Why We Left The Gold Standard

On Jul 24, 7:08*am, Mike Benveniste wrote:
On 7/23/2011 10:31 PM, oly wrote:

I'll choose 1893 - please proceed with your demonstration.

Easy enough -- on April 15, 1893, John G. Carlisle recommended
suspension of redemption of notes for gold. *The law of 1882 gave him
this power, and the Sherman Act of 1890 allowed redemption in either
gold or silver.

In his message asking for repeal of the 1890 Act, President Cleveland
noted on August 8th, 1893:
* * * Unless Government bonds are to be constantly issued and sold to
* * * replenish our exhausted gold, only to be again exhausted, it is
* * * apparent that the operation of the silver-purchase law now in
* * * force leads in the direction of the entire substitution of silver
* * * for the gold in the Government Treasury, and that this must be
* * * followed by the payment of all Government obligations in
* * * depreciated silver.

So from these events, it's clear that the U.S. government felt it had
the legal right to redeem in silver.

--
Mike Benveniste -- (Clarification Required)
You don't have to sort of enhance reality. There is nothing
stranger than truth. -- Annie Leibovitz

Perhaps the deal was that, de jure, the Treasury had that right,
especially with domestic entities and individuals persenting notes and
other securities; but, de facto, the Treasury had to pay everyone in
gold or lose face in the international markets. And as President
Cleveland noted, a kind of Gresham's Law was experienced, and silver
was the "Old Maid".

Gold was clearly what people wanted in 1893, not silver and not
paper. Maybe the Treasury could have paid out silver instead of gold,
but your quote only states that Treasury was receiving silver via a
silver mining subsidy law, not paying it out.

oly

On 7/24/2011 1:40 PM, oly wrote:

Gold was clearly what people wanted in 1893, not silver and not
paper. Maybe the Treasury could have paid out silver instead of gold,
but your quote only states that Treasury was receiving silver via a
silver mining subsidy law, not paying it out.

There's no "maybe" about it -- the _threat_ of the U.S. Government
paying out silver was a good part of what caused the Panic of 1893.
Had J.P. Morgan not lent the U.S. Government $65 million in gold, they
probably would have been forced to.

So we see that in 1893, a U.S. Government creditor could only rely on
faith in the government that they'd get paid in gold. They could not
rely on law. People might have _wanted_ gold, but that's not what
makes a gold standard.

There are two "tricks" to my original claim. One is found in the 1875
Resumption Act, which required redemption of notes "in coin." At the
time of passage that would have meant gold. But then as now,
politicians liked to promise now for later delivery, so the requirement
to redeem didn't take effect until January 1, 1879. However, by then
the Bland–Allison Act had already passed, so silver was once again
lawful coin.

The second is in the 1900 "Gold Standard Act," where the large print
giveth and section 3 taketh away. To quote that section, "That nothing
contained in this Act shall be construed to affect the legal-tender
quality as now provided by law of the silver dollar, or of any other
money coined or issued by the United States."

--
Mike Benveniste -- (Clarification Required)
You don't have to sort of enhance reality. There is nothing
stranger than truth. -- Annie Leibovitz

Mike, you are splitting hairs to a ludicrous degree. You remind me of Clinton's
sophistry in debating what "is" is".
Until FDR's crime spree, the dollar was freely convertible to gold at a set
rate.

On Jul 24, 6:40*pm, "Some Guy" wrote:
Mike, you are splitting hairs to a ludicrous degree. You remind me of Clinton's
sophistry in debating what "is" is".
Until FDR's crime spree, the dollar was freely convertible to gold at a set
rate.

Mike has a very technical legalistic point, but I think after 1879 or
so, the Treasury always paid in Gold. To do otherwise would have
impunged the credit of the United States. Mike needs to show us where
the treasury actually paid in silver, and that he cannot do.

De facto, the U.S.A. was on a Gold Standard from 1879 to 1933.

oly

On 7/24/2011 8:40 PM, Some Guy wrote:

Mike, you are splitting hairs to a ludicrous degree. You remind me of Clinton's
sophistry in debating what "is" is".
Until FDR's crime spree, the dollar was freely convertible to gold at a set
rate.

If you can't legally require the government to pay you in gold, it
ain't a gold standard in my book. There's no hair splitting involved;
either one has a legal right or one doesn't. If you're saying a
gold standard relies on the faith of the populace, I think we should
agree to disagree.

I won't disagree your categorization of FDR's actions either, but the
run on U.S. gold was well under way before he took office. Even if
Hoover had been reelected the gold standard could not have survived
intact. It had already fallen in England, and France's intervention
to keep the gold standard until 1936 proved to be a horrible mistake.

