Metal Based Money – Don’t Be Discouraged
Everyone has heard people saying gold and silver are real money. Further, if a person has paid any attention they will have heard the USA has had a bimetallic monetary system before the Federal Reserve.
There is another metal used in the “The Coinage Act of April 2, 1792.”
Section 9.
CENTS – each to be of the value of the one hundredth part of a dollar, and to contain eleven penny-weights of copper.HALF CENTS – each to be of the value of half a cent, and to contain five penny-weights and a half a penny-weight of copper.
Further, in Section 12 and 13 the rules by which copper is to be used as a hardening alloy in the Gold and Silver coins is laid out.
Since 1792, Copper has been part of the USA’s monetary system. Which makes this clause in the Constitution seem restrictive.
U.S. Constitution, Article I, Section 10, Para 1: “No State shall…, make any Thing but gold and silver Coin a Tender in Payment of Debts;…”
True, the Coinage Act of 1792 was Federal legislation so the States did not collude in the “make any Thing but” aspect of using Copper. Still, for the first 150 years it is reasonable to assume States paid wages and collected taxes that included Copper pennies and hay-pennies. And it is reasonable to assume that a number of hardheaded Americans who were jealous of their Liberty probably made this point when paying taxes during this time. But, alas, all things taken in consideration, the nuances and semantics were by and large swept under the rug.
Which is not entirely okay. God’s scales are 100% accurate. More to the point, if a person messed around with “The Coinage Act of 1792” the penalty was death.
“Section 19…, every such officer or person who shall commit any or either of the said offenses, shall be deemed guilty of felony, and shall suffer death.”
Serious stakes.
Until the discovery of Gold in California in the 1840’s the U.S.A. was relatively money-poor.
“Our plan is commerce, and that, well attended to, will secure us the peace and friendship of all Europe; because it is the interest of all Europe to have America a free port. Her trade will always be a protection, and her barrenness of gold and silver secure her from invaders.”
Thomas Paine “Common Sense: III. Thoughts On The Present State Of American Affairs.”
This barrenness impelled the Congress in 1806 and 1834 to monetize foreign coins.
Act of 1806 – Foreign Coins
CHAP. XXII. – An Act regulating the currency of foreign coins in the United States”…That from and after the passage of this act, foreign gold and silver coins shall pass current as money within the United States, and be a legal tender for the payment of all debts and demands.”Act of June 25, 1834, – Chap. XCVI. – “An Act regulating the value of certain foreign gold coins within the United States…the following gold coins shall pass as current as money within the United States, and be receivable in all payments, by weight, for the payment of all debts and demands,…”
In neither of these acts was Copper mentioned though I imagine Copper coins were used in those foreign countries.
But that did not stop Copper pennies and hay-pennies from being used. It is a curiosity why, if money was scarce, that more Copper was not used. Because when it comes to getting paid Copper is acceptable.
I recall an instance in High School in 1982 when I lost a $10 bet with an upper classman; yep, I paid in pennies; and yep, I was forcefully impelled to convert the pennies into a $10 FRN. Okay, getting paid in Copper is acceptable in some situations.
Now, pennies in 1982 were still actually made of Copper, they had not been debased. In looking at the value of those pennies today that $10 would be worth $20.52.
$0.0252081 is the melt value for the 1909-1982 copper cent on December 01, 2023.
Talk about a thing retaining and growing in value. The person I lost the bet with should have taken the Copper pennies.
Retaining value is one of the talking points for holding Gold and Silver…especially with the potentiality of societal collapse.
Silver is out of my reach now. Silver rounds are being spot priced around $25.00. That is too much for me to spend. Now, I do have a stash of silver that I bought back when it was around $14.00 an ounce. I don’t have any Gold, {pauses and looks around}, nope I don’t have anything Gold: plated, jewelry or otherwise.
Although I am doing quite well and stable on my homestead, I suppose I could be called poor because I am currently priced out of acquiring Silver or Gold.
There is another option. Copper rounds of one ounce…of which I have a stash too…they are nice looking coins. In looking at APMEX, where I buy coins online, today December 1st, 2023, one ounce Copper Rounds are selling at about $1.79. That is more in my neighborhood.
On May 18, 2019 I bought some “1 oz Copper Round – Incuse Indian” for $1.45 each. Looking at my order history that same coin was $1.03 in March 10, 2016.
How is that for some perspective on inflation. For over 150 years one ounce of Silver equaled $1.00. In 2016 one ounce of Copper equaled about $1.00 FRN.
