with the gold coins’ fineness of 22 carats, or 916-2/3 thousandths.
The law also provided for free coinage of gold and silver coins at the fixed ratio of 15 to 1, and a token coinage of copper cents and half cents. Under the free-coinage provision no charge was to be made for converting gold or silver bullion into coins “weight for weight.” At the depositor’s option, however, he could demand an immediate exchange of coins for his bullion, for which privilege a deduction of one-half of 1% was to be imposed.
President Washington appointed David Rittenhouse, a well-known scientist, as the first director of the Mint. Construction began on a mint building nearly four months after the passage of the Act of April 2, 1792. The building was located on Seventh Street near Arch in Philadelphia.
The first coin struck by the government was the half disme. Fifteen hundred of these pieces were produced during the month of July 1792 before the mint was completed. Additional coins were probably made in early October. There is no historical evidence for the story that Washington donated his personal silverware for minting these coins. A few dismes were also struck at this time or a short while later. Silver and gold for coinage were to be supplied by the public, but copper for cents and half cents had to be provided by the government. This was accomplished by the Act of May 8, 1792, when the purchase of not more than 150 tons was authorized. On September 11, 1792, six pounds of old copper was purchased, and probably used for the striking of patterns. Thereafter, planchets with upset rims for cents and half cents were purchased from Boulton and Watt of Birmingham, England, from 1798 to 1838.
David Rittenhouse—surveyor, astronomer, mathematician, and inventor—was named the first director of the U.S. Mint.
Several pattern coins were prepared in 1792 before regular mint operations commenced. Patterns are test or trial pieces intended to show the size, form, and design of proposed coins. These included Henry Voigt’s silver center cent, a piece smaller than that of regular issue. The small plug of silver, worth about three-quarters of a cent, was evidently intended to bring the intrinsic value of the coin up to the value of 1¢ and to permit production of a coin of more convenient size. Alexander Hamilton had mentioned a year before that the proposed “intrinsic value” cent would be too large, and suggested that the amount of copper could be reduced and a trace of silver added. The pattern cent with a silver center may have been designed to conform to this recommendation.
The cents by Robert Birch are equally interesting. These patterns are identified by their legends, which read LIBERTY PARENT OF SCIENCE AND INDUSTRY and TO BE ESTEEMED BE USEFUL. The quarter with an eagle on the reverse side (designer unknown) belongs among the 1792 patterns devised before regular issues were struck.
The Bank of Maryland deposited the first silver, sending $80,715.73-1/2 in French coins to the mint on July 18, 1794. Moses Brown, a Boston merchant, deposited the first gold in the form of ingots (February 12, 1795) amounting to $2,276.22, receiving silver coin in payment. The first coins transferred to the treasurer consisted of 11,178 cents on March 1, 1793. The first return of coined silver was made on October 15, 1794, and the first gold coins (744 half eagles) were delivered July 31, 1795. The early Mint was constantly vigilant to see that the weights of these coins were standard. Overweight blank planchets were filed and adjusted prior to striking, and many of the coins made prior to 1836 show file marks and blemishes from these adjustments.
Regular Mint Issues
Cents and half cents, exclusively, were coined during the year 1793, and by 1799 approximately $50,000 in these coins had been placed into circulation. This amount proved insufficient for the requirements of commerce, and small-denomination coins of the states and of foreign countries continued in use well into the 19th century.
One of the most serious problems confronting commercial interests prior to 1857 was the failure of the government to provide a sufficient volume of circulating coins. The fault, contrary to popular opinion at the time, did not lie with any lack of effort on the part of the Mint. Other circumstances tended to interfere with the expected steady flow of new coinage into the channels of trade.
Free circulation of United States gold and silver coins was greatly hindered by speculators. For example, worn Spanish dollars of reduced weight and value were easily exchanged for U.S. silver dollars, which meant the export of most of the new dollars as fast as they were minted, and a complete loss to American trade channels.
Gold coins failed to circulate for similar reasons. The ratio of 15 to 1 between gold and silver was close to the world ratio when Alexander Hamilton recommended it in 1791, but by 1799 the ratio in European commercial centers had reached 15-3/4 to 1. At this rate, the undervalued gold coins tended to flow out of the country, or were melted for bullion. After 1800, therefore, United States gold coins were rarely seen in general circulation. As no remedy could be found, coinage of the gold eagle and the silver dollar was suspended by President Jefferson in 1804. It is generally held that the silver dollar was discontinued in 1804, although the last coins minted for the period were dated 1803.
With the lack of gold coins and silver dollars, the half dollar became America’s desirable coin for large transactions and bank reserves. Until 1834, in fact, half dollars circulated very little as they were mainly transferred from bank to bank. This accounts for the relatively good supply of higher-condition half dollars of this period that is still available to collectors. A Senate committee of 1830 reported that United States silver coins were considered so much bullion and were accordingly “lost to the community as coins.”
There was only a negligible coinage of quarters, dimes, and half dimes from 1794 to 1834. It has been estimated that there was less than one piece for each person in the country in the year 1830. This period has been described as one of chaotic currency made up of bank notes, underweight foreign gold coins, foreign silver coins of many varieties, and domestic fractional silver coins. Paper money of that time was equally bothersome. Privately issued bank notes sometimes had little or no backing and were apt to be worthless at the time of redemption. In this period, before national paper money commenced in 1861, notes of the state-chartered banks flooded the country and were much more common than silver coins.
On June 28, 1834, a law was passed reducing the weight and fineness of gold coins, which had the effect of placing American money on a new gold standard. Trade and finance greatly benefited from this act, which also proved a boon to the gold mines of Georgia and North Carolina. Branch mints in Dahlonega, Georgia; New Orleans; and Charlotte, North Carolina, began operations in 1838 to handle the newly mined gold near the source. The various issues of private gold coins were struck in these areas.
The law of January 18, 1837, completely revised and standardized the Mint and coinage laws. Legal standards, Mint charges, legal tender, Mint procedure, tolerance in coin weights, accounting methods, a bullion fund, standardization of gold and silver coins to 900 thousandths fineness, and other desirable regulations were covered by the new legislation. Results of importance to the collector were the changes in type for the various coin denominations and the resumption of coinage of the eagle in 1838 and larger quantities of silver dollars in 1840.
Prior to Andrew Jackson’s election as president in 1828, the Second Bank of the United States had considerable control over the nation’s currency. In 1832 Jackson vetoed a bill rechartering the bank and transferred government deposits to state banks. The action took away some stability from the economy and eventually led to a national financial collapse. By 1837 the country was so deprived of circulating coinage that merchants resorted to making their own “hard times tokens” to facilitate trade. The few available government coins were hoarded or traded at a premium for private paper money, which was often unreliable.
The
