In November 1766 Maryland authorized the issuance of paper
money with dollar denominations. These were issued early in
1767 and constitute the first official use of the dollar as
the name for a monetary unit in the colonial American economic
system. Values from l/9th of a dollar to $8 were issued. It
was a historic moment when the Maryland government officially
recognized what the public had been using in terminology for
For some curious reason little numismatic attention has been
paid to this first issue of "dollars." There were
12,000 printed of the $1 value. For those who collect the
dollar, there could be no finer way to begin a collection
than with the Maryland issue of 1767. In due course other
colonies adopted this policy, and in 1775 the Continental
Congress ordered currency printed in dollar denominations.
One of the great numismatic
mysteries of the colonial era is the so-called Continental
"dollar" of 1776. Almost certainly the original
dies were prepared in order to strike a silver dollar, equivalent
to the Spanish eight reales. It did not take long for those
behind this issue to realize that bullion was going to be
a problem, not to mention the potential of inflation from
ever-increasing amounts of paper being issued. Those who believe
that the 1776 Continental dollar was semi-official can point
to the fact that the Continental Congress did not issue a
one-dollar bill from 1776 to 1778, perhaps in hopes that a
dollar coin could circulate.
The rapid inflation in the
United States after 1777 doomed any proposals for a hard currency
until the rebellion was over. With the coming of peace in
early 1783, official thoughts turned to coinage once more.
Minister of Finance Robert Morris, on his own authority, had
patterns of silver and cop¬per made. None of these, however,
was of dollar size.
Federal Mint Proposals
of the 1780s
Various proposals were made in the 1780s for a federal mint.
All foundered on a lack of money as well as general opposition
to such plans by those with a vested interest in producing
large quantities of copper coins, such as state governments.
One of the most interesting suggestions, however, was formulated
by Thomas Jefferson in 1785-1786. He recommended a coinage
of gold, silver, and copper. The largest silver coin was to
be a dollar, containing 375.64 grains of pure silver while
the ratio of gold to silver in the coinage system would be
set at 1 to 15.47.
Throughout the 1780s, during
an era of hard times, the Spanish dollar and its fractions
remained the money of choice for the broad mass of citizens
in America. These coins were always in short supply, but used
by the common people in purchas¬ing the necessities of
life. Copper coins from a variety of sources1 were also used
in 1787 the Constitution was adopted
by delegates in Philadelphia. Over the next few months a majority
of state legislatures ratified it. The new government, under
President George Washington, took office in New York City
during the latter part of 1789, but in early 1790 moved to
Philadelphia. (The capital was removed to Washington, D.C.
in 1800.) It was not long after the arrival of delegates in
Philadelphia that Congress began seriously to consider the
state of the nation's economy in general and its monetary
system in particular.
Major events sometimes need
but a tiny push to become reality and thus it was with our
monetary system. An obscure South Carolinian named John Hinckley
Mitchell was well acquainted with Matthew Boulton, the famed
English private coiner and inventor. Mitchell decided, with
very little input from Boulton, to become the latter's agent
in America in an effort to obtain a lucrative minting contract
for American coinage.
Mitchell sent the proposal
for contract coinage to the government and, in due course,
this was forwarded to Secretary of State Thomas Jefferson,
newly returned from his diplomatic post in France. Jefferson
was asked to pass on the proposal for several reasons, including
his involvement in the 1786 coinage schemes and his known
dislike of having money coined abroad.
As expected, Jefferson advised
Congress to disregard the Mitchell effort although the Secretary
of State admitted that Mitchell's coinage (i.e., Boul-ton's)
was the best in the world. Because Boulton was not mentioned
in Jefferson's report to Congress, some numismatic writers
were later misled into believing that Mitchell had his own
mint in Europe. One wonders what Boulton thought about all
Hamilton Reports on
the Monetary System
Congress, as a result of Jefferson's message, asked Secretary
of the Treasury Alexander Hamilton for a complete report on
a mint and monetary system.
Hamilton and his small group of employees worked on this project
for the next several months and asked many experts, such as
merchants and importers of gold and silver, searching questions
designed to collect the maximum amount of information.
The secretary also ordered careful assays of silver and gold
coins to be made, especially on those of Spain. It was clear
that the Spanish silver dollar, or eight reales, would be
the basis of our silver coinage, and Hamilton was determined
to learn all that he could.
The Spanish, because of internal
problems with their economy, were somewhat secretive about
their coinage and had reduced the amount of silver in the
dollar and its fractions without making this fact known. One
source indicates that the Spanish dollar in 1791 was supposed
to contain about 375 grains of pure silver, though it is not
clear if all their mints were that accurate in the final product.
In determining the precise
weight of the pure silver in the Spanish eight reales coin,
Hamilton had to consider two points: the weight and fineness
of the coins being issued in 1791 and the amount of pure silver
in the average piece of eight circulating in the western hemisphere.
Because of the change in the purity prior to 1791, the secretary
decided to use the amount of pure silver in the average coin.
Some scholars later charged that this was a mistake, and the
1791 Spanish mint purity ought to have been used, but this
view has equal problems. Hamilton was forced to work in a
vacuum. However, his study was the best that could be done
in a nation far removed from the money markets of the world,
London and Amsterdam.
