weight and fineness were often somewhat inexact. Some were underweight and contained less gold than they should have contained, some contained more gold than was the standard (such as the Pikes Peak issues); and some were minted to official U.S. government standards. It was common to discount all but the extra-gold pieces somewhat, to take some of the risk out of accepting them.

The San Francisco Mint was set up in 1854, and later the Carson City Mint in 1873, to fulfil the need for a trustworthy gold coinage; and the private issues quickly disappeared, especially after the minting of private gold coins was outlawed in 1864. By the time that the latter mint was closed in 1893, the San Francisco Mint, together with the mints in Philadelphia and New Orleans, could produce what was needed.

[Pottapaug1938]

A lot of the private issues were designed to mimic the appearance of regular US gold coins; but in Miss Liberty's headband, on the obverse, you might see, for example, "POTTAPAUG" instead of "LIBERTY", and on the reverse "UNITED STATES OF AMERICA" would be replaced by a legend consisting of something like "DANA MASSACHUSETTS", "S.M.V. (Standard Mint Value) MASSACHUSETTS GOLD". Some of these are so well made that you have to look closely to see that it's a privately-issued piece.

[The Observer]

Hey, did anyone ever actually do a purity test on a LD?

Isn't that the test that revealed Von Nothaus was full of pure BS?