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CHAPTER 11 



BLACK MARKETS 



Black Markets in Currencies 



ALTHOUGH this generation of Americans is unfamiliar with 

 the so-called black markets, they are as old as the centuries. 

 Black markets in currencies and precious metals are world- 

 wide and history-old. A black market exists when the market 

 price for a commodity is higher than the legal, fixed, ceiling 



price. 1 



Our First Dollar 



In determining the value of currencies such as the United 

 States dollar, the English pound, the French franc, and the 

 like, each country fixes by law the metallic content of its 

 coins. By that process it sets the legal price at which it will 

 buy and sell the precious metal. 



Alexander Hamilton, an idol of the Republican Party, was 

 a bimetallist. He proposed to Congress that our currency be 

 called a dollar. On April 2, 1792 the dollar was fixed as fol- 

 lows: 



Dollar Pure metal, Price per fine Ratio 



grains ounce 



Gold 24.75 $19.39 



Silver 371.25 1.29 



1 There could also be a black market by sales at prices below the fixed 

 price. 



