in 550 bc, the gold-silver ratio was 10:1. during the roman empire, the ratio was 12:1, meaning it took 12 ounces of silver to buy one ounce of gold. the u.s. government fixed the ratio at 15:1 with the coinage act of 1792, when it became clear the "continentals" that were issued, backed by nothing, were rapidly devaluing. approved by the states in 1778, the articles of confederation gave both the states and congress the authority to coin money. during the american revolutionary war, the continental congress issued paper currencycalled continentalsto help fund the war. continentals, which were not backed by a physical asset like silver or gold, quickly lost value. both the colonies and congress issued enormous amounts of debt certificates to cover their war expenses, which resulted in the rapid depreciation of all forms of paper currency. > in 1777, $1.25 in "continentals" could buy $1 in gold or silver. > by 1871, it takes $100 continentals to purchase the same. in response to the crisis created by fiat, unbacked currency, the coinage act of 1792 is passed by congress. the coins minted were eagles, half eagles, and quarter eagles, minted from gold, and worth $10, $5, and $2.50, respectively. dollars, half dollars, quarter dollars, disme, and half disme were minted from silver and were worth $1, $0.50, $0.25, $0.10, and $0.05 respectively. cents and half cents were minted from copper.
United States