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The Role of Coin and Currency

Gold had always been valuable because it is so rare. For thousands of years it has been used as money. Today we take money–coins and dollar bills–for granted. Until the 1930s, the United States was on the gold standard which meant that for every one dollar bill there was one dollar’s worth of gold in the U.S. Mint. Dr. Carole Scott, a West Georgia College professor, explains how a $20 gold coin could be melted and sold for $20. That is not true today as mass-produced coins are made of copper, nickel, and zinc. In colonial America, the new settlers produced virtually everything they needed. Money was required only when goods were needed that came from elsewhere. It was not easy to barter or trade farm products over long distances. Dahlonega gold miners did not have money either. Why didn’t they use gold dust and nuggets to buy what they needed? According to Dr. Ray Rensi, a North Georgia College professor, the problem was not knowing how much of the nuggets or gold dust was pure gold. Because the U.S. Mint in Philadelphia was so far away, mine and business owners asked the U.S. government to open a mint in Dahlonega. The mint opened in 1838 and remained in business, stamping gold coins, until 1861 when the Civil War began. The mint never reopened. It was gone along with the easy-to-find gold. The gold rush was over.

Teacher tip: Brainstorm through this scenario with the class: money as we know it does not exist. What would people do when they needed to go to the store for food or clothing?