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SILVER DOLLARS - EARLY SILVER DOLLARS

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American Paper Dollars
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 decades.

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 of this.

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 Spain.

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 the law.'

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.



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