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The E-Sylum:  Volume 9, Number 21, May 21, 2006, Article 11

A SILVER COINAGE PROPOSAL

Ralf W. Böpple of Stuttgart writes: "On the discussion on rising
prices of metals, I have come across the following:  There is a
rather "unique" proposal to battle with rising metal prices in
coins. An organization in Mexico is lobbying for the government
to re-introduce a circulating silver coin by monetizing the silver
"Libertad" one-ounce bullion coins, that is, make them legal
tender at an established value in Mexican pesos.

Obviously, if silver prices rise, there will come the famous moment
in which the Libertads will be melted for their bullion content.
The clever countermeasure: the Banco de México should raise the
official peso value of the coin every time the silver price comes
close to the denominated value.

This may be a solution to save the penny: the U.S. Government
could simply declare that the official value of the cent be two
cents from now on. I leave it to the readers to decide for themselves
on the economic, political and social consequences of such a monetary
regime.

Information on this can be found at www.plata.com.mx Many documents
on this site are in English, a brief overview of the whole idea can
be seen under Full Story "

[Such a proposal is not unheard of.  Until 1857 foreign coins were
legal tender in the United States, and passed at the value of the
bullion.  At the height of the Civil War specie panic, as coinage
disappeared following a rise in the price of silver, one of the New
York newspapers proposed a similar scheme.  I found this editorial
while researching microfilmed newspapers of the era.  I don't have
my file handy, but do recall that the proposal stated that

the 10 cent coin shall pass for 12 cents
the 25 cent coin shall pass for 30 cents
the 50 cent coin shall pass for 60 cents
-etc-

-Editor]

  Wayne Homren, Editor

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