Why did some coins reappear in the 20's after several years absense?

oldwestgold

Morgans, Saints, $2.5, $5, $10 gold. Did this have something to do with WW1?

RWB

Most countries went off the gold standard during WW-I. The U.S. was off from 1917-1919. Very little gold coin circulated even in western states. The U.S. reentered a modified gold standard in 1920 and Great Britain in 1925, but the new version did not work very well and collapsed in the early 1930s.

ProofArtworkonCircs

There was a deliberate push to circulate gold or gold certificates in 1922. It was felt that the Federal Reserve Banks had too much in the way of gold reserves.

I would say this policy came back to bite them in 1933 when there was much hoarding going on between the November 1932 election and the March inaugaration. The FRB's with the 40% gold reserve requirements for Federal Reserve Notes's were at their limit and there was an emergency issue of Federal Reserve Bank Notes which required no gold backing.

DaveG

Are you speaking of mintages or circulation patterns?

If you're speaking of mintages, the reappearance of the Morgan dollar in 1921 was due to the Pittman Act of 1918, which called for the melting of 270.2 million silver dollars (the silver was sold to the British and shipped to India) and their subsequent replacement with newly minted silver dollars. Essentially, the Morgans were minted until the Peace dollar design was ready to replace it.

As for the gold coins, there may have simply been less demand for gold coin during WWI (since our commerce with Europe was disrupted) or there may have been controls placed on the export of gold coins. In any event, it appears that demand for gold coin didn't re-emerge until the 1920s.

Edited to add: ProofArtworkonCircs, can you point to some documentation of the 1922 policy?

ProofArtworkonCircs

DaveG

I read that history somewhere. I think it is a book I have in the house. It will require a little digging to find it.
In the meantime my catalogue of paper money shows Eliott - Burke served as signing treasury officials 11-21-1919 thru 1-5-1921
and Eliott - White served 5-2-1921 thru 1-24-1922. There were no gold certificates issued with these signatures.
Gold certificates were made legal tender for all debts public and private in 1919. The first notes to show this were series 1922 signed by Speelman - White.

ProofArtworkonCircs

Found it. A Monetary History of the United States 1867-1960 by Milton Friedman and Anna Jacobson Schwartz, Princeton University Press, 1963. See page 249 the line referencing footnote 10, footnote 10 itself, and footnote 10 references. This references Benjamin Strong, Interpretations of Federal Reserve Policy, 1930 and Lester V. Chandler, Benjamin Strong, Central Banker, 1958.

The Fed paid out gold certificates to reduce the high reserve ratio which was 65% gold versus its notes and deposit liabilities.

DaveG

ProofArtworkonCircs,

Thanks for the reference!

Actually, I don't have that book (as my main research focus is the period between the demise of the Second Bank of the United States and the Civil War), but I can get it easily enough.

Is Friedman asserting that the Fed was putting gold certificates into the channels of commerce instead of Federal Reserve Notes or United States Notes?

ProofArtworkonCircs

I neglected to include the page references from the footnote 10 mentioned in my last post.

Strong's book was pp.300-302 and Chandler's was 192-193.

ProofArtworkonCircs

DaveG

The answer to your last question is YES.

ProofArtworkonCircs

I interpret that all to mean that a portion of cash received from a FRB was gold certificates. I assume the FRB was still issueing FRN's at the same time. LLoyd, an old time banker, observer and writer commented on the sudden reappearance of gold certificates in circulation. He also reported seeing a 1928B gold certificate in circulation (printed but otherwise unknown). He didn't keep it because of its condition and figure he could get an unc later.

DaveG

Proof,

"Lloyd"?

Can you give me specifics? I think I'd like to read what he's written!

ProofArtworkonCircs

I am sorry. I havre read comments by him over the years and he once published a book or booklet on 1929 Federal Reserve Bank Notes,
But I don't remember just where or when now. His stories were fascinating.

ProofArtworkonCircs

DaveG

Your period of research sounds interesting. In 1837 surplus treasuy funds were sent to the states. The state of Maine felt rich enough already, so they passed it on to the towns and cities based on population. Most towns had a town meeting and decided not to reduce taxes which would reward the absentee landlord, but to distribute it to the people including children (but paid to the parent). Thus my paternal grandparents (born in the 1820's) and their parents benefited.

DaveG

Proof,

I think it's a very interesting period - it's got the Hard Times, the Gold Rush, Mississippi riverboats, "broken" banknotes, etc. etc. So far I've published two articles on how gold coins circulated andhow commerce was conducted in the period (the second was about twice the length of the first) and I've done enough additional research to double the article again.

That's a great story by the way - possibly our first example of income redistribution!