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Coins |
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Coins are money of intrinsic value. At one time each coin contained an amount of metal whose value as bullion was equal to the money value designated on the coin. For example, a dime contains 10-cents\' worth of silver bullion; a silver dollar could be melted down and the silver sold for a dollar.
Obviously, problems could arise because of fluctuations in the market price of the metals used. When the market price of gold or silver rose above the minted value of coins, they would be melted down and sold for bullion and would thereby disappear from circulation. There was also difficulty because of clipping and ‘sweating’ coins to try to remove some of the metal value without losing the money exchange value. To keep coins in circulation and in good repair, monetary authorities reduced the amount of valuable metal in coins to a token amount. This meant that coins always have more value as a medium of exchange than as a metal. TF
See also bimetallism; Gresham\'s Law. |
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