does anyone know why...
secondrepublic
Posts: 2,619 ✭✭✭
Why are pre-1930s gold coins from most of the world close -- but somewhat "off" -- the precise
For example, a U.S. double eagle has .9675 oz. pure gold. Why not a full oz.? Same for the $10 eagles, they have .48375 oz. pure gold -- why not have 1/2 ounce?
Other examples -- UK sovereign has .2354 oz. The Swiss and French 20 francs has .1867 oz. What was the reason for having these weights set in that way, rather than an "even" number?
For example, a U.S. double eagle has .9675 oz. pure gold. Why not a full oz.? Same for the $10 eagles, they have .48375 oz. pure gold -- why not have 1/2 ounce?
Other examples -- UK sovereign has .2354 oz. The Swiss and French 20 francs has .1867 oz. What was the reason for having these weights set in that way, rather than an "even" number?
"Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
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—metal coins—arises from the difference between the face value of a coin and the cost of production.... and government profit.
$20 Face with a bit less than $20 worth of metal in it .... [at the time].
Same for the other coins.
Keep on Stack'n!!
********************
Silver is the mortar that binds the bricks of loyalty.
—metal coins—arises from the difference between the face value of a coin and the cost of production.... and government profit.
$20 Face with a bit less than $20 worth of metal in it .... [at the time].
Same for the other coins.
Thanks SB, I didn't know that.
Added: And thanks, Comrade Renski - cool site!!
I knew it would happen.
--Severian the Lame
<< <i>Why are pre-1930s gold coins from most of the world close -- but somewhat "off" -- the precise
For example, a U.S. double eagle has .9675 oz. pure gold. Why not a full oz.? Same for the $10 eagles, they have .48375 oz. pure gold -- why not have 1/2 ounce?
Other examples -- UK sovereign has .2354 oz. The Swiss and French 20 francs has .1867 oz. What was the reason for having these weights set in that way, rather than an "even" number? >>
At the time that the US coins were being made gold cost $20.67 per troy ounce. So 0.9675 times $20.67 == $19.998225 or twenty bucks.
I dunno about the foreign coins but I imagine it is a similar situation.
<< <i>Why are pre-1930s gold coins from most of the world close -- but somewhat "off" -- the precise
For example, a U.S. double eagle has .9675 oz. pure gold. Why not a full oz.? Same for the $10 eagles, they have .48375 oz. pure gold -- why not have 1/2 ounce?
Other examples -- UK sovereign has .2354 oz. The Swiss and French 20 francs has .1867 oz. What was the reason for having these weights set in that way, rather than an "even" number? >>
For many centuries, most if not all countries used a local unit based on silver. Somebody arbitrarily picked a conveniently sized amount of silver and declared it to be the standard. The Joachimsthaler happened to contain slightly over 3/4th of an ounce of silver. The large silver coin proved popular, and was imitated in many other countries, including New Spain. The Spanish-American 8 Reales was widely used, and became the model for our silver dollar of 1794.
The weights of our larger denominations were set at the current gold value equivalents of 2.50, 5 or 10 silver dollars. This led to some very odd but very precise gold coin contents. Eventually the ratios had to be adjusted to reflect changes in the ralative values of gold and silver, and after 1834 it so happened that 0.48375 tr. oz. of pure gold was the monetary equivalent of 20 silver half dollars, there being no silver dollars at the time.
When it was decided to add a larger gold coin for convenience sake after the California gold rush began, they just doubled 0.48375 and got 0.9675, which happens to be close to an ounce.
With the large gold finds of the 19th century it might have made sense to create a new denomination, let's call it the Republic, where one Republic contained exactly one troy ounce of pure gold, but then every coin already in circulation would become obsolete and need to be recoined at great expense. Everybody was happy with the dollar coins and their multiples, so why rock the boat?
The British sovereign at 0.2354 tr. oz. likewise derived from the gold equivalent of a certain measure of silver, as did the Austrian 100 Coronas at 0.9802 tr. oz. The similarities to round troy ounce fractions and ounces are just coincidence.
The first logical gold coin system was the Mexican gold, where the 50 Pesos contains exactly 37.50 grams of pure gold, the 20 Pesos 15.0 grams, the 10 Pesos 7.50 grams, etc. This put the 20 Pesos close enough to the U.S. $10 that they could have circulated together in the border regions, like the silver Pesos of the time and U.S. half dollars, but again the similarities are coincidence.
TD
gold content [times] gold value/T oz [equals] face value of coin.
<< <i>0.9675 x $20.6768 = $20.004804
gold content [times] gold value/T oz [equals] face value of coin. >>
The $20.6768 value for gold at the time was not really a market-determined price; it was set by the government. The real market price for gold may have been similar, but at times I am sure it fluctuated, such as when gold was found in California. The government could have just as easily had $20 equal one full ounce of gold. Or had $40 or $100 equal an ounce of gold, or any other figure. Switzerland for example set the franc at 100 to approx. one ounce (though again, not exactly one oz.).
