grains of pure silver, as best expressing the actual average value of the coin in use. 2. That the decimal system was of demonstrated superiority over the duodecimal of Great Britain. 3. That inasmuch as the undervaluation of either metal would cause its exportation, thus shifting the standard to the other, which might result injuriously, and since it was very desirable to have coins of both metals in actual use, the ratio should conform as nearly The ratio. as possible to the commercial ratio, rather than follow any specific European precedent. He therefore recommended the ratio of 15 to I. 4. That the silver dollar was the equivalent of 24.75 grains of gold, and therefore a gold dollar containing that quantity of metal be also provided for, in order that there might be a unit coin in each metal. 5. That the fineness of the coins should be eleventwelfths or .9163, corresponding with the British standard of fineness for gold; the alloys being for gold coins, Alloy and silver and copper; for silver coins, copper only. 6. That no mint charge should be imposed upon the bullion brought for coinage, the cost thereof being properly a general charge rather than one to be imposed upon specific individuals, and to impose a charge might influence prices in international relations, being in effect a reduction of the standard of the coin, as compared with bullion. mint charge. 7. That foreign coins should be permitted to circulate for one year, that thereafter certain foreign pieces might be tolerated for another year or two; anticipating that the mint would be prepared to provide all the Foreign coin needed, he concluded that after three years the use of foreign coins should be prohibited. Hamilton's report was reviewed by Jefferson, who, in a short letter, expressed concurrence upon the bi coins. Coinage Act of 1792. metallic proposition and other features of Hamilton's plan.1 Congress gave Hamilton's recommendation attention and passed a resolution for the establishment of a mint on March 3, 1791, but it was not until April 2, 1792, after being spurred by President Washington, that the act establishing a coinage system was finally passed. In general, Hamilton's recommendations were adopted, but Congress refused to provide for a gold dollar, thus partly destroying Hamilton's ideal of a bimetallic standard, and altered the fineness of the silver coins by substituting a fraction resulting in .892,43.2 In all other particulars the law was practically an enactment of Hamilton's own language into a statute. The act, after providing for the organization of the mint directs, in Section 9, the coinage of the following pieces: Ratio 15 to 1. Section 10 provides for devices on coins. Section II fixes the ratio at 15 to 1, the language being 1 See Appendix. 2 It is not clear why this was adopted. See Appendix. "That the proportional value of gold to silver in all coins which shall by law be current as money within the United States, shall be as 15 to 1, according to quantity in weight, of pure gold or pure silver; that is to say, every 15 pounds' weight of pure silver shall be of equal value in all payments, with I pound weight of pure gold, and so in proportion as to any greater or less quantities of the respective metals." Section 12 fixes the standard of fineness for the gold coins at eleven-twelfths, the British standard, equal to .9163, the alloy to be silver and copper, not to exceed one-half of the former metal. The fineness of the silver coins was by Section 13 fixed at 1485 parts pure metal and 179 parts copper alloy, equal to .892,43.1 No charge was imposed for coining the bullion brought to the mint, unless the depositor preferred to have payment immediately, instead of awaiting the coinage of the bullion, in which case a deduction of one-half of one per cent was to be made. A strict provision against giving preference to depositors was included in Section 15. Section 16 declared that the gold and silver coins. provided for "shall be a lawful tender in all payments Legal whatsoever," abraded coins to be legal tender for the tender. relative weight thereof. After prescribing directions for the officers and imposing the penalty of death for fraudulently debasing the coinage or embezzlement, on the part of such officers, the act concludes (Sec. 20) with the provision that "the money of account of the United States shall be expressed 1 It appears that notwithstanding the statute, the first and second directors of the mint coined dollars at the fineness of .900, thus giving them 374.4 grains of pure metal. This appears to have been tacitly sanctioned by both Jefferson and Hamilton. The ratio was thus altered to 151 to I. See White's Report, No. 496, 22 Congress, 1st Sess., p. 17; quoted by Watson, Hist. of Amer. Coinage, p. 230. First bimetallic law. in dollars, dismes or tenths, cents or hundredths, and milles or thousandths," and the accounts of public officers were to be kept and proceedings of courts to be had accordingly. When the act first passed the Senate it provided for an impression on the coins of the head of the President for the time being, in imitation of the coinage of most European countries. This proviso was stricken out in the House of Representatives, and after some discussion the Senate concurred. Much to Hamilton's chagrin the business of the mint was attached to the Department of State, under Jefferson, and not until after Hamilton, when resigning, called attention to this anomaly, was it transferred to the Treasury Department.1 This legislation based upon the report of Hamilton was the first attempt in the world to adopt by law a bimetallic standard with all the requisite features of free and unlimited coinage of both metals and giving full legal tender power to both. Hamilton's conception of the proper ratio was not far out of the way, as is shown by the table giving the commercial ratio for the period. Hamilton was not aware that the relative production of silver was increasing, so that the commercial ratio would very soon be changed, and naturally when in 1803 France adopted a ratio of 15 to 1 the disappearance of gold from this country resulted. It was thus early in the history of the United States demonstrated that it was impossible to maintain independently a ratio between the metals differing materially from that fixed by the world's markets. On May 8, 1792, Congress passed an act providing for the purchase of 150 tons of copper for the coinage 1 Life of Hamilton, Vol. VI., p. 186. of cents and half cents, and that when $50,000 of these Coinage begun. pieces had been struck, public notice be given that after six months from that date no other copper pieces were to pass current, or be offered, paid, or received in payment for any debt, etc., under penalty of forfeiture and fine, recoverable by the informer. The first coins were struck in October, 1792, being a small amount of half dimes, referred to in President Washington's address to Congress at its following session: "There has also been a small beginning in the coinage of half-dismes, the want of small coins in circulation calling for the first attention to them." age laws. The weight of the copper coins was reduced by the Other coinact of January 14, 1793, to 208 and 104 grains respectively. By the act of March 3, 1796, further reduction in weight by proclamation of the President was authorized. Sundry other acts relating to the mint and coinage were passed prior to the general revision of 1834. It is necessary to note only the following: March 3, 1796, authorizing a charge upon bullion deposited for coinage if below the standard. April 24, 1800, March 3, 1823, and May 19, 1825, further providing for charges upon bullion deposits not suitable for immediate coinage, whether above or below the standard. foreign coins. It was not until February 9, 1793, that Congress Valuation of modified the existing valuations of foreign coins.1 From and after the first of July following the date of the act, British and Portuguese gold pieces were to pass current and be legal tender at the rate of 100 cents for every 27 grains' weight, French and Spanish gold pieces at 100 cents for 27 grains, the difference being due to the 1 Fixed by tariff law of July 31, 1789. |