Recently introduced state legislation backing the creation of a new state currency which could consist of “gold or silver, or both” leaves one contemplating a simple question: What size denomination would said currency come in?
Certainly the old gold-coin mainstays of $1, $2-1/2, $5, $10 and $20 would be pretty much useless given the price of the prized yellow metal today.
Think about how small a $20 gold piece would have to be if it were to actually contain $20 worth of gold. (And a $1 gold piece would be all but invisible given that gold is currently selling for just under $1,400 an ounce.)
If the Double Eagle, say, contained any more than $20 worth of gold (in order to make it easier to handle and hold on to), it would be useless as a medium of exchange because as soon as it was introduced into circulation would be snapped up and held onto because its metallic worth would exceed its stated value.
On the other hand, if gold coins were minted in sizes similar to those turned out by the US government a century ago, they’d likely be issued in something like denominations of approximately $250, $500, $1,000 and $1,500.
Those don’t sound like very practical amounts to be carrying around.
And, of course, with the price of metals like gold and silver fluctuating daily, such coins could be worth more or less than their official value any day of the week. Again, this won’t exactly facilitate commerce.
And, of course, one is left with the question as to where South Carolina would get all this gold and silver needed to mint its own coinage.
Given that the state is struggling to provide core services such as paying teachers and troopers, it’s not clear where we’d come up with the cash to purchase enough specie to begin minting our own metallic currency.
(Above: Carolina Elephant Token, 1694)