Does Every U.S. Coin Have Legal Tender Status?

[dcarr]

dcarr wrote:

 

I disagree that the general public "did not want the [gold] coins". They most

certainly did, and preferred them over all other forms of money. But there were

two barriers:

 

1) The powers in control (banks, government) were the ones that didn't want

the general public to have gold coins. And these authorities did everything to

discourage people from owning gold directly (eventually outlawing it altogether).

 

2) During the Great Depression many people did not even have enough money

for a single gold coin.

 

Wrong in general. (The second point is true, but irrelevant.) I had conversations

in the early 1950s with many people who were adults in the 1920s. Most families

kept a small amount of gold on hand for emergencies but used paper and non-gold

coins for all daily transactions. I also never met anyone who insisted on gold notes

for such dealings.

 

... Nearly all gold coin and most gold bars were held by the Treasury - as had been the case for decades. The public did not want the coins and commercial banks did not want the bars. ...

Hoarding was a problem because it pulled money out of active circulation and turned it into an inactive asset that did not contribute to the economy. ...

 

It is ridiculous to say on one hand that hoarding of gold coins by the general public was a problem, while on the other hand claiming that people didn't want the gold coins.

 

Yes, people used paper, copper, and silver for daily transactions. They didn't use gold coins as much because they wanted to hold onto it if they had any, and most of the time a single gold coin was more money than they would spend in a week.

 

This is "Gresham's Law" at work ("bad" money inevitably pushes "good" money out of circulation because people hang on to the desirable "good" money).

 

People wanted the gold coins the most, and so that form of money circulated the least.

[Mr.Mcknowitall]

"Question #1: It is as stated in the written historical records of all individuals/entities involved."

 

That they are statements is indeed factual, but can it be known whether said statements are based on fact or fiction? There exists the possibility of human error, as well.

 

Your other two answers lack a reference, as I asked four questions and the fact that you only answered three, two of which with a simple "yes", makes it impossible to determine which of the two remaining three questions you chose for response. I suspect, however, that replying to the question in this post will suffice.

 

I am just curious as to whether you accept historical accounts as factually accurate.

 

 

 

Answering your question in your 1st paragraph above: Considering my opinion offered in response to Question #1, my opinion is that question #4 in your original post is self answering in light of my opinion stated in response to Question #1, because if the premise is accepted, and it is by me and to my satisfaction, that the written historic records are statements by participants and entities at the time of the events, then yes, I find the statements factual, especially when the various participants and entities at the time involved agree. This renders your original 4th question not in need of an answer, because the passage of time does not alter the original factual statements in historical records by the persons and entities at the time of the historical events(s). Now, if all the written statements were to somehow magically disappear because of a conspiracy by world governments, in consort with Libraries, Universities, Newspapers, Radio and Movie Companies, and Publishers, then you may have a reasonable and logical....if slightly conspiratorial....basis to question what the historical record actually is. As an example, there are still persons in the world that don't believe the murder of 6 million persons of the Jewish Faith by the Nazis occurred.

 

Now, on to the question in your last paragraph in the new post. My answer is yes.

 

As to your suspicion that an answer to the post will suffice, I am confident I have fulfilled the goal of removing suspicion.

 

As to your confusion concerning the mathematical conundrum of the number of questions asked in your original post, this is easily solved by counting the questions in order of progression; the 1st question is #1, the 2nd question is #2, and so forth. Doing so would remove the confusion of the impossibility of determining what answer goes with what question. In passing, I recall a similar logic posit question on the ACT, or it may have been the SAT. It was so long ago, I am not certain which. It was intended to test the ability to solve simple conundrums via logical progression of thought.

[disme]

 

It is ridiculous to say on one hand that hoarding of gold coins by the general public

was a problem, while on the other hand claiming that people didn't want the gold coins.

 

Yes, people used paper, copper, and silver for daily transactions. They didn't use gold

coins as much because they wanted to hold onto it if they had any, and most of the time

a single gold coin was more money than they would spend in a week.

 

This is "Gresham's Law" at work ("bad" money inevitably pushes "good" money out of

circulation because people hang on to the desirable "good" money).

 

People wanted the gold coins the most, and so that form of money circulated the least.

 

Mr. Carr seems confused. People did not use gold coins for ordinary transactions in the

1920s. However, with the hard times that began in 1930 there was rising unemployment

and gold coins were then used when necessary, but only to obtain the paper and ordinary

coins used for daily needs.

