This may only interest an old economics professor, but indulge me.
When you see an Old West movie, you see them giving coins to the bartender. In the old movies, a cowboy would walk in and throw a silver dollar down on the bar and say, “A drink for everybody in the place!”
It was fun scene, because the silver dollar made a resounding clang on the bar.
And it could buy a full round of drinks.
Obviously a dollar was a different thing then. You could get a free drink in many bars if you bought a nickle beer.
The dime, quarter and half-dollar you might have in your pocket are still the same size as the pure silver coin that used to buy so much.
If you walk into a bar today, throw two fifty-cent coins on the table, and say “A drink for everybody,” you will still get a free lunch, but it will be at the psychiatric ward.
But if you want to know what size the coins were in the Old West, the answer is right there in your pocket.
What about gold coins?
It happens that gold weighs almost exactly twice as much as silver, 1407 pounds per cubic foot for gold while silver weighs 705 pounds per cubic foot. Gold was worth sixteen times as much per ounce back in the Old West.
A gold coin the size of today’s dime was twice as heavy as a silver dime and was therefore worth 32 times as much.
Do the arithmetic and you will find that a gold coin the size of a dime was worth $3.20.
It is always a shock to someone who sees an old gold dollar for the first time to notice how SMALL it is. A gold dollar was less than a third the size of the dime in your pocket.
The British pound, called a “sovereign” back then, was the size of one and a half dimes.
Big name, small coin.
So when you see the pitifully tiny amount of gold a miner panned out in a day back then, be impressed. A tiny bag of gold dust was a lot of money.
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