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Problems with Regulated Gold in Early America?
MrEureka
Posts: 24,790 ✭✭✭✭✭
For those unfamiliar with regulated gold, here’s a nice intro:
http://www.usrarecoininvestments.com/coin_info/colonial_american_coins_regulated_gold.htm
My questions: After the pieces were regulated, what would stop unscrupulous people from clipping the coins and then passing them off at full value? Are there any such clipped pieces still out there in collectors’ hands? Are there any contemporary accounts of this actually happening?
Andy Lustig
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
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Have wondered about that too.
I don't think they were "sold" with a money back guarantee - once they left the shop, they needed to be re-regulated.
Don’t worry, people are still regulating them to this day. It is never too late
Jokes aside I suspect the people who get swindled and the people who know value has remained constant over the centuries and that regulation was more about their business model than protecting the un-protectable
11.5$ Southern Dollars, The little “Big Easy” set
You are of course correct that a gold coin could have been clipped after it was regulated, but the same principle of fraudulent removal of gold was true (via other means such as sweating, filing down the high points, etc.) about any gold coin in circulation. Anybody receiving a gold coin had to execute due diligence by looking at it for signs of tampering and perhaps weighing it.
Gold coins were received predominantly by specie dealers, brokers and bankers - all of whom knew how to assess and value coins. Further, circulation was largely from point to point between regions and internationally, thus restricting the types/educations of people interacting with the money.
The risk encountering adulterated 'regulated' gold was small due to this very limited and expert exposure. Only when gold coins entered broader commercial use, did clipping, sweating and other problems become more prevalent.