The Evolution of U.S. Coins|
November 22, 2011
Excerpted from Warman’s Companion to U.S. Coins and Currency, 2nd Edition, by Arlyn G. Sieber, available from www.ShopNumisMaster.com.
An average American living in the 13 Colonies during the 18th century would not have found many English silver or gold coins in his pocket. It was British policy to restrict the export of precious metals to the Colonies. As a result, nothing but copper was struck for the Colonies, and even that was rarely minted. Colonial Americans used any foreign silver or gold coin that could be pressed into service. Some of the Colonial governors also issued paper money valued in terms of discounted British currency, or in Spanish milled dollars. After the Declaration of Independence, many of the same forms of currency continued.
Under the Articles of Confederation, some states issued official state-sanctioned coinage. When the Constitution took effect in 1789, it put an end to all state-issued coinage. With the personal influence of George Washington himself behind them, the proponents of the new United States Mint persevered, and construction began in 1792.
For both administrative and technical reasons, the Mint got off to a slow start, but before the end of the year, silver five-cent pieces struck from the first president’s tableware were circulating around Philadelphia. The new coinage was based on a decimal system dividing a dollar into 100 cents. The idea of the dollar as the standard unit was inspired by the Spanish piece of eight, then common in the Colonies.
Suffering under a severe shortage of both bullion and labor, as well as annual epidemics of yellow fever, the early Mint never succeeded in placing substantial coinage in circulation on a national level. Broad circulation was also prevented by the rapid withdrawal and melting of much of the gold and silver coinage by speculators, because American coins had too high a precious metal content relative to their value. The endeavor became so futile that the striking of many denominations was frequently suspended. It wasn’t until the 1830s that the weights of the coins were adjusted to prevent their export.
During the Mint’s first four decades, every die was engraved by hand, so no two looked alike. Finally, in 1836, the Industrial Revolution came to the U.S. Mint. Steam-powered striking equipment was imported from England. Almost overnight, American coins became more neat and uniform. The old lettered edges were replaced by modern reeding, the hundreds of parallel lines found on coins today. Also, the quantities that could be produced in the same amount of time increased drastically. This technological improvement roughly coincided with the needed reduction in the coins’ bullion content and with a facelift for all silver denominations.
But the big event of the mid-century was the coinage law of 1857. This act eliminated the half-cent, reduced the size of the one-cent piece from bigger than a quarter to the diameter used today and, most importantly, caused foreign silver and gold to cease to be legal tender in the United States. The Mint was finally able to produce enough to provide a true national coinage.
Civil War coin shortages not only resulted in many private tokens, but also inspired the 2-cent and nickel 3-cent pieces. During the late 1860s and 1870s the nation was in the economic doldrums. Mintages were low for many denominations, particularly the silver dollar. From the late 1870s onward, coinage was plentiful for half a century—¬sometimes too plentiful. From 1873 to 1918, and later, several laws were passed to force the government to strike an abundance of silver dollars.
Early in the 20th century, Theodore Roosevelt championed the artistic merits of the nation’s coinage. The beautiful designs included the Mercury dime, the Walking Liberty half, and the St. Gaudens double eagle, as well as the less classically inspired Buffalo nickel. A commemorative coin program was also getting underway, providing an outlet for artists of various tastes. Most never saw circulation. Idealistic images of Liberty were gradually replaced during the 1930s and 1940s with those of statesmen, and artists were determined by contests rather than by selection.
The need for strategic metals for armaments during World War II was the cause for interesting, if not pleasant, aberrations in the cent and nickel’s composition. An increase in the price of silver in 1964 prompted massive hoarding, and as a result, silver was removed from coinage in favor of clad coinage. Almost 30 years later, the cent was also debased.
Today, the nation’s coinage is characterized by a new flood of commemoratives. Traditionally sold at a high premium by the Mint, commemoratives circulated at face value in 1999 for the first time since the Bicentennial. The state quarter series was well received by the public and has been credited with creating significant growth in the popularity of coin collecting in the U.S.
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