Were Dollars debasing before the gold window closed in 1971?
''July 23 marks the 50th anniversary of the Coinage Act of 1965, which stripped U.S. coins of silver and made legal tender out of base metal slugs. It's an anniversary that comes at an apt time, as Congress considers monetary reform.
This discussion has been quietly taking place in recent months, in the Senate Banking and House Financial Services committees. Rep. Kevin Brady (R., Texas), vice chairman of the Joint Economic Committee, recently reintroduced a proposal for a Centennial Monetary Commission as the Federal Reserve starts its second century.
The anniversary of the 1965 Coinage Act is a reminder of why reform is needed. Speaking from the White House Rose Garden, President Lyndon B. Johnson called the law he signed a 'very rare and historic occasion.' It certainly was; it superseded the coinage act drafted by Alexander Hamilton and passed by Congress in 1792.
The original coinage act established the United States Mint and declared the dollar as the 'money of account' for the new republic. It defined the dollar as 371-1/4 grains of silver or the equivalent in gold; the penalty for debasing coins struck under the law was death.
When LBJ signed the 1965 act, the value of a dollar was almost exactly the same as it had been in 1792 -- 0.77 ounces of silver. Despite some downs and ups, on average it had been remarkably steady for the long span.
That was because since Hamilton's day, as the president noted, 'our coinage of dimes, and quarters, and half dollars, and dollars have contained 90% silver.' Not any more: The new dimes and quarters would 'contain no silver.' Instead they would be 'composites, with faces of the same alloy used in our 5-cent piece that is bonded to a core of pure copper.' The new half dollar would have 80% silver on the outside and 19% silver inside.
In the face of a 'worldwide shortage of silver,' LBJ said, 'the only really prudent course was to reduce our dependence upon silver for making our coins.' Then the president made claims that look, in light of history, laughable.''