The latest article in Harvey Stack's blog series is about the great changes in gold and silver pricing in the early 1970s, and the effect on the coin market. -Editor
The year 1971 continued the inflation of 1970, with the value of precious metals advancing each month. The public believed that silver would continue to rise, and the search
for earlier silver coins in change grew more intense. Melting of silver coins was allowed and the value of each ounce of silver advanced. Speculators and investors crowded the
market and the demand was stimulated further as more people learned of the increasing value of each U.S. silver coin struck before 1965.
For gold it became necessary to first advance the value of an ounce of gold from the original value of $35. As it got to $42 at the end of 1970, President Nixon "closed
the gold window," so that the Treasury could officially raise the value to $42 per ounce. With the window closed, gold was no longer sold by the United States. Gold
certificates, earlier redeemable for an ounce of gold at the U.S. Assay office, were no longer exchangeable.
All these inflation-motivated actions caused a temporary halt on the dollar and its redemption. Only in special cases were foreign government obligations met with gold for
notes, bonds or certificates. These actions, that made gold and silver more valuable in comparison with the dollar, slowed for a short time the drain on the United States' supply
Counterfeiters, especially those dealing with coins from outside of the United States, found it easier to make coins of a given weight with a lower gold content. These false
coins continued to be a problem on the market. We never returned to having imports of gold coins limited, but at the Custom House they were examined more carefully, and the flow
of counterfeits was somewhat restricted.
Educated dealers, collectors, pawn brokers and precious metal dealers formed alliances to try to deter the false coins from the market place, including through the Professional
Numismatists Guild. But the precious metals market was too large for the relatively few dealers who were knowledgeable to control the problem. The Congress of the United States
had meetings to investigate how to stop these counterfeits from continuously flooding the market, weakening the value of genuine pieces and causing losses and disillusionment
among collectors. It took Congress, until 1973 to call a major meeting of hobbyists to testify and suggest remedies to the abuses that were plaguing all hobbies, not just
numismatics. I will say more about that meeting when I get to the happenings of 1973.
To read the complete article, see:
Harvey Stack Remembers: Growing Up in a Numismatic Family, Part 56
To read the earlier E-Sylum article, see:
HARVEY STACK'S NUMISMATIC FAMILY, PART 55 (https://www.coinbooks.org/v22/esylum_v22n42a15.html)
Wayne Homren, Editor
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