NUMISMATIC VALUES GREATER THAN MONEY
May 4, 2011No one talks about the depression of 1837, though the new Speaker of the House John Boehner brought up the coin and currency act of the First Congress of the United States in 1787.
What was a failing in his reference was the scandal of having a private mint contract fulfill the most important coin in our US economy, the one cent; which at that time was the Fugio Cent. This contract awarded to a Mr. Jarvis to make the copper, Fugio who abscounded with the metal and left the contract unfulfilled, left Congress to eventually mint more money. That was not enough, since commerce was more successful due to a growing population and growing goods and services. Not too far off from today, in the 21st Century.
In between, by 1835, the Hard Times of this country demanded more coin, which our US Congress, in a conservative and penureous policy decision failed to meet that demand, which plunged the country into a depression in 1837. The rich people of that time, lead by Dr. Feuchtwanger of New York took it upon themselves to mint what were called tokens, as coin for the common citizen to continue to spend hard earned money. His one cent token made with silver worth in the metals market today, the 21st Century some three dollars US.
The lesson missed of today is missed in the lapse of the knowledge of history, mixed with the lack of consistent understanding that government monetary aggregate is an historic coinage or numismatic principle different from the principles of finance and instead part of the discipline of understanding economics.
This difference between ‘coin collecting’ that is a respectable hobby, and numismatics, which is a science that includes the ‘numerical matter’ of the values of metal and alloy, the art and sculpture for the security of that metal used in exchange; all coupled with an understanding of history to advance the understanding of economics. Specifically, numismatics study offers an understanding of the economy. And, not just the economy of the United States, but especially today, the understanding of the economy of the whole world.
It was given during the realm of King George III of England, as an understanding that commerce would stand still without a copper penny, which is considered the ‘staple’ of the economy, for that is the amount to enable access for the lowest wage earner the lowest purchase power. Since Colonial Times it was understood, proven at that time that without activity from the lowest common denominator, commerce would suffer.
With poor coinage laws, Congress refused to issue coins as the population grew. The depression of 1837 gave way to prosperity when the rich realized their responsibility to the greater good and offered into circulation tokens as coins to spend. Today we do this by an act of the US Congress, and each country subject to a global economy has its own system for the manufacture of money, still asking for a sense of responsibility from the rich.
For, as the wealth changes hands, so does the responsibility to the people who aided in the building of that wealth, and therein is found the reason to tax those who earn more than $250,000.00 US to contribute back into the flow of our economy at a greater proportion than those who earn less than $250,000 US per year.
The simple fact of understanding the seven levels of our Monetary Aggregate system that offers a break from M3, holdings of up to $250,000 when the holder of that amount must work to sustain that; and M4, holdings of more than $250,000 who can let that money work for them. It is of this difference that the workers, in this case simply the money that is part of the economy, must rebuild the economy and we do this by a statistical model forsake of the circulation of coin and currency, a responsibility called for by taxes to reinstate that difference called deficit in the economy.
Once the rich simply printed more money to accommodate responsibility for more financial activity, now the government is relied upon to print more money as the government must accommodate the responsibility for more economic activity.
The numismatic illustration shows how finance is different from economics, for as the value of the coin grows by circulation and rarity in its mintage without one of those elements, the coin has less value. Appreciation for the art and historical representation separates the numismatic scholar from the coin collecting hobbyist.
The sad illustration was given last week at the 1154th Heritage Auction in Chicago in March 2011, during the 7th and last session gave off almost all the gold coins of centuries in historic content for the spot price of their gold content. What the numismatic audience noticed was the coin values had diminished from collectibles to a ‘meld down’ value.
While in a private sale, the Feuchtwanger token cent with a 2011 value in silver of $3 US valued in the ‘Bible of Token Coins,’ by Russell Rulau that suggested the value of $165 sold for $330. Maybe the numismatic lesson by some with an education goes to message our US Congress, who were elected by those without an education on the matters of coin and circulation of our money.