So there is an option for poor people; one ounce Copper Rounds.
I’d like to delve into the “scrappers” and their place in societal collapse in relation to Copper…and with all the electronic equipment even Gold and Silver can be scrapped……but that would be an unnecessary digression from the point of this article.
Suffice it to say, a one ounce Copper Round in hand is better than $1.79 FRN…because that price is most likely not going to recede. Having a Copper Round is tangible. And looking into the years ahead…it is very likely it will take more and more FRN’s to buy a one ounce Copper Round.
There is hope for poor people seeking to retain value without being discouraged by the high prices in FRN of Gold and Silver.
A couple of things. It was a widespread, acceptable practice to alloy coins intended for circulation with copper. So, in the later laws, when no mention was made of copper in the coinage, other than pennies and half-cents, it was a given that the precious metals coins would be an alloy. Everyone knew it and accepted it (except for those where the coins were more important for their gold content than to be used as intended: Legal tender. I see no discrepancy in the laws there.
On the matter of holding copper, I would not (and do not) hold copper rounds. Copper rounds are a made market. They are bought and sold, mostly through online dealers, along with some face-to-face transactions, and brick-and-mortar stores. From what I am seeing (I check the markets three or four times a week and have alarms for a variety of actions concerning a variety of PMs, industrial metals, currencies, and the like.
I remember the similar rush to sort through change to pick out the real copper coins the same as happened after it was announced that silver coins were going to be replaced with the clad coins.
However, gold in almost any form, and silver in coinage, bulk units, and very high-grade silver furnishings, kitchenware, and similar objects. While there will undoubtedly be some use of copper rounds once the economy is gone, the government is non-existent, and barter and trade are the rule of the day, I do not envision very much use of copper rounds initially. And they will be extremely undervalued because those that are wanting to use them are most likely needing life-saving supplies. Unscrupulous traders will get everything they can for what they have, far out of proportion to what the value of the copper in the rounds happens to be. There is a long history from way back when where copper pennies and the equivalent, along with silver (and some copper) five cent equivalent coins, and a version of a silver dime. All relative to the country in which they were being used. And there were few problems. Because it was all accepted as normal activities.
Now, where it was common to get enough food for a person to eat for a couple of pennies, a couple pennies will not get you much of anything. Of course, that is primarily simply the differences in the times and cultures. However, unless a person knows they are going to get at least as much, if not more, for the copper rounds, they are not going to use them as money. The person getting a dozen of the rounds for only enough food for one person perhaps for one day will not be getting them to buy something else that he might want. They will be held until he/she or someone else comes up with a way to turn the copper into useful items.
Gold and silver, while it will take some time before they make it into the daylight after bartering item for item or service becomes too difficult as it is almost always going to be very local and supplies will disappear. Then silver and gold, especially recognizable coins, will become the currency of choice. Things will be priced with the lowest common coin, probably silver dimes and everything simply priced to a whole dime. No change below that.
However, if enough people have enough of the copper rounds (totaling a few thousand in a community, at least) then they may be used as a sort of place holder for any slight difference in prices that might call for making change. A round would represent that change. And since it is such a small part of overall transaction, I think most people would be fine with giving or taking a copper round as a change marker and then the next time they might have change go the other way will hand it over to that person. While that would seem to indicate that a community would not need all that many copper rounds to do it like that, unless there are plenty available, even if not used, people are not going to want to risk something they value on getting everything it is worth, eventually. (A short time frame eventually, at that.)
Personally, I will be campaigning within the groups with which I am affiliated to use US Mint dollar coins as the common change coin. The small, funny-looking ones. Not the old silver dollars, or the big Eisenhower dollar coins, either. The small-diameter dollar coins now supposedly in circulation. A minted into the coin set value, a known, if not much used, US coin, and small enough to carry several but with little actual value in post-event circumstances.
However, that is just me and the way I hope things go.
And, of course, it is all just my opinion, anyway.
Jerry
Jerry D Young
Hope for the best, prepare for the worst, and always remember TANSTAAFL
(“There Ain’t No Such Thing As A Free Lunch” Manny, from The Moon Is A Harsh Mistress by Robert A Heinlein
Thanks for the comment. In referencing past laws and history I was not aiming to spotlight anything wrong; just laying out the history for perspective.
Yes, I was not suggesting Copper Rounds replace Gold and Silver…but they would have their place as you say for “Change Makers” or smaller transactions.
And, it is cheaper to invest in Copper Rounds and at least have something tangible with a hope of retaining or gaining in value…than the other pricier items.
Best regards!