The paper money in use today can be exchanged for any number of goods and services from private vendors, but if you were to take it to the United States Treasury and ask for a commensurate amount of gold, you would be turned down. The United States no longer does that, although for much of its history it used to guarantee every note with an amount of gold in its storage — and not always gold, either.

On this day, March 14, in 1900, Congress passed the Gold Standard Act. The text of it read “[T]he dollar consisting of twenty-five and eight-tenths grains of gold nine-tenths fine … shall be the standard unit of value, and all forms of money issued or coined by the United States shall be maintained at a parity of value with this standard.”

Silver, along with gold, was used in place of and to back official currency in the United States. The gold-silver exchange rates were floating, until fixed at 15:1 by Thomas Jefferson. They occasionally changed thereafter being effectively cancelled by the Coinage Act of 1873. The 1900 Gold Standard Act just made official what was already standard practice at the time.