 

On the other hand, those with money – beginning in 1930 – did start to hoard gold against

possible bank failures.

 

As early as January 1933 it became known in select circles that FDR was planning to call

in the gold. This soon led to the wealthy putting away considerable sums and I know of one

family that obtained at least 100 bags of double eagles, 25,000 pieces. It was at this point

that hoarding became a serious problem.

 

It should be noted that the hoarding was hardly a distinctly American event. This has always

gone on in difficult economic times throughout recorded history.

 

 

[Mr.Mcknowitall]

The planning began in the mid 20s. Other than that, I don't have any comment about the post.

 

Mr. Carr, while very knowledgeable, is presenting alternative history suppositions. While debate is fine, discussion based on mutual understanding of the historical events prevents unnecessary convoluted debates that turn heated for no other reason than a mutual disrespect of participants.

 

The discussion at hand is not an example of Gresham. Greed was not the issue, and neither was there a conspiracy to dupe The People. There have been comments over the years of same, all without merit.

[Afterword]

"As to your confusion concerning the mathematical conundrum of the number of questions asked in your original post, this is easily solved by counting the questions in order of progression; the 1st question is #1, the 2nd question is #2, and so forth."

 

 

 

 

Not knowing that you were following such a progression, I would have to assume this to be true. Much as most in this thread, apparently yourself as well, are using assumptions to form conclusions. There is nothing wrong with this, but it is hardly based on verifiably accurate evidence.

 

As at least one poster admitted - it is opinion.

[Mr.Mcknowitall]

"Using the words probably, perhaps, could have, such as, and should have, as support of factual history does not clarify an issue, but simply presents an opinion and alternative possibility."

 

 

 

What is the factual history in this case? Can it be determined from documents that were written and statements that were recorded? Does accepting such evidence as factual, because of lack of irrefutable evidence to the contrary, make it so?

 

Is it even possible to establish the factual history of something like this, after so much time as passed?

 

Question #1: It is as stated in the written historical records of all individuals/entities involved.

Question #2: Yes.

Question #3: Yes.

 

All replies are IMHO, of course.

 

For Mr. Afterward:

 

I think at least 2 people "admitted" an opinion.

 

It seems your declaration is wanting.

[Mr.Mcknowitall]

"As to your confusion concerning the mathematical conundrum of the number of questions asked in your original post, this is easily solved by counting the questions in order of progression; the 1st question is #1, the 2nd question is #2, and so forth."

 

 

 

 

Not knowing that you were following such a progression, I would have to assume this to be true. Much as most in this thread, apparently yourself as well, are using assumptions to form conclusions. There is nothing wrong with this, but it is hardly based on verifiably accurate evidence.

 

As at least one poster admitted - it is opinion.

 

See post above. Assume as you feel necessary, and I look forward to you allowing yourself time to read in-depth the historical declarations of the persons and entities involved at the time, so a meaningful discussion can occur, and eliminating a need on your part to have an "appearance" of caustic innuendo.

 

Logic speaks for itself in the realm of truth.

[Afterword]

"All replies are IMHO, of course. "

 

 

 

You are assuming I was not referencing the quote above. I stated "at least one" to avoid making an assumption.

[Mr.Mcknowitall]

"All replies are IMHO, of course. "

 

 

 

You are assuming I was not referencing the quote above. I stated "at least one" to avoid making an assumption.

 

 

I understand. I didn't assume. There is a another that proclaimed the same: Mr. Carr.

 

I don't assume. There was more than one.

[Afterword]

"Assume as you feel necessary, and I look forward to you allowing yourself time to read in-depth the historical declarations of the persons and entities involved at the time, so a meaningful discussion can occur, and eliminating a need on your part to have an "appearance" of caustic innuendo."

 

 

I have no interest in the subject or need to form an opinion of same.

 

Things are not always as they appear.

 

 

[Mr.Mcknowitall]

"Assume as you feel necessary, and I look forward to you allowing yourself time to read in-depth the historical declarations of the persons and entities involved at the time, so a meaningful discussion can occur, and eliminating a need on your part to have an "appearance" of caustic innuendo."

 

 

I have no interest in the subject or need to form an opinion of same.

 

Things are not always as they appear.

 

 

Thanks. I can understand and appreciate your non-interest. If only it would have exhibited itself in this Thread.

