The new currency plummeted in value until Congress was forced to get honest. Congress offered to redeem the paper in gold in 1786, but this didn’t wash with a citizenry already burned by paper promises. After the runaway inflation of continental dollars, I explained,Ī currency reform in 1780 asked everyone to turn in the old money for a new one at the ratio of 20 to 1. That’s a story often left out of history classes but I summarized it in The Times That Tried Men’s Economic Souls. Mooney’s bill may stimulate a long overdue discussion.Īmerica is a nation whose very independence was first jeopardized by unbacked paper money only to be purchased later by precious metal.
In the meantime, we can at least hope that Mr. That’s a sad commentary on the general state of economic knowledge.
Sound money, whether it’s gold or silver or paper that is “backed” by one or both metals, may not acquire a sizable constituency again until a monetary disaster demands it. If enacted into law, it would require public disclosure of the federal government’s gold holdings and eventually define the dollar as a weight of gold.įor the moment, the bill’s chances of passage are as nil as nil gets. Early this month, Congressman Alex Mooney of West Virginia introduced the Gold Standard Restoration Act (H.R.
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