Hidden in Plain View

In 1796, the US issued its first quarter dollar. On the obverse, it displayed the image of Lady Liberty and, above the image (in case there was any doubt about the message) the word LIBERTY was prominently displayed. The coin was minted from silver (90%) and copper (10%).

Over the years, the design of the US quarter changed repeatedly. Then, in 1932, a new quarter (image #1, above) was issued that featured the image of American founding father George Washington. As before, the word, “LIBERTY” appeared above his image – a continuing reminder of the primary principle upon which the US was founded. And, as before, the coin was minted from silver (90%) and copper (10%).

So far, so good.

The quarter remained unchanged until 1965. The new quarter (image #2) was the same in every way, except that it contained no silver whatsoever. It now contained only copper and nickel. (At today’s metals prices, the intrinsic value of the quarter dropped suddenly to 1% of its previous value).

Conceptually, the American people should have been outraged, as they had effectively lost the ability to hold real, redeemable wealth. The coin they would hold in future would not have the value of silver; it would be a mere token. The new coin represented no more than a “promise of value” on the part of the US government.

However, there was no outcry whatsoever. The reason? Because the new quarter still retained the same purchasing power it had had when it was made of silver. As long as the quarter was perceived by all and sundry as having value for the purpose of payment, Americans were content to accept the switch.

In 1999, the quarter’s design did change (image #3). The word “LIBERTY” was removed from above the head of Washington and in its place were the words, “UNITED STATES OF AMERICA.” It might have been argued at the time that those words needed to be on the quarter to remind holders of the coin what nation had issued it. However, those words had always appeared on the reverse of the Washington quarter, and in fact they were still there – a very odd redundancy for a coin, which, by its very size, has little space to spare, even for essential information.

The word “LIBERTY” was still in evidence on the new coin, but it had been moved lower down, beneath Washington’s chin and was now much smaller.

It would seem that the only reason for the change in design had been to diminish the importance of Liberty as an American concept. (If a US government numismatist has another explanation, I would be pleased to hear it.)

In any case, as, in 1965, there was no outcry from the American people – again, for the same reason as before. The coin retained the same purchasing power, so the change in design was simply not an issue.

Readers of this publication may have a different slant on the subject. It may be argued that the two changes in the American quarter reflect the changes in the US as a nation. There can be no doubt that the value of US currency in general has been dramatically reduced in purchasing value since 1932. It is also true that none of the US currency (whether paper notes or metal coins) have any true, redeemable value. They have only perceived value, which is subject to dramatic change, depending upon economic conditions. (In the last century, the un-backed currencies of some twenty nations have been rendered valueless, as a result of hyperinflations.)

In 1796, when the quarter was first minted, the quarter was in itself wealth. The paper bank notes that came later (beginning in 1863) were initially backed by silver and were redeemable. The redemption of US bank notes for silver bullion ended in 1968.

Today, if a US citizen seeks to build up his wealth, he cannot do so by holding the currency of his country. All US currency, whether paper or metal, only represents his faith in the currency to retain its value, which it is unquestionably losing. Therefore, merely by dealing every day in US currency, the holder is paying a hidden tax and his wealth is diminished accordingly.

As to US Liberty, many would agree that that, too, has been devalued, particularly after 1999. Laws such as the Patriot Act of 2001, its expansion in 2011 and the National Defense Authorisation Act of 2011have stripped Americans of their constitutional rights on a wholesale basis.

There is an old saying that, “The best place to hide something is in plain view.” If true, a reminder of what the US citizen has lost may be found in plain view, merely by reaching into his pocket and examining his change.