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I think the "logic" was something to the effect that people won't drive as fast if they don't know how fast they are going. This went into effect sometime in the late 70's and was finally repealed in the mid to late 80's.
When the Ford brought the Mustang SVO out, they pulled a fast one on the Feds. The Speedo had markings up to 140, but the numbers only went up to 85. Met the letter of the law. :)
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