This article discusses the history of coined money as a medium of exchange in the United States. Carl explains how entrepreneurs came in to supply the market for coinage just as they do for any other product or service that is in demand.
Of course gold was the main metal used to create the coins and I learned that private gold coinage began during a gold rush in Georgia and North Carolina in 1828. (I didn’t even know there was a gold rush in those states, did you?)
Then the story moves to California after gold was discovered there in 1849. The use of coins there is quite a story. Since California wasn’t a state yet, there was no settled government which meant it was even more of an opportunity for someone to fill the market demand for a medium of exchange so people could conduct business.
California seemed to be doing just fine with this until the Civil War. The U. S. government issued paper money and California had to now figure out how to deal with this new situation. These new “greenbacks” had no gold backing so it makes sense that Californians would have little use for them. A lot of people had no interest in “greenbacks,” they liked their gold.
As a matter of fact, the tax collector of San Francisco even refused to accept them as payment!
In addition, many people did not want to be in a situation where they had contractual relationships built on payment in gold and end up receiving paper money, so the state passed the Specific Contract Law which basically said payment had to be made in the form stated in the contract.
I know I always recommend reading the articles for yourself but this one is of particular importance to Carl as he concludes the piece:
“Given the demise of both private and government gold coinage, it is difficult to imagine how commodity money will once again assert its dominance in market exchanges. Yet there is a natural law at work which assures us that paper is not gold, despite all the statist protestations to the contrary. Both voluntaryists and "hard money” advocates need to be aware of the monetary history related in this article, not only is the moral case for private coinage laid out, but its very existence just over a century ago proves that such a system was functional and practical.”
Now, to get back to what I said at the beginning about hitting the jackpot, as soon as I started reading this article, I immediately thought of the Liberty Dollar. I knew practically nothing about it specifically, only that people in libertarian circles were upset at how the government came in and shut them down and I also was aware that their offices were in Evansville Indiana, a mere two hours from where I currently live.
So as I was reading a bit on the Liberty Dollar, I discovered that Carl was never very enthused about it. He wrote about his concerns in Issue 110, one being that they used the term dollar, which Carl says is a statist term, “a government unit of accounting.”
This then led me to Issue 65 where Carl wrote about a bad experience with another private coinage firm, Gold Standard Corporation, which was accepted as payment for The Voluntaryist subscriptions up to that point.
Carl’s remarks on both the Liberty Dollar and Gold Standard Corporation reference the questionable character and actions of people inside those businesses. Carl warns us that “free market rogues can defraud you just as bad as government ones” so you should always be careful and skeptical.
This is true of course but if they were indeed fraudulent in some way, at least both of those businesses do not exist anymore. The Federal Reserve, government minting and printing however, still remains.
One last point I need to bring up on this topic is bitcoin. I have looked into bitcoin. I have watched videos on bitcoin. I have read articles on bitcoin. But I don’t get it.
Since my husband is in computers, when I saw people working with bitcoin at Porcfest, I had someone explain it to him in the hopes I can understand it better. He seemed to understand it better, but I still don’t. I am completely confused about it.
I have noticed a lot of excitement in libertarian/anarchist circles around bitcoin and I have seen several skeptical views about it as well. I don’t know what you think but I guess the smartest thing for me to do, since I don’t get it is to just stand back and see what happens.