Federal Mint Authorized
Hamilton's report was presented to Congress on January 28,
1791, and has long been considered a classic in its field.
Because of the complex nature of the report and the several
different topics covered, it took the congressmen considerable
time to digest all that had been presented. At length, on
March 3, 1791, Congress passed a resolution authorizing the
president to establish a mint and hire those persons necessary
to carry out the work.
Although, in close scrutiny,
the resolution actually was of little direct value and nothing
was accomplished under its mantle, still it showed the resolve
of the legislators to have a mint and national coinage. (It
is interesting to note that nineteenth-century mint directors,
especially those in office before 1850, considered the March
1791 resolve to be the basis of the mint system and not the
law of April 1792.) The president was simply unable to accomplish
much under the terms of a joint resolution.
President Washington's annual
address to the joint Congress for 1791 came on October 25,
and he pointed out to the assembled legislators that the resolution
was hardly what was needed; instead a law should be passed
that would spell out in necessary detail what was to be done.
Merely saying that there should be a mint was not enough.
The Senate responded by appointing a special committee, chaired
by Robert Morris, to draft the necessary legislation.
The Morris committee, after
its own investigation, proceeded to write a draft bill for
consideration by the full Senate. On December 21, 1791, Morris
formally presented the bill but parliamentary considerations
dictated that little real debate would occur until after the
third reading although it is not clear if the bill actually
was read in its entirety; then as now, it is likely that such
regulations were honored more in the breach than in reality.
At any rate the committee
agreed with Hamilton that the dollar would contain 371.25
grains of silver, but on the other hand should have a gross
weight of 416 grains, producing the odd fineness of 1485/
1664 (892.4+/1000). Congressmen felt that this was necessary,
one would assume, in order to have the prestige of a dollar
coin equal in size and weight to the famous eight reales of
New Coins to Portray Washington?
When real debate began on the bill in the Senate, on January
9, 1792, the question of the pure silver in the dollar was
barely broached, if at all. (The official record in that era
merely reported the general thrust of speeches, not the actual
words.) The most controversial section of the Morris draft
legislation concerned the placing of the current president's
head on the obverse of the silver and gold coins.
After heated debate, the Morris draft bill was accepted by
the Senate more or less intact; it was then sent to the House
of Representatives. The House chose to read the legislation
with great care and it was not until March 24 that representatives
got around to formal discussion of the bill and its merits.
The House rejected the concept
of the president's head on the coinage and replaced it with
one of their own: the head of Liberty. The revised version
of the bill was returned to the Senate, which refused to accept
the Liberty head provision and reaffirmed the original stand.
The House now did the same as before and the bill was returned
once more to the Senate; the latter finally gave in and accepted
the House version. President Washington signed the bill into
law on April 2, 1792.
There is a tradition that
the president personally lobbied House members in order to
kill the provision about the presidential profile appearing
on the coinage. While this may well be true, it also seems
likely that the Chief Executive would at least have been consulted
by Senator Morris before the draft bill had been submitted
and thus given his approval of the idea. Perhaps Washington,
after the House debate, had a change of heart and persuaded
key Senators to vote for the House version.
With the adoption of the April
2 law the nation was now on the road toward a mint and coinage.
It would be many years before the system worked for the benefit
of all citizens, but the seed had been planted and would grow
into an impressive tree as the years passed.
Flowing Hair Dollars 1794-1795 David Rittenhouse
Well before the adoption of the new Mint law on April 2, 1792,
President Washington had chosen David Rittenhouse, an eminent
scientist of international renown, as the first director of
the new institution. Because of poor health, Rittenhouse had
been loath to accept the post and even then had agreed only
to a temporary directorship.
Once the Mint law had been
signed by the President, Rittenhouse was free to proceed,
although he had already taken some tentative steps toward
putting the new institution on a sound footing. In particular
he had engaged, probably in March, an artist named Birch to
engrave cent dies; this same artist would also do the half
disme and disme dies in the weeks following the adoption of
One of Rittenhouse's early
choices for his staff was Henry Voight (or Voigt), a watchmaker
of Philadelphia, to be the first chief coiner. Born in Pennsylvania,
Voight had nevertheless gone to Germany before the Revolution
to serve an apprenticeship in a small German mint. According
to his own statement, he had learned all the skills necessary
for a mint except that of engraving. It is thus ironic that
Voight also served as unofficial engraver at the Mint between
December 1792 and June 1793.
Although 1,500 half dismes
were struck in July 1792, from silver believed to have been
supplied by the president, nothing was said of striking dollars
or even half dollars. Until September 1792 the institution
was housed in the cellar of a private Philadelphia building
at Sixth and Cherry streets owned by John Harper. The latter
not only sold items of value to the Mint, but had been one
of the coiners of the New Jersey copper cents in the 1780s.
On July 31 the foundation
stone (not cornerstone as is sometimes stated) was laid by
David Rittenhouse, and construction of the coinage building,
or "shop" as it was to be called by Chief Coiner
Voight, got underway. There was also a double building at
the front of the Mint lot (facing Seventh Street) whose construction
was started shortly thereafter. In early September 1792 progress
was so far advanced that Rittenhouse was able to move staff
and machinery into the new location.