What is a Dollar?

According to the Mint Act of 1792, 371.25 grains of fine silver or 24.75 grains of fine gold. Just like a yard is 3 feet and a pint is 16 ounces. Get it?


From 1790–1913, the United States dollar was constant. It was tied to gold and/or silver. A dollar bought pretty much the same thing for Thomas Jefferson as it did for Teddy Roosevelt. A careful look at inflation rates from 1790–1913 shows some minor fluctuation, but for the most part, a 1913 dollar was the same as an 1850 dollar, and was the same as a 1790 dollar.

Of course, the pound, the mile, the yard, the foot, the pint, and the degree Fahrenheit, are carefully regulated and kept standard. It would be preposterous to say that back in 1908, the yard was comprised of sixty feet, or that a gallon was made up of eighty quarts. And yet, we accept the degradation and the devaluation of our currency as normal. We can't even compare economic data in our own day and age without saying something like "as measured in 1995 dollars" – since the dollar as a monetary unit is not standard, but is systematically devalued every year.

So, why was there no inflation (devaluation) of the currency until 1913? That's the year the United States created a central bank. The Constitution makes no provision for the Federal government to do any such thing, and the Constitution even specifies that money must be backed by gold and silver. But, of course, the folks that tell us the Constitution is a "living document" will tell us that the dollar simply must be "flexible" (while the same people would never in a thousand years propose a "flexible" foot, pound, or gallon to shrink over the course of time).