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US Dollar Value
Because the currency value was based on the weight of its main component, the relative value of a gold coin or a silver coin actually rose and fell depending on how valuable the metal was. The more or valuable gold became, the more or less the gold piece could buy. The same was true for silver-weight coins. The relative value of the coins' purchasing power changed only with a significant adjustment of the influx or out-flux of those metals within the country's economy.
In 1834, the rising value of gold caused nearly all the gold coins minted to be melted. As a result, the 15:1 ratio of silver to gold ratio was changed to 16:1 by reducing the amount of gold in coins the first devaluation of the United States dollar.
In 1853, the United States unofficially placed itself on the gold standard by reducing the weight of US silver coins, except the US dollar which was rarely used at the time.
In 1861, the United States of America issued its first government-backed paper currency. Congress authorised the Treasury Department to print and issue non-interest-bearing Demand Bills to finance the Civil War. From that date forward, United States currency has been remitted based on face value for both coins and paper bills not based on content relative value.
Demand Bills were replaced one year later by United States Notes.
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