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The Jefferson Plan

United States Gold Coins are Born

Gold Rush | Jefferson Plan (United States Gold Coins
This article is from Gold Rush,
by Arlyn Sieber & Mitchell A. Battino

Mint Profiles

Carson City (Mint)
The Carson City, Nevada, branch mint was established in 1863 and was another effort to bring coin production closer to bullion sources, specifically the Comstock Lode. The Civil War delayed the mint’s opening until 1870. Until it ceased coinage production in 1893, the Carson City mint struck silver dime, 20-cent, quarter, half-dollar, and dollar coins, and gold $5, $10, and $20 coins. A “CC” mint mark denotes its production.
West Point (Mint)
This facility was built in 1937 as the West Point Bullion Depository, an adjunct of the New York Assay Office. It produced one-cent coins without a mint mark from 1973 to 1986. It was officially designated a mint in 1988. In more recent years, it has produced commemorative coins and proof American Eagle bullion coins. Its “W” mint mark first appeared on the 1986 Statue of Liberty Centennial commemorative gold $5 coin.
Philadelphia (Mint)
The Philadelphia Mint was established with the original coinage and mint act of 1792 and continues to be regarded today as the main U.S. mint. Historically, coins struck at Philadelphia do not have mint marks, but in more recent years, modern circulating coins, commemoratives, and some silver and gold American Eagle bullion coins struck at Philadelphia have included “P” mint marks.
Charlotte (Mint)
The Charlotte, North Carolina, branch mint was established in 1835 to strike gold coins only. The bill establishing the mint was pushed by Southern representatives in Congress who argued that it was cheaper to strike coins closer to the source of gold bullion rather than ship it to Philadelphia. In various years from 1838 to 1861, the Charlotte mint struck gold dollar, $2.50, and $5 coins. A “C” mint mark denotes its production.
Dahlonega (Mint)
The same bill that established the Charlotte branch mint also established a branch mint at Dahlonega, Georgia. Like Charlotte, Dahlonega was authorized to strike gold coins only. In various years from 1838 to 1861, it struck gold dollar, $2.50, $3, and $5 coins. A “D” mint mark denotes its production.
New Orleans (Mint)
The same bill that established the Charlotte and Dahlonega branch mints also established a branch mint at New Orleans. Unlike Charlotte and Dahlonega, however, New Orleans was authorized to strike gold and silver coins. In various years from 1838 to 1861 and again from 1879 to 1909, it struck silver three-cent, half-dime, dime, quarter, halfdollar, and dollar coins, and gold dollar, $2.50, $3, $5, $10, and $20 coins. An “O” mint mark denotes its production.
San Francisco (Mint)
The San Francisco branch mint was authorized in 1852 to again bring coin production closer to bullion sources. Coinage commenced in 1854 but stopped in 1955. It resumed again in 1968, largely to produce proof coins for collector sets, and continues today. Over the years, San Francisco has produced a wide range of base-metal, silver, and gold coins, including gold dollar, $2.50, $3, $5, $10, and $20 coins. An “S” mint mark denotes its production.
Denver (Mint)
An 1862 congressional act established a U.S. assay office in Denver, but full-fledged branch-mint status came later. Coin production began in 1906. Denver continues to produce all denominations of currently circulating coins. In various years in the early 1900s, it produced gold $2.50, $5, $10, and $20 coins. A “D” mint mark denotes its production and is not to be confused with the Dahlonega “D” mint mark of an earlier era.

Gold issues were included in some of the first proposals for a national coinage in the fledgling United States of the late 18th century. Gold coins from England, France, Portugal, and Spain circulated in the country at the end of the Revolutionary War. After the war, the Articles of Confederation granted individual states the right to issue coins, and the result was a wide range of copper and silver issues that saw some circulation, too.

Today’s decimal monetary system in the United States is based largely on a proposal put forth by Thomas Jefferson. His original coinage plan called for the dollar as the basic monetary unit and included several minor coins and a gold $10. A Continental Congress committee generally favored Jefferson’s plan in a report dated May 13, 1785, but substituted a gold $5 coin for the gold $10. Two months later, Congress approved the plan but failed to set a standard weight for the silver dollar or to establish a mint.

A more concerted effort at establishing a national coinage and mint commenced in September 1789, when Alexander Hamilton was named to head the new Treasury Department. He proposed a gold $10, gold dollar, silver dollar, silver dime, copper cent, and copper half cent. On April 2, 1792, Congress passed an act establishing the U.S. Mint and authorized the following denominations: a gold $10, gold $5, gold $2.50, silver dollar, silver half dollar, silver quarter dollar, silver dime (or “disme”), silver half dime, copper cent, and copper half cent. Hamilton suggested naming the gold $10 an “eagle,” apparently for lack of anything better to call it. The gold $5 was to be a “half eagle” and the gold $2.50 a “quarter eagle.”

Coinage began in earnest in 1793 with the striking of half cents and cents at the new mint located on Seventh Street, between Market and Arch streets, in Philadelphia. Silver half dimes, half dollars, and dollars followed in 1794. Gold coinage did not begin until 1795 with the minting of the first $5 and $10 coins. Gold $2.50 coins followed in 1796. The U.S. Mint produced 8,707 half eagles and 5,583 eagles dated 1795. It produced 1,395 quarter eagles dated 1796.

