| Your raccount of the discovery of gold in California led me to look into the effects the gold discoveries of 49 and later the silver discoveries of the late 60's, had on the relationship between gold and silver.It caused severe disruptions.Gold became worth less relative to silver then, within 20 years and the discovery of lots of silver, silver lost value to gold.There was alot of arbitrage between face value and bullion value leading to hoarding and then disgorging( gold driving out silver,bad money driving out good, then silver driving out gold) At on point, after 1878 and the Bland Allison and Sherman Silver Purchase acts,silver mine owners nearly forced the treasury into bankrupcy by forcing the gov to buy silver at inflated prices, while being paid in treasury notes which were redeemed always for gold which was then systematicly witheld from the market to force an increase in its value .{The Genovese bankers (city not mafia)handeling Spains finances in the 16th century did much the same with spanish silver to great profit} .The result, gold was at a premium and the treasury ,by 1893 ,had no gold(only silver) to pay international debts which required payment in gold: the end result a gold squeeze leading to 419 failed banks and panic and depression . |