[Afterword]

"Assume as you feel necessary, and I look forward to you allowing yourself time to read in-depth the historical declarations of the persons and entities involved at the time, so a meaningful discussion can occur, and eliminating a need on your part to have an "appearance" of caustic innuendo."

 

 

I have no interest in the subject or need to form an opinion of same.

 

Things are not always as they appear.

 

 

Thanks. I can understand and appreciate your non-interest. If only it would have exhibited itself in this Thread.

 

 

 

The belief that historical accounts are factually accurate is what I find interesting, especially when politicians and wealthy interests are involved. Here I am making an assumption of my own - that politicians and wealthy interests were the same back then as they are today.

[Mr.Mcknowitall]

"Assume as you feel necessary, and I look forward to you allowing yourself time to read in-depth the historical declarations of the persons and entities involved at the time, so a meaningful discussion can occur, and eliminating a need on your part to have an "appearance" of caustic innuendo."

 

 

I have no interest in the subject or need to form an opinion of same.

 

Things are not always as they appear.

 

 

Thanks. I can understand and appreciate your non-interest. If only it would have exhibited itself in this Thread.

 

 

 

The belief that historical accounts are factually accurate is what I find interesting, especially when politicians and wealthy interests are involved. Here I am making an assumption of my own - that politicians and wealthy interests were the same back then as they are today.

 

I can understand. Your position is that historical proclamation by written word, independent research, participant documentation, political personages, or persons of wealth being involved in historical events are all subject to suspicion as to accuracy and fact.

 

The conclusion then is nothing is factually accurate in history, and unless you personally were a participant then you are not satisfied and will not agree to accuracy. The world can use the opinions of all, however important or not. The Right to be an individual is firmly supported by me. Want to go look for BIGFOOT?

[Afterword]

"I can understand. Your position is that historical proclamation by written word, independent research, participant documentation, political personages, or persons of wealth being involved in historical events are all subject to suspicion as to accuracy and fact."

 

 

 

Right.

 

 

 

"The conclusion then is nothing is factually accurate in history, and unless you personally were a participant then you are not satisfied and will not agree to accuracy."

 

 

 

False. Historic accounts may or may not be factually accurate. I will not agree to certainty.

[Mr.Mcknowitall]

"I can understand. Your position is that historical proclamation by written word, independent research, participant documentation, political personages, or persons of wealth being involved in historical events are all subject to suspicion as to accuracy and fact."

 

 

 

Right.

 

 

 

"The conclusion then is nothing is factually accurate in history, and unless you personally were a participant then you are not satisfied and will not agree to accuracy."

 

 

 

False. Historic accounts may or may not be factually accurate. I will not agree to certainty.

 

...and that is your God given and Constitution supported Right, both of which you need not agree with, as to certainty.

 

I am certain though, that your interpretation of certainty is not accurate and is subject to a test of illogical logic.

[Afterword]

I cannot say with certainty that my interpretation of certainty is accurate, which leaves the possibility that you are right, but of this I am also not certain. I am not even certain that I am certain about my uncertainty.

[RWB]

Just to clarify -- people hoarded anything they felt was of value. As far as commerce was concerned, this meant money in any available form. The various reports of the time usually call anything that was either physical gold or directly exchangeable for gold as "gold."

 

A review of Secret Service records shows that of all the hoards and private holdings reported to them, the dominant "gold" form was in gold certificates. Gold coins and bars were very uncommon and dominated only in large hoards held by foreign nationals in the US. (This is the "bank box" material sometimes referred to in literature.) Newspaper accounts show similar emphasis on paper currency.

 

The mix of types of money in a hoard (or 'personal emergency reserve') is consistent with general availability at the time a hoard was established. Whatever money was available was kept and not spent. Another book manuscript excerpt might help a little:

 

[This paragraph follows several pages of fully referenced details from bank, FRB and Treasury/Mint records. Note that the total of $26 million is only gold coins.]

 

"For the period from March 1933 through December 1946 the total gold coin exchanged by the American public was approximately $26,076,995. This estimate is well below treasury quantities reported in the 1930s. The reasons are that the present estimate, 1) excludes all gold certificates, which made up the bulk of circulating gold, 2) excludes gold coin already in the custody of treasury and FRBs, 3) eliminates double counting of coins by the FRBs and Mint Bureau as they moved through the banking and treasury system, and 4) includes coins that did not pass through the U.S. domestic financial system but were in government custody."

