Brief Overview - U.S History of Money (Silver was the foundation for many years)
1690-1764 - The first experiment of paper money in U.S was Colonial notes. Colonists were said to have preferred gold and silver as money but they brought very little with them to America. Colonial notes worked well for many decades. By the 1750s, the British started to step in and places laws on the Colonists that they could not issue their own money. Colonists wanted their independence and did not want restrictions/laws placed on them from the British so they eventually fought back.
1775 - The continental currency became the second experiment of paper money shortly after the Revolutionary War started. Four years later it was worth a penny and then became worth nothing. A saying originated "Not worth a Continental." Reasons for the decline range from too much currency issued and a lost of confidence from the American people.
George Washington - "They may pass a law to issue paper money, but twenty laws will not make the people receive it.
1785 - Origin of the dollar originated and contained 371.25 grains of fine silver. This means a dollar had roughly 3/4 of an oz of silver. What happened to silver in today's dollar?
1787 - September 17. The United States Constitution was formed. Article 1 Section 10 of the U.S Constitution states: "No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit make any Thing but gold and silver Coin a Tender in Payment of Debts"
1791 - February 25. The United States first central bank was formed, this lasted 20 years. America's first central bank was located in Philadelphia, Pennsylvania.
1792 - Coinage Act. Silver to Gold weight ratio was set at 15 to 1.
Penalty of Death for de-basing the coins. Section 19. And be it further enacted, that if any of the gold or silver coins which shall be struck or coined at the said mint shall be debased or made worse as to the proportion of the fine gold or fine silver therein contained, or shall be of less weight or value than the same out to be pursuant to the directions of this act, through the default or with the connivance of any of the officers or persons who shall be employed at the said mint, for the purpose of profit or gain, or otherwise with a fraudulent intent, and if any of the said officers or persons shall embezzle any of the metals which shall at any time be committed to their charge for the purpose of being coined, or any of the coins which shall be struck or coined at the said mint, 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.
1794 - The first silver dollars were minted.
1816 - The Second Bank of the U.S was formed and had a 20 year charter renewal. The central bank was located again in Philadelphia, Pennsylvania.
1834 - Coinage Act. Changed the silver-to-gold weight ratio to 16 to 1.
1835 - January 8th the U.S national debt was paid off. Andrew Jackson became the only U.S president to accomplish this great feat. Jackson took power away from the banks by passing a law that required all land sales to be in gold. The banks did not lend out gold thus the Second Bank of the U.S went bankrupt by 1841.
Andrew Jackson famous quote - "If people understand the rank and injustice of money and banking system, there would be a revolution before tomorrow morning.”
1837-1862 - Free Banking Era.
1860s - Civil War Period. President Abraham Lincoln used paper money called "greenbacks" to fund the war. Greenbacks were issued by the government and replaced private central bank paper money. Lincoln admitted that the government can create money out of money and not pay interest on the greenbacks rather than the government pay interest to the banks for money they create out of nothing. The banks did not support Lincoln's greenbacks.
1863 - National Banking Act. This created many national banks rather than one private central bank that issued currency.
1873 - Coinage Act. Silver was demonetized and limited by banks from being used as money.
1878 - Silver Certificates were first used as representative money and/or commodity-backed money.
1890 - Sherman Silver Purchase Act - This act increased the amount of silver that the government purchased every month. This act was repealed in 1893.
1896 - William Jennings Bryan started "the free silver movement" which wanted to control the supply of money with silver playing a role in helping limit the amount of money issued by the government. The movement was supported by many farmers, miners and those who did want to be affected by inflation. Bryan favored a central bank with the public control rather than banker control.
1913 - The Federal Reserve Act signed by President Woodrow Wilson created America's third central bank "The Federal Reserve" on December 23, 1913. The Federal Reserve is located in Washington D.C. Most congressman were gone on vacation when the Federal Reserve Act was signed. President Woodrow Wilson admitted he had betrayed the country by allowing the FED to be created. This private institution rules with little knowledge and/or approval of Congress and the FED has never been audited or checked. Important to note: The Federal Reserve is nor more Federal than Federal Express and does not have a relationship with the Federal Government it is an independent agency as admitted by former Federal Reserve chairman Alan Greenspan.
Important to note: This system relies on perpetual debt. Every dollar must be borrowed into existence through lending by the banks. If every American paid off their debts there would be no money.
1934 - Gold Reserve Act. President Franklin Delano Roosevelt made gold illegal to own within the United States. Foreigners could redeem their paper money for gold. Side Note: The U.S experienced much deflation in the 30's because our money supply was contracted.
1940s - The electronic age started to take off and silver started to become consumed more and more each year to meet demand. The U.S government held about half of the world's silver an estimated 5 billion ounces at this time.
1963 - President John Fitzgerald Kennedy was said to have issued an executive order to issue silver. The amount of silver he wanted to issue was a rather small amount compared to the national debt at the time.
Famous JFK quote: Our problems are man-made – therefore they can be solved by man.
1964 - U.S went off a Silver Standard. The dollar was no longer convertible to silver coinage (silver certificates ended) which included half dollars, quarters and dimes (all 90% silver).
1965-1969 - Silver content was reduced to 40% for Kennedy half dollars.
1971 - President Richard Nixon took the U.S off the Gold Standard. The dollar was no longer convertible to gold. Since 1971, the U.S and the world has been a dollar system where the majority of the world use dollars to trade for good and services.
1974 - December 31 - American's were allowed to own gold again.
1971-1980 - Silver rose from about $1.50 - $50 per ounce. The Hunt Brothers - wealthy oil men from Texas became famous for driving the price of silver up during this time period.
Gold rose from $35 - $850 per ounce.
In 1980, we neglected to control the price of gold. That was a mistake.” Former FED chairman Paul Volcker
1986 - The U.S government started making silver bullion coins called “American Silver Eagles.” These coins are one-troy ounce of silver and have a face value of one dollar.
1998 - Alan Greenspan (former Fed chairman) during a Congressional testimony states “Central banks stand ready to lease gold in increasing quantities should the price rise.”
2010 - The Federal Reserve made a record profit of $82 billion, meanwhile the U.S government was well over a trillion in the hole.
2011 - January 19. Alan Greenspan states "we now have fiat money - money printed by a government and it is usually the central bank that is authorized to do so. Some mechanism has to be in place that restricts the amount which is either a gold standard, currency board or something of that nature. All of history suggests without some restrain (on money) you have very drastic effects on economic activity.
Today - There is less silver available for investors to purchase than gold. The United States is the largest debtor in the history of the world. The Federal Reserve System has achieved its objective of perpetual debt as money meanwhile the FED collects interests and profits off the interest of the debt.
Since 1913, the dollar has lost 97% of its purchasing power and/or better phrased its only worth 3 cents since 1913!
Silver in 1913 = $1.29 per troy oz. June 2011 = $35 per troy oz (figure will be outdated soon)
Gold in 1913 = $20.67 per troy oz. June 2011 = $1500 per troy oz (figure will be outdated soon)
Gold in 1913 = $20.67 per troy oz. June 2011 = $1500 per troy oz (figure will be outdated soon)
This short view of history hopefully has you a little more comfortable and happy in your decision to own silver. “The Silver School” did not write this in an attempt to scare you, this was just to inform you. Silver can be a person's security to an uncertain monetary system in America.
Rock, Paper, Silver? The choice is yours but history shows those who have held silver improved their standard of living over time and you can as well by buying silver!
Disclaimer: Silver did not pay "The Silver School" to write this.
Later on, we will take a world-wide look at silver!
Important to note: Rock, Paper, Silver is a business in Banff, Alberta.