Self-Correction of Silver, Gold, and Currency

A single-leaf circular recently loaned to us by Bill Shamhart reveals the complexity of mid-19th century monetary transactions in America. Issued by the Philadelphia house Cronise & Co in 1857, this brochure is addressed making reference to the Philadelphia Ordinance of 1856, which standardized street numbers in the City of Brotherly Love.

Various exchange rates are expressed for silver coin (prior to the weight reduction in 1853), gold coin, and paper money, with the one southern city (Richmond, VA) discounted the most, at 7 and 8 percent. Pre-1853 halves were worth more than pre-1853 quarters ($1.04 per dollar face value, vs. $1.02½), suggesting that quarters wore harder in circulation, or simply that it was more convenient to handle half dollars in bulk. The same idea is seen with California territorial gold pieces, for which the $50 and $20s were discounted at 0.5% to 1.0%, while $10s were exchanged into silver at a 2% discount. In any case, the clear message is that silver, gold, and paper money were not convertible at par, and that large conversions resulted in non-trivial brokerage fees.

Image: Extract from displaying exchange rates for silver coin.

Link to on Newman Portal:
https://archive.org/details/BankingHouseOfCronise