United+States+Mint

Today, it is hard to imagine what life would be like without standardized currency. Prior to the Coinage Act of 1792, which established the United States Mint and developed standardized coinage for the United States, the colonies had a shortage of money. This resulted in the dependence on unreliable paper money and other forms of primitive currency. The Articles of Confederation, which was signed in 1778, gave Congress and each state the power to establish their own coinage, but it was believed that a nationally standardized currency was vital to bringing greater unity to the colonies. Prior to the formation of the Mint, there were several attempts at creating a standard currency and there was debate whether this should be done by a third party or a national institution. I believe that the formation of a government-controlled Mint was instrumental as a strategy for overcoming the currency issues facing the United States of America as it grew. My study will explore the progression of currency in the United States and the impact of the United States Mint.
 * The Standardization of the United States’ Currency and the Creation of United States Mint**

CONTENTS:
 * The Road to the Development of a Standardized United States Currency
 * Colonial Currency
 * Early Attempts in Establishing a Mint
 * Contract Coinage
 * The Coinage Act of 1972
 * The First Philadelphia Mint
 * Operation of the First Philadelphia Mint
 * Issues with the First Philadelphia Mint
 * Expanding the United States Mint
 * Conclusion

**The Road to the Development of a Standardized United States Currency**

**Colonial Currency** Money was always in a short supply during the colonial period. Because England did not provide the colonies with enough coins and currency and would not allow them to mint their own coins, the colonists were forced to look for alternatives. In the early colonial period, the colonies were forced to barter with England, exchanging exports such as animal skins, dried fish, and tobacco in exchange for fabrics, window panes, etc. In 1627, wampum was introduced to New England by Dutch settlers in New York. Wampum, made primarily of quahog shells, was made a legal tender in Massachusetts in 1637 and used, successfully, in trading with the Indians. Wampum lost its value, though, because it was very fragile and by 1661 it was no longer considered a legal tender. Colonists also used foreign coins, such as Spanish, French, Portuguese coins imported from trade with Havana and the West Indies. The most popular was the Spanish milled dollars, which were often divided into eight 'bits'. These coins also had issues, such as not having a regulated value between colonies. They were also often very worn and destroyed.

In an attempt to ease they extreme coin shortage, the Massachusetts Bay Colony established an illegal mint in Boston in 1652. The first coin, the "New England", issued in 1652, had a simple design which led to counterfeiting and "clipping", where the sides were cut and the tops were shaved. This coin only lasted four months. Several other coins were minted, the last and most popular of which was the "Pine Tree Shilling". In 1684, the King ordered that the mint be closed.

The Massachusetts Bay Colony was authorized to use "Bills of Credit" (which were paper bills redeemable for some value in the future) in 1690, in order for the colony to pay British soldiers fighting in King William's War. These bills, originally printed in five, ten, and twenty shilling denominations, were allowed to circulate the colony freely. Soon, all of the New England provinces began printing their own notes. Many of these bills were unsuccessful because of the shortage of gold and silver coins to back them. They were also over-produced, causing a decrease in their value. In 1751, the British Parliament passed a law which forbid the Massachusetts Bay Colony to issue any form of money (History of Colonial Money).

After the Revolutionary War began in 1775, paper money was issued from the Continental Congress in an attempt to finance the war. The first issue was authorized on June 22, 1775, and had no backing, as they were only redeemable if America won its independence. It was declared treason, in January 1776, to refuse or discourage the circulation of the Continental paper currency. Congress issued way too much, however, causing its value to plummet until, by the end of the war, it was worthless (Taxay 3).

**Early Attempts in Establishing a Mint** In February 1781, Robert Morris, a merchant from Philadelphia, was appointed Superintendent of Finance by Congress. Morris had already aided Congress with obtaining loans and helped organize the Bank of Pennsylvania raise funds for the purchase of military supplies in June of 1780. Morris' task, with his new position, was to start a National Bank for the Treasury. Alexander Hamilton presented a plan to Morris to annex a mint to the bank, but he already had a plan to develop it as an independent establishment. Robert Morris and his assistant Gouverneur Morris then devised a coinage plan, in 1782, to develop a unified currency. To do this, they developed a system to convert the different Colonial rates. This system was to select the largest common divisor by which the currencies of several states could be converted without using a fraction. This fraction was determined to be 1/1440 of the Spanish dollar. Morris said that "it was not necessary for the unit to be represented by a coin, so long as its value was precisely known" (Taxay 15).

