Why Was The Weight Of The Silver Subsidiary Coins Reduced In The 1850-S?

Subbd

Not politics, economics.

With the discovery of massive amounts of gold in California in 1849 the value of gold in the open market fell. This meant the silver, as priced in gold, had it value increased. In other words it now took $1.04 to $1.08 in gold to buy the silver in $1 of us silver coins. So people hoarded the silver coins. Reducing the weight of the silver coins put them slightly below the same par value as gold. At the same time the government eliminated the free coinage option for silver, all silver coinage would now be done on the governments account and they would derive the profit on the coins seigniorage, and limited the legal tender status of minor silver coinage to $5. One mistake they made was in not reducing the weight of the silver dollar. It was felt it would be a loss of "prestige" to reduce the weight of the standard unit. In doing so it put another nail in the coffin of dollar coin circulation. Who is going to use for a $1 a coin worth almost ten percent more than $1? (The legal tender status of the silver dollar was not reduced. You could use as many of these $1.08 value silver dollars as you wanted.)

Thanks, @Conder101. That makes perfect sense. Some economics, some politics (keeping the silver dollar unchanged), but eventually when the price of silver dropped everything except gold was effectively a token coinage (although a substantial token for quite a while).

I was just looking at related info on this.

An 1857 silver dollar weighed 26.73 grams.
An 1857 silver half dollar weighed 12.44 grams.
So, the dollar weighed 1.85 grams more than two half dollars.

BUT, the Three Cent Silver weighed 0.75 grams, meaning that one dollars worth of three centers weighed 25 grams. Making the dollar 1.73 grams heavier than 33 1/3 Three Cent pieces.


AND, the silver quarter dollar weighed 6.68 grams making a dollars worth of those weigh 26.72 grams, only 0.01 grams less than the silver dollar.

What does this all mean?

I have no clue. Sorry.

So now you found out how much our government knows about our money.

There is an article in the May issue of the Numismatist that talks about the 1853 Quarter and the fact that the weight was reduced from 6.68g to 6.22g after only 44,000 of the 15.2 million were produced. The mint added arrows and rays to the lighter weight coins and this resulted in altered coins where the arrows and rays were removed by forgers.

The article says that the weights were reduced by Congress to discourage melting for a profit.