Hi,
I was looking into something else and found an issue I had net really considered before even though I had known most of the parts.
1) The Continental Congress issued "Continentals" as the currency of what became the United States to pay for the Contenental Army.
2) These were printed almost when needed and so by the end of the Revolutionary Way the value of a Contenental was so low it was worthless. People demanded Spanish coinage (among others) that had eight (8) bits to make a doubloon. [This is the origin of the references to "bits" - 8 bits are a dollar.]
3) Aware of the problems with the Continental being worthless were attemted to be directed in the Constitution in such wording to say that there must be specie to back up ever piece of paper money in circulation. I think it also specified that the paper money was to be redeemable for specie but this might be in the Teasury Act that set up the US Dollar's workings.
4) The value of the US Dollar was set at something like $34 per ounce (troy or regular?).
5) There were economic swings (inflation and deflation) between 1784 and 1932 with the base line value of $34.00 per ounce.
6) With the on set of the Great Depression, FDR was elected for change. One of his first acts (by presidential order) was to change the way the dollar functioned. Silver Certificates were no longer honored. (I am not sure if there were ever gold certificates.)
7) Inflation and deflation still occured even though the dollars could not be redeemed for silver. Gold was set at $34 per ounce.
8) Between 1932 and 1964, things were still as stable as pre-1932.
9) In 1964 the minting of silver for coinage ran into a problem. The demand for coinage was increasing and the supplies of silver were running low.
With respect to the total available silver in the world, the mining of silver was neglidgable Maybe 0.01%? Gold was the same way. The cost of minting coinage had risen to the point that the cost of minting silver coinage had becoming a loosing proposition.
10) When January 1, 1965 occured, silver coinage was still made using the 1964 dies (the same style and lettering). In 1965, a clad sandwich of different metals occured. These clad coins used used the 1965 dies. Only the Kennedy half dollars still had silver (40% instead of 90% for pre 1965 coins). With the change in materials, the US government could make a small profit minting coinage (the difference between the coinage value and the value of the raw metal plus the minting and the cost of distribution).
11) In 1970, Kennedy half dollars had their silver removed and went to the same metals as the dime and quarter.
12) in 1973, The Arab Oil Embargo occured. This external threat to the US economy caused Richard Nixon to take some very non-Republican actions including wage and price controls. The item here is that Nixon took the final step that FDR started in 1932 (again by executive order) and allowing the price of gold to float - it was no longer tied in any way to the US dollar.
13) The US Dollar has been fluctuating between 1973 and today.
The inflationary tables offered to calculate the value of the dollar from pre-1973 and now does
not seem to include a varying base line - that value of gold whach has varied between $100 and over $1,000 per ounce.
So a ticket for the Silverton in 1972 might or might not be correct when using inflation tables to get Today's "value" - the varying baseline agument.
I do recall that my first job was in the summer of 1972 at McDonalds for $1.65 per hour. My second job as a "blue line boy" at a civil engineering company in the summer of 1973 at $4.50 per hour did not seem to have the same
buying power.
Another interesting item is that the manpower intensive track laying in the 1800s was sometimes quoted as being about $100,000 per mile. Today's automation intensive track laying using fewer men is sometimes said to be $1,000,000 per mile. I wonder what a mile would cost using the same techniques? The labor intensive 1880 style could be $100,000,000 per mile today due to the cost of labor alone.
I bring this as a little tidbit for consideration so that today's railroad hobbyists might have a little background they might not have been exposed to.
FWIW
Doug vV
I also think it is interesting that this is a case of forgetting history by the collective mind of the government. Obama spent like money grew on trees. The Contenental Congress did the same. The Congress under the Articles of Confederation formed a commettee to try to fix the Articles of Confedeation. That Comittee tried to learn from the mistakes when the Constitution was written. It was just forgotten. FYI, the AMEX lists gold at $1,254.30 per ounce as or 1:42AM April 21, 2016.
It took a lot of hard work to get out of the 1700's mess and I think it will be in the future to clear out the current $++15 trillion dollar debt we are now saddled with.
Edited 1 time(s). Last edit at 04/20/2016 11:52PM by dougvv.
