The Gold-Silver Ratio and U.S. Coinage Part One
At the present time, with the price of an ounce of gold around $1,900 and silver at $25, the value (ratio) of silver compared to gold is 76 to 1. This means that 76 ounces of silver could be exchanged for one ounce of gold if there was an easy mechanism for doing so. Today we no longer think of the gold-silver ratio as being important for our coinage, but this was not always the case.
During the 19th century, the ratio of gold to silver was of extreme importance, not only for the coinage itself, but in the broad political arena in this country. Elections were won and lost depending upon the current values of these two metals and their relationship to the coinage and economy.
Around 500 B.C., the ratio of silver to gold was roughly 10 to 1. Over the succeeding centuries this ratio varied but, as a rule, gold became more valuable with time. By the late 17th century, for example, the ratio was about 15 to 1. During the next hundred years it rose and fell with political and military crises but generally did not drop below 14.5 to 1.
In the English colonies of the 17th and 18th centuries along the Atlantic seaboard, there were really two standards in effect. The first