 

Item #4 above refers to the Manila, PI Mint which held $805,410 in U.S. gold coins. (NARA. Philippine Commissioner’s Annual report 1942. pp.57-58.)

[dcarr]

 

It is ridiculous to say on one hand that hoarding of gold coins by the general public

was a problem, while on the other hand claiming that people didn't want the gold coins.

 

Yes, people used paper, copper, and silver for daily transactions. They didn't use gold

coins as much because they wanted to hold onto it if they had any, and most of the time

a single gold coin was more money than they would spend in a week.

 

This is "Gresham's Law" at work ("bad" money inevitably pushes "good" money out of

circulation because people hang on to the desirable "good" money).

 

People wanted the gold coins the most, and so that form of money circulated the least.

 

Mr. Carr seems confused. People did not use gold coins for ordinary transactions in the

1920s. However, with the hard times that began in 1930 there was rising unemployment

and gold coins were then used when necessary, but only to obtain the paper and ordinary

coins used for daily needs.

 

On the other hand, those with money – beginning in 1930 – did start to hoard gold against

possible bank failures.

 

As early as January 1933 it became known in select circles that FDR was planning to call

in the gold. This soon led to the wealthy putting away considerable sums and I know of one

family that obtained at least 100 bags of double eagles, 25,000 pieces. It was at this point

that hoarding became a serious problem.

 

It should be noted that the hoarding was hardly a distinctly American event. This has always

gone on in difficult economic times throughout recorded history.

 

 

I think you are confused about what I wrote. I will try and present the point better.

 

I didn't say people used gold coin for "ordinary" transactions. I said the opposite. People didn't use gold coins for ordinary transactions because:

1) The face value of most gold coins greatly exceeded the amount of most "ordinary" transactions.

2) People would spend what they perceived as the least desirable money first, saving the most desirable form of money (if they could) till the last. This meant that paper, copper, nickel, and silver were generally spent before gold. Proof of this can bee seen in the wear patterns on coins from circulation. Even though gold is relatively soft, very few gold coins are below the grade of VF. Silver, nickel, and copper coins of the early 20th century are frequently found in well-worn AG condition.

 

 

[dcarr]

The planning began in the mid 20s. Other than that, I don't have any comment about the post.

 

Mr. Carr, while very knowledgeable, is presenting alternative history suppositions. While debate is fine, discussion based on mutual understanding of the historical events prevents unnecessary convoluted debates that turn heated for no other reason than a mutual disrespect of participants.

 

The discussion at hand is not an example of Gresham. Greed was not the issue, and neither was there a conspiracy to dupe The People. There have been comments over the years of same, all without merit.

 

1)

From 1914 through 1933, the Federal Reserve bank issued 36 billion dollars worth of gold-redeemable currency notes.

 

3)

FDR himself said in 1933 that all the gold in all the world amounted to 11 billion dollars worth. He also said that there was only enough gold available for one out of every 25 claims on it.

 

Those are not "alternative history suppositions".

The suppositions come into play when considering the motives behind this.

 

Either the Federal Reserve was incompetent and didn't realize what they were doing, or they knew full well that they were issuing far more claims on gold than there was actual gold to back it up.

 

Either way, it is bad.

 

Gresham's Law is not necessarily about greed. In simple terms, Gresham's Law dictates that desirable forms of money tend to be withheld from circulation when less-desirable forms of money are available. That is exactly the case in 1933 with gold coinage.

 

[Mr.Mcknowitall]

The planning began in the mid 20s. Other than that, I don't have any comment about the post.

 

Mr. Carr, while very knowledgeable, is presenting alternative history suppositions. While debate is fine, discussion based on mutual understanding of the historical events prevents unnecessary convoluted debates that turn heated for no other reason than a mutual disrespect of participants.

 

The discussion at hand is not an example of Gresham. Greed was not the issue, and neither was there a conspiracy to dupe The People. There have been comments over the years of same, all without merit.

 

1)

From 1914 through 1933, the Federal Reserve bank issued 36 billion dollars worth of gold-redeemable currency notes.

 

3)

FDR himself said in 1933 that all the gold in all the world amounted to 11 billion dollars worth. He also said that there was only enough gold available for one out of every 25 claims on it.

 

Those are not "alternative history suppositions".

The suppositions come into play when considering the motives behind this.

 

Either the Federal Reserve was incompetent and didn't realize what they were doing, or they knew full well that they were issuing far more claims on gold than there was actual gold to back it up.