Morris took his plan to Congress and, on February 21, 1782, they approved the establishment of the Mint. Although Morris was able to create several sample coins for Congress, after nearly a year, nothing resulted from his attempt at a Mint. In June 1783, Thomas Jefferson was elected to Congress, serving as a chairman of a currency committee. Upon learning of Morris' plan, Jefferson devised his own, much simpler, plan and passed them along to Morris. Jefferson argued that Morris' plan was overly complicated and used a currency unfamiliar to the people. He claimed the only justification of Morris' plan was its ability to convert the diverse currency that the different Colonies had used. In his system, a decimal system would be used with the primary unit being the dollar, equal to the Spanish milled dollar. Although it took over a year for Congress to take action, in May of 1785, a "Grand Committee" was formed to decide on a plan. The committee decided on a modified Jefferson plan, and on July 6, 1785 Congress unanimously passed the plan of the Grand Committee, which resolved that the: money unit of the United States be the dollar, the smallest coin be of copper, of which 200 shall pass for one dollar, and that several pieces shall increase the decimal ratio. A Mint bill was developed, assigning positions of the mint, and, on October 16, it was passed by Congress. Just like several other previous attempts to develop a mint, this plan was also forgotten because there was a debate in Congress.

**Contract Coinage** There was a growing opposition in Congress, which delayed the establishment of a mint. "The opponents of the Mint believed that the nation could subsist on the gold and silver coins in circulation, and that it should contract for its copper money" (Taxay 25). There were also members of Congress that believed all coins should be contracted rather than incur the expense of a Mint. From the years of 1787 to 1792, Congress attempted to create the United States currency through contracts with independent coiners. The most popular of these contracts, led by James Jarvis, was the creation of the "Fugio Cent."

On April 20, 1787, Jarvis' proposal was selected, over Matthias Ogden's, calling for the creation of 300 tons of copper coins to be delivered over the next 3 years. The design was almost identical to Benjamin Franklin's 1776 Congress coins, which showed "thirteen circles linked together, a small circle in the middle with the words, [UNITED STATES] round it: and in the center the words "WE ARE ONE" on one side and on the back: the word "fugio," the year 1787, and the words "mind your business" "(Taxay 31). To fill this contract, Jarvis went to the famous Birmingham contract coiner, Matthew Boulton. The contract stated that Jarvis would be paid for the coins when they were delivered, and because of this, he suffered from initial financial problems. Due to these problems, Boulton was hesitant to help Jarvis fill his contract. Having already missed 2 delivery deadlines (totaling 50 tons of copper coins), Jarvis delivered 8,968 pounds of Fugio cents to congress on May 21. By this time, the rate on copper had significantly decreased, meaning it would be very difficult to circulate the coins as cents, as they were originally determined. Jarvis, still trying to enlist Boulton's aid as of June 20, returned to Congress on August 21 to find that his contract was being ended. On September 21, Congress voided the contract, ending any hope for the Fugio cent.

Although another attempt at contracting coinage was on the table, in which John Hinkley Mitchell would also use Matthew Boulton's skill to establish a coinage, Congress turned, once again, to Thomas Jefferson to prepare a report on establishing a mint. A draft of the report was delivered to the Secretary of Treasury, Alexander Hamilton, on June 12, 1790. Hamilton did not submit his report until January, the following year. This report, mainly based on the one already submitted by Jefferson and the Grand Committee, explained the denominations of the proposed currency and the positions at the mint. The report also discussed a plan to remove foreign currency from circulation: "Hamilton was in favor of abolishing foreign coins from circulation as soon as they could be adequately replaced. Although this might be done after a year, he was willing to grant an additional one or two years to the circulation of Portuguese, English and French gold coins, and the silver coins of Spain. Even after this time, the Spanish dollars might continue to pass at the value of their fine silver" (Taxay 50). **The Coinage Act of 1792** On April 2, 1792, Congress passed "An Act establishing a Mint and regulating the Coins of the United States" (Coinage Act 1). The Act stated that a mint was to be created and controlled by the government of the United States. It also outlined the officers, which were, primarily, a Director, an Assayer, a Chief Coiner, an Engraver, and a Treasurer. Furthermore, the Act outlined the denominations of currency: "Eagles" would be worth ten dollars, "Half Eagles" - five dollars, "Quarter Eagles" - two and a half dollars, "Dollars" - which were equal, in value, to the Spanish milled dollar at the time, "Half Dollars" - half the value of a dollar, "Quarter Dollars" - one quarter of a dollar, "Dismes" - one tenth of a dollar, "Half Dismes" - one twentieth of a dollar, "Cents" - one hundredth of a dollar, and finally "Half Cents" - which were to be worth half of a cent. Because Philadelphia was the seat of the Government at the time, it was chosen to be the location of the first Mint. (Coinage Act) **The First Philadelphia Mint**

David Rittenhouse was appointed to be the first Director of the Mint by President Washington, and on July 18, 1792, he purchased the lots on Seventh Street and 631 Filbert Street in Philadelphia to build the first Philadelphia Mint. "Ye Olde Mint," the name given to the first mint, consisted of three buildings: a smelt house (location of the smelting furnace - where the metals for coins were produced from ore), the main building (containing the gold and silver vaults, deposit and weighing rooms, offices, and the assay laboratory where metals were tested), and the mill house (where a horse-driven rolling mill was located). The smelting furnace was installed on September 7, 1792, and operation began shortly after. The first coin to be created was the half dime, in July 1792, but only 1500 were minted and were never meant to be circulated. The first coins released to the public were the copper half cent and cent, in 1793. The first silver coins were not released until the following year and gold coins were released in 1795.

