Like I understand every was priced against the price of gold , but how was like “small change ” worked out would it be a % of a weight of amout of gold bar or something
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You’d get paper dollars, tin dimes, copper pennies, etc., just like now. The only difference is that the government promised to give you a certain amount of gold in exchange for that dollar (or 1/10th as much per dime, etc.) if you wanted it. It’s not that gold was used as currency, exactly, it’s that currency was pegged to gold.
Think of it like casino chips which are now pegged to dollars. It’s not that you’re betting dollar bills at the poker table, it’s that you’re betting chips that are exchangeable for dollars, so the casino economy is dollar-based, even if you never see a single dead president.
The gold-standard economy was gold-based, even though you never saw a single shiny rock.
You’d get paper dollars, tin dimes, copper pennies, etc., just like now. The only difference is that the government promised to give you a certain amount of gold in exchange for that dollar (or 1/10th as much per dime, etc.) if you wanted it. It’s not that gold was used as currency, exactly, it’s that currency was pegged to gold.
Think of it like casino chips which are now pegged to dollars. It’s not that you’re betting dollar bills at the poker table, it’s that you’re betting chips that are exchangeable for dollars, so the casino economy is dollar-based, even if you never see a single dead president.
The gold-standard economy was gold-based, even though you never saw a single shiny rock.
>Like I understand every was priced against the price of gold
That’s…not inherently correct.
The currency was redeemable for gold. So one unit of the paper currency was redeemable for a very explicit amount of gold. From there, fractions of that unit of currency were also redeemable for fractions of that core amount of gold. So a quarter was literally just defined to be a quarter of the core amount of gold, and necessarily had to be a quarter of a dollar…so 25% (hence, 25 cents).
Almost no one would actually exchange gold, though, except out in frontier areas where everyone was there to prospect for gold, and those a lot of people had gold on them.
>Like I understand every was priced against the price of gold
That’s…not inherently correct.
The currency was redeemable for gold. So one unit of the paper currency was redeemable for a very explicit amount of gold. From there, fractions of that unit of currency were also redeemable for fractions of that core amount of gold. So a quarter was literally just defined to be a quarter of the core amount of gold, and necessarily had to be a quarter of a dollar…so 25% (hence, 25 cents).
Almost no one would actually exchange gold, though, except out in frontier areas where everyone was there to prospect for gold, and those a lot of people had gold on them.
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