 

Either way, it is bad.

 

Gresham's Law is not necessarily about greed. In simple terms, Gresham's Law dictates that desirable forms of money tend to be withheld from circulation when less-desirable forms of money are available. That is exactly the case in 1933 with gold coinage.

 

If you are comfortable that you are well read on the subject and have read the accounts of all participants and entities and world leaders on the subject, going back to 1923, then it is your Right to believe as you desire to. Debating for the sake of debate and using innuendo, supposition and limited (very) resources, and surmising that which isn't, is also your Right. As to Gresham, my comments mirror the same belief that it is your Right. Unfortunately, my Jesuit training declines your position. I also decline faux debate and do not accord with debate as a substitute for meaningful discussion that is had between persons that are fully informed via all the information available. If you get a chance to read Baruch and Churchill on the subject, and then review MacArthur, that would be good start and we might be able to limit the conspiracy theory approach. Issuance of forward prescribed Notes for a nation is the least unusual application of Notes, as far back as the Crusade. The Chosun people were doing so 3,000 years ago. Where do you think the idea came from? The Dutch...blame the Dutch and then we will attack the East India Trading Co. I am content with my description of alternative history suppositions.

 

No, it is not exactly the case. It is what you desire to exactly be the case. There is nothing wrong with that, but logic does not support your position, and I doubt you have any desire to hold a different position. That is OK, too. Either/or is not fact and informed logic. It is BIGFOOT. Don't misinterpret me, because BIGFOOT could possibly exist. I am just using a metaphor for your logic position, that is all I mean by BIGFOOT.

[Hepcat]

Remember what happened in Canada when someone tried to deposit a bunch of those silver Olympic 5's and 10's....

 

I for one do not "remember" because I never heard about it in the first place. Fill us in on the story with all the details if at all possible.

 

[mark]

dcarr:

 

I'm still interested in your opinion why the Fed would have any interest in "maximizing its profit".

 

Plus, looking at the Fed's balance sheet at the end of May, 1933 shows that there were $3.1 billion of Federal Reserves notes outside of Federal Reserve banks (https://fraser.stlouisfed.org/docs/publications/FRB/1930s/frb_061933.pdf , page 19 of 86 in the pdf). Why is this number so different from your comment that the Fed issued $36 billion dollars "worth of gold-redeemable currency notes" which I take to mean Federal Reserve notes because I believe those are the only type of notes the Fed issues.

 

Thanks in advance once again.

 

Mark

[dcarr]

The planning began in the mid 20s. Other than that, I don't have any comment about the post.

 

Mr. Carr, while very knowledgeable, is presenting alternative history suppositions. While debate is fine, discussion based on mutual understanding of the historical events prevents unnecessary convoluted debates that turn heated for no other reason than a mutual disrespect of participants.

 

The discussion at hand is not an example of Gresham. Greed was not the issue, and neither was there a conspiracy to dupe The People. There have been comments over the years of same, all without merit.

 

1)

From 1914 through 1933, the Federal Reserve bank issued 36 billion dollars worth of gold-redeemable currency notes.

 

3)

FDR himself said in 1933 that all the gold in all the world amounted to 11 billion dollars worth. He also said that there was only enough gold available for one out of every 25 claims on it.

 

Those are not "alternative history suppositions".

The suppositions come into play when considering the motives behind this.

 

Either the Federal Reserve was incompetent and didn't realize what they were doing, or they knew full well that they were issuing far more claims on gold than there was actual gold to back it up.

 

Either way, it is bad.

 

Gresham's Law is not necessarily about greed. In simple terms, Gresham's Law dictates that desirable forms of money tend to be withheld from circulation when less-desirable forms of money are available. That is exactly the case in 1933 with gold coinage.

 

If you are comfortable that you are well read on the subject and have read the accounts of all participants and entities and world leaders on the subject, going back to 1923, then it is your Right to believe as you desire to. Debating for the sake of debate and using innuendo, supposition and limited (very) resources, and surmising that which isn't, is also your Right. As to Gresham, my comments mirror the same belief that it is your Right. Unfortunately, my Jesuit training declines your position. I also decline faux debate and do not accord with debate as a substitute for meaningful discussion that is had between persons that are fully informed via all the information available. If you get a chance to read Baruch and Churchill on the subject, and then review MacArthur, that would be good start and we might be able to limit the conspiracy theory approach. Issuance of forward prescribed Notes for a nation is the least unusual application of Notes, as far back as the Crusade. The Chosun people were doing so 3,000 years ago. Where do you think the idea came from? The Dutch...blame the Dutch and then we will attack the East India Trading Co. I am content with my description of alternative history suppositions.