**Operation of the First Philadelphia Mint** The First Philadelphia Mint was very small, and had very primitive machinery. First, the rolling mill, powered by horses in the basement, was used to flatten metal sheet strips. The strips were rolled several times, while spending time in the annealing oven, to ensure that the thickness was precise and the metal was not brittle. These strips were cut to a smaller size and brought to a screw press where circular planchets were cut. A planchet is a round metal disk prior to stamping it into a coin. In early operation of the mint, by 1795, 15,000 to 18,000 planchets could be created in a day. After the planchets were measured and weighed, they were annealed once more then stamped. The stamping was done in a large screw press, where an upper and lower die would be pressed together to form the pattern (US Mint History).

**Issues with the First Philadelphia Mint** The First Philadelphia Mint encountered many problems, according to Don Taxay: "...progress was very slow. Sometimes the new machines were unable to produce enough force, and at other times they collapsed and had to be rebuilt. Even the materials needed for construction were difficult to obtain... and finally, when sufficient machinery was built, the Mint was found to be too small to conveniently house it all!" (Taxay 119). The Chief Coiner, Henry Voigt, complained that the vault was too small and damp, and chose to used individual chests for storing different planchets. The early machinery of the Mint was also the source of many problems, especially the rolling mills. The rolling mills used were not dependable and would often break down or provide an inconsistent thickness (Taxay 120). Dies breaking in the screw press were also an issue in the early years of the Mint. Prior to 1795, "The breakage seems to have been largely caused by a "very ingenious and complicated" press which applied more pressure than the rather poor grade steel could bear" (Taxay 121). A new coining press was received in January 1795, which greatly aided in this problem. Also, in 1816, the mill and smelt houses of the Mint caught fire and the mill was completely destroyed. It was replaced however, by a much better equipped building, replacing the horse-driven mill with a steam powered one.

The shortage of materials was also an issue during the era of the First Philadelphia Mint. In October 1795, the shortage of copper was a serious problem, where "the only copper in the Mint consisted of clippings which apparently had been over-wrought, and were unfit for rolling into strips" (Taxay 121). The copper was required not only for the cents and half cents, but also to alloy the gold and silver coins. In the 1820's, a shortage of silver hit the Mint causing serious problems. Very few, if any at all, silver coins were produced per year between the years of 1812 and 1819. During the first 3 decades of the mint, "the total number of quarters, dimes and half dimes ... was less than one coin for every living person" (Taxay 126).

**Expanding the United States Mint**

In order to meet the demand of the growing nation, the United States Mint had to expand. While the First Philadelphia Mint provided the nation with its first standardized currency, it was small and had a very low output of actual coinage. Because of this, among other reasons, the Philadelphia Mint moved to a new, larger, location in 1833. In the life of the Second Philadelphia Mint, the nation grew from 13 million to 76 million people, greatly increasing the demand for coinage. To accommodate this growth, the Second Philadelphia Mint retired in 1901, and was replaced by a newer, much larger, building. The Third Philadelphia Mint, which took up an entire city block, was able to produce 501,000,000 coins in one year (Third Philadelphia Mint). The forth, and current, Philadelphia mint opened in 1969, just two blocks from where the original "Ye Olde Mint" was located (US Philadelphia Mint).

**Conclusion**

In conclusion, the creation and growth of the United States Mint was instrumental to providing the nation with a standardized currency. Although there were attempts at creating a currency through contracts, they proved unsuccessful in providing the growing nation with the reliable, abundant, and controlled currency that it required. This report followed the advancement of currency, from the primitive forms used in the early colonies to the standardized currency distributed by the United States Mint **Bibliography**

“The Coinage Act of 1792”. United States. 20 January 2009 

Doty, Richard. __America's Money, America's Story__. Sydney, OH: Amos Press, Inc., 1998. Evans, George G. __Illustrated History of the United States Mint__. Princeton, New Jersey: G.G. Evans, 1898.

Stewart, Frank H. __History of the First United States Mint__. Quarterman Publications, 1924.

Taxay, Don. __The U.S. Mint and Coinage__. New York, NY: Arco Publishing Company, 1966. “The United States Mint”. U.S. Department of the Treasury. 20 January 2009. 

References:

“Coinage Act of 1792”. Wikipedia. 20 January 2009 

“History of Colonial Money”. Federal Reserve Bank of Boston. 5 March 2009 

“United States Mint”. Wikipedia. 20 January 2009 

"US Coin History". US Coin Values Advisor. 16 February 2009 < http://www.us-coin-values-advisor.com/the-first-US-mint.html>

"US Mint". Workshop of the World. 5 March 2009 < http://www.workshopoftheworld.com/center_city/mint.html>

"US Mint History". US Coin Values Advisor. 5 March 2009 < http://www.us-coin-values-advisor.com/a-rising-spirit-of-nationalism.html>

"US Philadelphia Mint". US Coin Values Advisor. 16 February 2009 

“Money in Colonial Times”. Federal Reserve Bank of America. 20 January 2009 