Trade Me In (If You Can) Trivia Quiz

Answer: inflation

Colonial America was a monetary chaos. Coins foreign and domestic circulated side by side, and anybody from private individuals to state governments could issue them if they had the resources. Even more fun was the issue of paper money. States issued America's first paper money -- continental dollars -- without any consistency whatsoever.

But while trying to figure how much change you would have to give for two-thirds of a dollar or twelve shillings (and yes, these were issued side by side!) was annoying, the inflation that followed from the overissue of them destroyed their value quite thoroughly and sparked the addition of gold- and silver-backed money in the Constitution.

Incidentally, those that did survive have become quite valuable!

Answer: it would become worthless

The Free Banking Era lasted from 1837 to 1863, and is lovingly known as the Wildcat Bank Era. Why? Well, it referred to banks being set up to issue money, only the banks were more accessible to wildcats than people. This was a time when the Second Bank of the United States had failed to resecure its charter, and thus only private entities were left to issue paper money.

As any bank could issue its own money, and many did not last for very long, it wasn't too difficult to find yourself holding worthless money if you accepted it.

The practice was outlawed in 1863 during the American Civil War, which also resulted in the establishment of a system of national banks.

Answer: interest bearing note

The United States was really hard up for money during the Civil War of the 1860s. People hoarded any and all money they would get a hold of, and that led to a variety of creative measures to fill the shortage. One of these measures were interest bearing notes.

These notes, while being spendable money, also had the power of a bond or treasury certificate: they were accumulating interest! The interest was set at a fixed rate and redeemable a few years after being issued. The terms of redemption for interest were inscribed on the reverse of the note.

Answer: postage stamp

Coins slowly disappeared during the Civil War as people hoarded them. In addition to things like interest bearing notes and fractional currency, many private issuers created their own tokens and money. In the case of John Gault, he got the idea to encase postage stamps and pass them as essentially being coins.

He made a profit by charging for advertising on the reverse of this coin substitute. As things returned to normal, the demand for such money substitutes fell, and most of these were destroyed to get at the stamps which were legitimately usable. Those that survived are very difficult to find these days.

Answer: True

The trade dollar has a unique and unusual history among American coinage. They were created to trade to East Asian countries, particularly China, and were a bit larger than regular American dollars. However, the price of silver fell to the point that the dollar had less than a dollar of silver in it, causing its demand to drop in China. People started circulating them in the United States instead, as a way of profiting from the difference between face value and bullion value.

Despite its demonetization by Congress, orders from private entities to for business strikes continued through 1878 until John Sherman ended the practice.

Answer: none whatsoever

Silver certificates were issued in the United States from 1878 to 1964 in denominations as large as $1000. They were created in part due to protests of the United States being on a gold standard, and also because people were not very trusting of paper money at the time. Demand for silver grew steadily over the decades, and the ability to redeem certificates for silver were reduced and phased out until 1968, when they were completely halted. Silver certificates can still be spent as regular money, but are not at all backed by metal.

Many are common, and well-worn later dates have minimal numismatic value.

Answer: gold

As part of measures enacted to combat the Great Depression, Franklin Roosevelt signed Executive Order 6102 in 1933. The hoarding of gold coins, bullion, and certificates -- which were redeemable for their value in gold -- was was made illegal. And yes, people were prosecuted for failing to trade in their gold.

As a result, a lot of gold and gold certificates were redeemed as regular money, making those that survived fairly rare. Gerald Ford ultimately repealed the ban in 1974, and Americans have been free since then to own gold (at a much higher price than it was at in 1933).

Answer: double eagle

When Franklin Roosevelt outlawed the possession of gold in 1933, a large batch of double eagles had already been minted that year and were ready for distribution. But because they were not released before the outlawing, they were all remelted and none were ever issued for people to own or spend -- or so it should have been.

As it turns out, a number of them escaped the melting pots, and due to a chain of events, exactly one of them is legal to own. Any others that are out there can and will be seized by the Feds. Just ask Israel Switt, who had connections to the mint and at one point had as many as 20 of them. Most of those were confiscated in 2005.

Answer: scrip

Scrip is money that isn't actually money. It's "money" that any individual or entity can issue as a sort of IOU for a good or service, and redeemable at the issuer's mercy. Remember, widespread abuse with privately issued scrip/"money" was what led to the United States outlawing the creation of all money other than by itself in the 1860s.

But that doesn't mean you can't issue it: all you have to do is label it as a gift certificate instead. Wooden nickels have been issued as memorabilia and promotions for decades, and some can even be redeemed if you go through the trouble of tracking down the original issuer.

Answer: for goods at military stores

The Army and Air Force Exchange Service, an institution of the Department of Defense, issues pogs to military personnel, and they are intended to be redeemed at AAFES stores. Pogs are cheaper to make and ship than regular coins are, and are usually issued in limited areas. Denominations are issued at face values of 5, 10, and 25 cents, which are higher than they sound due to the relative cheapness of goods at such stores.

While they act like money, they are labelled as gift certificates (since the AAFES is not allowed to issue 'real' money) and are redeemable at any AAFES store or whoever will take them as exonumismatic curiousities.