 

No, it is not exactly the case. It is what you desire to exactly be the case. There is nothing wrong with that, but logic does not support your position, and I doubt you have any desire to hold a different position. That is OK, too. Either/or is not fact and informed logic. It is BIGFOOT. Don't misinterpret me, because BIGFOOT could possibly exist. I am just using a metaphor for your logic position, that is all I mean by BIGFOOT.

 

Apparently, you do not think it was "bad" that the Federal Reserve issued 36 billion dollars of gold claims on less than 4 billion in gold. It is your right to hold that opinion.

 

However, a logical conclusion as to the end result of this activity is that it caused the Great Depression by inflating a credit bubble and moving economic activity growth forward in time from the 1930s to the 1920s. The cost of this was a severe credit contraction and lowered levels of economic activity in the early 1930s. These would not have been nearly as severe if the Federal Reserve had been earlier restrained from blowing such an enormous bubble in the 1920s.

 

Regarding your comments as to what I believe and that I "desire" to believe it, this is known as The Ownership Fallacy .

 

You can not desire to believe something. A belief is only an involuntary response to information. Desiring to believe something is like wishing something is true. Either you truly believe something or you don't. Desiring to believe something is mere pretending. I do not "desire" to believe as I do. I believe as I do because that is what the evidence looks like.

 

 

[Afterword]

I believe, but of course am not certain, that Federal Reserve Notes and United States Notes, which were redeemable in gold, were not subject to surrender under Executive Order 6102.

[dcarr]

dcarr:

 

I'm still interested in your opinion why the Fed would have any interest in "maximizing its profit".

 

Plus, looking at the Fed's balance sheet at the end of May, 1933 shows that there were $3.1 billion of Federal Reserves notes outside of Federal Reserve banks (https://fraser.stlouisfed.org/docs/publications/FRB/1930s/frb_061933.pdf , page 19 of 86 in the pdf). Why is this number so different from your comment that the Fed issued $36 billion dollars "worth of gold-redeemable currency notes" which I take to mean Federal Reserve notes because I believe those are the only type of notes the Fed issues.

 

Thanks in advance once again.

 

Mark

 

The Federal Reserve issued two types of notes:

 

1) Federal Reserve Notes. These had a clause printed on them (from 1914 to 1933) that indicated they were exchangeable for gold on demand at the US Treasury.

 

2) Federal Reserve Bank Notes. These did not have any gold clause printed on them.

 

The 36 billion dollars in gold-clause notes that the Federal Reserve issued is the sums of the face values of all the Federal Reserve Notes issued from series 1914 up through series 1928-C.

 

The appendix on this page shows a tabulation of the notes issued and their total face value: 1933 bailout of the Federal Reserve .

 

That 1933 Federal Reserve statement conflicts with the above.

The statement shows:

"Federal Reserve Notes outside Federal Reserve Banks": $3.188 billion.

And it also shows:

"Federal Reserve Notes issued to Federal Reserve Banks by Federal Reserve agents": $3.437 billion.

 

Even with both of those combined, that is still only 1/6th of the total issued. Where were the other 5/6th ?

 

Note that Roosevelt himself said:

"Behind government currency we have, in addition to the promise to pay, a reserve of gold and a small reserve of silver, neither of them anything like the total amount of the currency."

If the US Treasury held close to 4 billion in gold, Roosevelt's statement seems to indicate that the total amount of gold claimed by the currency notes was much higher than that 4 billion dollars worth.

 

PS:

I'm still researching the Federal Reserve profits, and where those profits went.

 

[dcarr]

I believe, but of course am not certain, that Federal Reserve Notes and United States Notes, which were redeemable in gold, were not subject to surrender under Executive Order 6102.

 

Correct. Neither of those types of notes were subjected to any recall.

 

Red seal United States Notes did not have any gold redemption clauses printed on them.

I don't think they were backed by any physical gold.

I don't think it was established that person could demand gold for them.

Anyway, I have not counted them in any of my figures concerning gold obligations.

