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From what I've read there is no basis with respect to the etymology, practice, or exchange rates. One of several breakdowns here.
That's a cool story, but 12 cents a bullet sounds way too much for the old west days.
Sounded way off to me too. The 1897 edition of the Sears catalog shows .45 Colt for $1.57 per 100 round box. That is about a penny and a half per cartridge.