In international trade ALL gold was valued at $20.6768 per 0.999 fine T Oz., regardless of form.
<< <i>
<< <i>0.9675 x $20.6768 = $20.004804
gold content [times] gold value/T oz [equals] face value of coin. >>
The $20.6768 value for gold at the time was not really a market-determined price; it was set by the government. The real market price for gold may have been similar, but at times I am sure it fluctuated, such as when gold was found in California. The government could have just as easily had $20 equal one full ounce of gold. Or had $40 or $100 equal an ounce of gold, or any other figure. Switzerland for example set the franc at 100 to approx. one ounce (though again, not exactly one oz.). >>
The government had no control over the price of gold, which was a world-wide price. The government could have adjusted the weights of the gold coins so that $20 face contained one ounce pure, but as I said why bother? There was no benefit to be gained by it, and much expense in recoinage to lose.
People could do arithmetic back then. Any good clerk worth his salary could do the longhand arithmetic and tell you how much gold was in $23,638.50 face value U.S. Specie, but again, why bother? Just report the $23,638.50 and everybody knew what you were talking about.
TD
Captain, I would be curious whether people in the 1800s thought much in terms of gold in ounces/grams. Those measurements of weight simply may not have been important back then with respect to gold/silver. It may be, as you suggested, that it's really just a coincidence that the $20 gold double eagle has almost an ounce of gold, etc. etc.
Naturally, there would be unusual variations during short, unusual situations - including the Franco-Prussian war. But, in general the price was stable.
For TD: ALL the governments supporting the gold standard followed the same nominal price of $20.6768. It was a government controlled price, not a free market price.
Please forgive me for nitpicking the king of specs, but .48375 is the law of 1837, not 1834. The 1837 weight was 1.000862069 that of the 1834 weight and .938181818 of the 1792 weight.
Incidently the Mint Report of 1962 gives $20.67183462 as the monetary value of gold from 1837 on, not 20.6768
<<0.9675 x $20.6768 = $20.004804>>
.9675 x $20.67183462 = $19.99999999
US Clad coinage including cupro-nickel Ikes is $20 per pound.
Previously, 1873-1964, subsidiary silver coins were 25 grams per dollar.
US nickels are 5 grams
Canadian nickels (5 cent pieces) (at least until recently) are 100 nickels to the pound.
Latin Monetary Union silver coins were 5 grams per unit (Franc, lira etc.). When silver got expensive the fineness was reduced to .835 but the 5 unit pieces remained .900.
I have read that the original pound sterling of 240 pennies (20 shillings x 12 pennies) in the very old days did weigh a pound troy of 240 pennyweight (12 ounces x 20 pennyweight).
<< <i>The legal monetary value is what relates to the content of a coin, nothing else. BTW, the open market price of gold fluctuated very little from the monetary value simply because the metal could be easily obtained for that price. As the cost of labor and equipment increased over time, gold mines went out of business - the metal they could mine was worth less the the cost of production.
In international trade ALL gold was valued at $20.6768 per 0.999 fine T Oz., regardless of form. >>
$20.67+ was merely the local expression of the price of gold. In England it was pounds sterling4/4/8+ or in France 107.12+ Francs. In Imperial Russia it was 26.78+ Roubles for a while, but then they devalued the Rouble by one thind and all of the sudden it was 40.17+ Roubles without the "price of gold" having changed. What changed was the price of Roubles.
Had the U.S. adopted one of the various International Monetary suggestions of the 19th century the price of gold in dollars would have changed, but only because the dollars themselves changed.
TD
<< <i><<The weights of our larger denominations were set at the current gold value equivalents of 2.50, 5 or 10 silver dollars. This led to some very odd but very precise gold coin contents. Eventually the ratios had to be adjusted to reflect changes in the ralative values of gold and silver, and after 1834 it so happened that 0.48375 tr. oz. of pure gold was the monetary equivalent of 20 silver half dollars, there being no silver dollars at the time.>>
Please forgive me for nitpicking the king of specs, but .48375 is the law of 1837, not 1834. The 1837 weight was 1.000862069 that of the 1834 weight and .938181818 of the 1792 weight.
Incidently the Mint Report of 1962 gives $20.67183462 as the monetary value of gold from 1837 on, not 20.6768
<<0.9675 x $20.6768 = $20.004804>>
.9675 x $20.67183462 = $19.99999999 >>
You are correct.
I always remember the great recoinage of gold in 1834, and forget that when they rounded off the fineness in 1837 they changed the net weight slightly, unlike the silver coinages where the rounding of the fineness did not change the net weight.