 

[mark]

dcarr:

 

I found your calculation of $36 billion. I suspect that your assumption that bills wore out slowly is what is at issue because it's my WAG that bills wore out much more rapidly back then since there were no credit cards to allow the notes a chance to "rest" in a drawer or cash register til. Back then it seems to me that currency had to be used to transact business. So currency probably wore out quickly?

 

Mark

[RWB]

There were consistent statutory limits on the backing required for each type of paper currency. The normal practice was to add or remove currency whenever its backing fluctuated. Thus, silver certificates were backed by silver dollars until 1934. When silver dollars were melted in 1918-1919 to satisfy the Pittman Act, silver certificates of a equal value had to be withdrawn. Treas Sec Mellon wanted to replace the melted silver dollars as quickly as possible so that new silver certificates could be issued.

 

There are Treasury letters stating that certain amounts of gold certificates of FRB notes could not be issued because the backing cap was near. There are also hundreds of Treasury ledger books in the archives where all the transactions are covered. There is an analogous set in the FRB archive in Washington, DC. along with nearly all the reports, letters, memoranda, etc.

 

Currency was never simply tossed out and forgotten, as Mr. Carr seems to think. Every note was accounted for by serial number as any currency collector can easily show him. Issuance and redemption was carefully tracked note-by-note.

[dcarr]

dcarr:

 

I found your calculation of $36 billion. I suspect that your assumption that bills wore out slowly is what is at issue because it's my WAG that bills wore out much more rapidly back then since there were no credit cards to allow the notes a chance to "rest" in a drawer or cash register til. Back then it seems to me that currency had to be used to transact business. So currency probably wore out quickly?

 

Mark

 

All Federal Reserve Notes were $5 and up. There were no Federal Reserve $1 or $2 bills in 1933.

 

Most of the smaller denomination transactions were handled by coins, silver certificates, and United States Notes.

 

One-dollar bills wear out quickly in today's commerce, partly because they don't have a lot of purchasing power and people aren't concerned with being careful handling them. Wadding them up and stuffing them in a pocket is commonplace. $100 bills last much longer. The current average lifespan of a $100 note is 15 years, according to the Federal Reserve. The SMALLEST Federal Reserve note issued prior to 1934 is $5. The purchasing power of $5 in 1933 is equivalent to $100 today. A $100 bill today lasts 15 years on average, and were are talking about a time span of only 20 years (1914-1933). How carefully would a $20 bill in 1933 be handled ?

 

If it is true that hoarding of currency was epidemic in the Great Depression, that would result in LESS wear and tear on paper money on average.

 

So I have not yet seen anyone post a reason as to the discrepancy between the Federal Reserve statement of 3 to 6 billion in currency extant, and the 36 billion in total notes issued.

 

Possible explanations:

 

1) The Federal Reserve's 1933 balance sheet does not include some off-balance-sheet items.

 

2) A lot of the currency is in a category not listed on the balance sheet.

 

3) The 36 billion in notes was the result of constant re-issuing, resulting in only 3 to 6 billion net. Certainly some redemption and reissuing would have taken place. But would an average high-denomination note be reissued six times in 20 years ? I doubt it.

 

4) The reported quantities of notes issued is grossly in error. I doubt that as well, especially since the reported quantities issued seem to correlate well with observed populations and collector values.

 

 

 

 

[dcarr]

There were consistent statutory limits on the backing required for each type of paper currency. The normal practice was to add or remove currency whenever its backing fluctuated. Thus, silver certificates were backed by silver dollars until 1934. When silver dollars were melted in 1918-1919 to satisfy the Pittman Act, silver certificates of a equal value had to be withdrawn. Treas Sec Mellon wanted to replace the melted silver dollars as quickly as possible so that new silver certificates could be issued.

 

There are Treasury letters stating that certain amounts of gold certificates of FRB notes could not be issued because the backing cap was near. There are also hundreds of Treasury ledger books in the archives where all the transactions are covered. There is an analogous set in the FRB archive in Washington, DC. along with nearly all the reports, letters, memoranda, etc.

 

Currency was never simply tossed out and forgotten, as Mr. Carr seems to think. Every note was accounted for by serial number as any currency collector can easily show him. Issuance and redemption was carefully tracked note-by-note.

 

Where did I indicate that notes were "tossed out and forgotten" ?

If anything, I've been postulating the opposite.

 

If you have some data to show how 36 billion total in Federal Reserve Notes issued during 1914-1933 became just 3 to 6 billion notes extant in 1933, please post it - I would like to see it.