When Money Was Money

"This certifies that there has been placed on deposit in the treasury of the United States of America five silver dollars payable to the bearer on demand."

How quaint things were in those days. 

I still recollect silver certificates from my youth, although by then Lincoln had long replaced the Indian, and the gold certificates were out of circulation.  Still, there were silver dollars also in circulation, the great big cartwheels that my mother's aunt used to give us on our birthday.  The half-dollars and quarter-dollars were also actual silver; and the dimes as well.  The coins were big and heavy and felt like money.  Before my time there were twenty-dollar gold pieces and the like. 

Nowadays, the money is not backed by precious metals but by "the full faith and credit of the United States," which lately has been wearing a little thin.  And the vast majority of people do not even remember that it was ever different.  F.Paul Wilson once wrote that in 1890 a $20 gold piece would buy you a good three-piece tailored man's suit -- and it was still true at the time he wrote that the amount of gold that coin represented would buy a good three-piece tailored man's suit, although the nominal amount in fiat dollars would be much higher. 

Okay, I suppose we took it on "full faith and credit" that there really were five silver dollars down at the Treasury.  Perhaps they were in a sock stuffed in the bottom desk drawer.  Or maybe there weren't any at all and everybody just pretended there were. 

The gold vault was real.  It's on Ft. Knox, next to the golf course; but even the army is not allowed inside the fence, so for all we know there is actually a bordello inside for G-men.  It is also closely situated to a railway spur that runs through the fort; perhaps for a quick getaway by rail should the vault ever be looted. 

Another vault is in the sub-basement of the Federal Reserve of New York, and this one I have an eyewitness for.  There are cages down there, each labeled with the name of a country and each containing pallets stacked with bars of gold bullion.  As opposed to bouillon cubes.  Whenever Brazil makes a deal with Turkey, or whoever with whoever, a guy with a forklift goes into the Brazil cage and removes the proper amount of gold and physically moves it to the Turkey cage.  Even though the gold never leaves the bedrock of Manhattan, the bars are still physically moved from cage to cage. 

At one point there was talk of moving the gold vault to the East Rutherford facility, but cooler heads prevailed.  I'm not sure that the swamps of northern New Jersey are as solid as the bedrock of Manhattan, but I am sure that a long string of trucks stuffed with gold and driving from the one to the other violates the Lord's Prayer thingie about "lead us not into temptation." 

Aside: avoirdupois, which means "good-bye to money"....  No wait.  It means "goods of weight" and it was the unit used to weigh goods for sale.  So why is silver and gold given in troy weight?  (Actually only the troy ounce is still used.)  Well, this was the weight used at the Great Fair of Troyes, a major international market event in the early Middle Ages.  Here is the answer.  Gold and silver are soft metals.  In order to be useful for coinage, they are alloyed with base metals like nickel to provide hardness and durability.  A typical gold coin might be around 92% fine gold.  Hence, a coin that weighed one avoirdupois ounce would contain one troy ounce of gold.  Kings, of course, were always trying to game the system by including lower proportions of gold.  Nowadays, it's easier because all they have to do is run the printing presses a little longer.  The principle is the same: more mass, but less value.