Nor is it true that "the dollar" was freely convertible to gold at a
set rate because of the different types of notes in circulation. The
U.S. Government never had an obligation to redeem U.S. Notes, Silver
Certificates, or silver dollars in gold, nor any obligation to redeem
Federal Reserve Notes in specie, nor any obligation to redeem National
Bank Notes at all.

Previously you asked me to recheck my history. If you think the
1873-1933 "gold standard" years were any sort of "golden age" of
fiscal and monetary stability and responsibility, I urge you to do
the same.

--
Mike Benveniste -- (Clarification Required)
You don't have to sort of enhance reality. There is nothing
stranger than truth. -- Annie Leibovitz

Jud wrote:

On Jul 22, 4:13 pm, Frank Galikanokus
wrote:


What has laid this country low is republican deregulation in 1999 and 2000 and the Bush
tax cuts.


Despite your perpetual liberal slant and Bush-bashing, the real
problem is runaway spending. Republicans and Democrats alike feel that
it's their job to spend our money, especially if it is beneficial to
their constituency, regardless of what it means to the country as a
whole. I would love to hear your take on the Carter administration
economic policies. Can't blame Bush for them! Oh, and can you also let
me know at what point in time the current administration will accept
responsibility for their own unpopular and failed policies?

How's that stimulus package working out for you?

Actually, all reports have said that the stimulus helped, but not enough.

JAM

"Frank Galikanokus" wrote in message
...
Jud wrote:

On Jul 22, 4:13 pm, Frank Galikanokus
wrote:


What has laid this country low is republican deregulation in 1999 and
2000 and the Bush
tax cuts.


Despite your perpetual liberal slant and Bush-bashing, the real
problem is runaway spending. Republicans and Democrats alike feel that
it's their job to spend our money, especially if it is beneficial to
their constituency, regardless of what it means to the country as a
whole. I would love to hear your take on the Carter administration
economic policies. Can't blame Bush for them! Oh, and can you also let
me know at what point in time the current administration will accept
responsibility for their own unpopular and failed policies?

How's that stimulus package working out for you?

Actually, all reports have said that the stimulus helped, but not enough.

JAM

Those hundreds of billions helped who and what?

On Jul 27, 10:39*am, "Bremick" wrote:

Those hundreds of billions helped who and what?-


The facts are clear, the stimulus has had a positive impact on our
economy. However, Obama's opposition through the drumbeat of Fox News
and hate-talk radio has put out enough lies and misinformation,
distrust and cynicism that the truth is completely distorted. Which is
why the numbers prove the stimulus worked but when you ask people if
it worked they BELIEVE that it did not.

"Gary" wrote in message
...
On Jul 27, 10:39 am, "Bremick" wrote:

Those hundreds of billions helped who and what?-


The facts are clear, the stimulus has had a positive impact on our
economy. However, Obama's opposition through the drumbeat of Fox News
and hate-talk radio has put out enough lies and misinformation,
distrust and cynicism that the truth is completely distorted. Which is
why the numbers prove the stimulus worked but when you ask people if
it worked they BELIEVE that it did not.
________________

I guess I believe we can't really know what would have happened to the
economy if it had been left to itself. Certainly we're not much better off
two years later. I saw some of the things the stimulus money reportedly
was being used for and I don't believe it helped me or anyone I happen to
know. And I didn't even watch FOX News.

Bremick wrote:

"Frank Galikanokus" wrote in message
...
Jud wrote:

On Jul 22, 4:13 pm, Frank Galikanokus
wrote:


What has laid this country low is republican deregulation in 1999 and
2000 and the Bush
tax cuts.


Despite your perpetual liberal slant and Bush-bashing, the real
problem is runaway spending. Republicans and Democrats alike feel that
it's their job to spend our money, especially if it is beneficial to
their constituency, regardless of what it means to the country as a
whole. I would love to hear your take on the Carter administration
economic policies. Can't blame Bush for them! Oh, and can you also let
me know at what point in time the current administration will accept
responsibility for their own unpopular and failed policies?

How's that stimulus package working out for you?

Actually, all reports have said that the stimulus helped, but not enough.

JAM

Those hundreds of billions helped who and what?

Look around. In the cities and small towns I frequent streets and highways are being
repaired. New sewer and water systems are being installed. Stimulus money was partially
responsible for improvements where I work.

I'm sure I'm not the only one that has noticed this.

At least the money wasn't spent on killing tens of thousands of innocent people.

Democrats and republicans will spend all our money and then some. The difference is that
democrats spend the money on people, the republicans spend the money on killing people.

JAM