To give all the new U.S. coins credibility and a value reference, their specifications emulated those of foreign coins popularly circulating in the country at the time. The coins were based on a bimetallic system, which means gold and silver equally represented the basic unit of value. In other words, five silver dollars had the same intrinsic value as a gold $5 coin. The system was based on a gold-to-silver value ratio of 15-to-1.

For the next hundred years or so, gold and silver had a troubled marriage in the U.S. monetary system. At various times, the bimetallic system led to class warfare and private profiteering under the guise of public policy. From the beginning, some officials expressed concern about the system. They feared that world market fluctuations in the prices for the two metals would cause the more valuable metal to leave the country. Indeed, that’s what happened in the early 1800s. The silver dollar intrinsically became less valuable than a dollar’s worth of gold. Gold coins either disappeared quickly after minting or never entered circulation. The situation was eased somewhat when gold was discovered in South Carolina in 1824 and Georgia in 1830. Then in 1834, a new law lowered the standard weight of all gold coins and established a gold-to-silver value ratio of 16.002-to-1. Five dollars in silver coins bought a new, lighter gold $5 coin. Speculators hoarded the older, heavier gold coins and hauled them to the melting pot at a profit of 4.7 percent. Follow-up legislation in 1837 established a uniform fineness of 0.900 for gold and silver coins and tweaked the ratio again, to 15.998-to-1.

Gold Coins | The Jefferson Plan (U.S. Mints)

Due to the Jefferson Plan, gold coins
were created in mints across the United States

By the 1850s, the situation reversed. The discovery of gold in California made silver the more valuable metal, and silver coins became scarce in circulation. New gold $1 and $20 coins were authorized in 1849. Four years later, Congress lowered the weights of the half dime, dime, quarter, and half dollar to try to keep silver coins in circulation.

But by the mid-1870s, the situation reversed again when the Comstock Lode near Virginia City, Nevada, dumped new, large supplies of silver on the market. Combined with European demonetization of silver, the bottom fell out of the metal’s price. The Coinage Act of 1873 brought sweeping changes to the U.S. monetary and coinage systems and to the Mint’s governing structure. First, the act established the main mint at Philadelphia and the various branch mints as a bureau of the Treasury Department to be headed by a director appointed by the president. Second, it authorized the minting of the following gold coins: $2.50, $3, $5, $10, and $20. Third, it effectively put the nation on the gold standard, thus ending the bimetallic standard, and discontinued the silver dollar.

Those in favor of the legislation argued that the gold dollar was already the de facto standard for the U.S. monetary system and was consistent with the gold standard of Great Britain and most other European nations. Several years later, however, despite historical evidence to the contrary, silver interests insisted the gold standard and elimination of the silver dollar were secretly slipped into the legislation. Their cause was bolstered when a special congressional commission in 1877 concluded that the demonetization of silver had been effected solely to benefit the creditor classes.

The anti-gold-standard crowd advocated the resumption of large-scale silver-dollar production as a cheaper, more plentiful form of money in response to the era’s economic woes. Their efforts resulted in the passage of what is commonly called today the Bland-Allison Act of 1878, which required the government to purchase $2 million to $4 million of silver monthly and resume the production of silver dollars for circulation. In 1890, the Sherman Silver Purchase Act increased the required monthly purchases of silver to $4.5 million. By 1893, the intrinsic value of a silver dollar dropped to 52 cents. Holders of Treasury notes, redeemable in either silver or gold, choose the higher-valued gold for redemption and drained the Treasury’s reserves of the yellow metal. President Grover Cleveland reported that from July 1, 1890, to July 15, 1893, the Treasury’s gold reserves had decreased more than $132 million while its silver reserves increased more than $147 million. Later in 1893, Congress repealed the Sherman Silver Purchase Act.

In 1900, Congress confirmed the gold standard through legislation and directed the Treasury secretary to “maintain all forms of money in parity with this standard.” The United States continued to strike gold coins into the 1900s, but the economic demands of World War I and then the economic challenges of the 1930s eventually led to the demise of the gold standard and the production of gold coins for circulation. In 1933, President Franklin D. Roosevelt banned the private ownership of gold bullion, and the production of U.S. gold coinage for circulation ceased. This and other actions effectively took the United States off the gold standard. In 1971, President Richard M. Nixon announced the United States would no longer exchange paper currency for gold in international transactions among central banks, which was the final step in the country abandoning the gold standard. In 1975, the United States lifted the restrictions on private ownership of gold bullion.

Since 1986, the United States has produced non-circulating, legal-tender commemorative gold coins in the traditional denominations of $5 and $10. It has also produced American Eagle bullion coins, which have legal-tender face values but are designed as a convenient way for private citizens to own gold bullion.

More in this Section:

  • History of Gold >>
  • Collecting Gold Coins >>
  • History of Gold Coins >>
  • Collecting World Gold Coins >>
  • Collecting U.S. Gold Coins >>
  • << Back to Precious Metals (Gold & Silver)


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