Читать книгу A Guide Book of United States Coins 2021 - R.S. Yeoman - Страница 12

Cents and half cents, exclusively, were coined during the year 1793, and by 1799 approximately $50,000 in these coins had been placed into circulation. This amount proved insufficient for the requirements of commerce, and small-denomination coins of the states and of foreign countries continued in use well into the 19th century.

One of the most serious problems confronting commercial interests prior to 1857 was the failure of the government to provide a sufficient volume of circulating coins. The fault, contrary to popular opinion at the time, did not lie with any lack of effort on the part of the Mint. Other circumstances tended to interfere with the expected steady flow of new coinage into the channels of trade.

Free circulation of United States gold and silver coins was greatly hindered by speculators. For example, worn Spanish dollars of reduced weight and value were easily exchanged for U.S. silver dollars, which meant the export of most of the new dollars as fast as they were minted, and a complete loss to American trade channels.

Gold coins failed to circulate for similar reasons. The ratio of 15 to 1 between gold and silver was close to the world ratio when Alexander Hamilton recommended it in 1791, but by 1799 the ratio in European commercial centers had reached 15-3/4 to 1. At this rate, the undervalued gold coins tended to flow out of the country, or were melted for bullion. After 1800, therefore, United States gold coins were rarely seen in general circulation. As no remedy could be found, coinage of the gold eagle and the silver dollar was suspended by President Jefferson in 1804. It is generally held that the silver dollar was discontinued in 1804, although the last coins minted for the period were dated 1803.

With the lack of gold coins and silver dollars, the half dollar became America’s desirable coin for large transactions and bank reserves. Until 1834, in fact, half dollars circulated very little as they were mainly transferred from bank to bank. This accounts for the relatively good supply of higher-condition half dollars of this period that is still available to collectors. A Senate committee of 1830 reported that United States silver coins were considered so much bullion and were accordingly “lost to the community as coins.”

There was only a negligible coinage of quarters, dimes, and half dimes from 1794 to 1834. It has been estimated that there was less than one piece for each person in the country in the year 1830. This period has been described as one of chaotic currency made up of bank notes, underweight foreign gold coins, foreign silver coins of many varieties, and domestic fractional silver coins. Paper money of that time was equally bothersome. Privately issued bank notes sometimes had little or no backing and were apt to be worthless at the time of redemption. In this period, before national paper money commenced in 1861, notes of the state-chartered banks flooded the country and were much more common than silver coins.

On June 28, 1834, a law was passed reducing the weight and fineness of gold coins, which had the effect of placing American money on a new gold standard. Trade and finance greatly benefited from this act, which also proved a boon to the gold mines of Georgia and North Carolina. Branch mints in Dahlonega, Georgia; New Orleans; and Charlotte, North Carolina, began operations in 1838 to handle the newly mined gold near the source. The various issues of private gold coins were struck in these areas.

The law of January 18, 1837, completely revised and standardized the Mint and coinage laws. Legal standards, Mint charges, legal tender, Mint procedure, tolerance in coin weights, accounting methods, a bullion fund, standardization of gold and silver coins to 900 thousandths fineness, and other desirable regulations were covered by the new legislation. Results of importance to the collector were the changes in type for the various coin denominations and the resumption of coinage of the eagle in 1838 and larger quantities of silver dollars in 1840.

Prior to Andrew Jackson’s election as president in 1828, the Second Bank of the United States had considerable control over the nation’s currency. In 1832 Jackson vetoed a bill rechartering the bank and transferred government deposits to state banks. The action took away some stability from the economy and eventually led to a national financial collapse. By 1837 the country was so deprived of circulating coinage that merchants resorted to making their own “hard times tokens” to facilitate trade. The few available government coins were hoarded or traded at a premium for private paper money, which was often unreliable.

The California gold discovery in 1848 was responsible for an interesting series of private, state, and territorial gold issues in the western region, culminating in the establishment of a branch mint at San Francisco in 1854.

Two new regular gold issues were authorized in 1849. In that year the gold dollar joined the American family of coins, followed in 1850 by the double eagle. The California gold fields greatly influenced the world gold market, making the exportation of silver profitable. For example, the silver in two half dollars was worth $1.03-1/2 in gold. The newly introduced gold dollars soon took over the burden and hastened the disappearance of silver coins from trade channels. This was the situation when the new 3¢ postage rate brought about the bill authorized by Congress on March 3, 1851, calling for the coinage of a silver three-cent piece in 1851. This was the United States’ first subsidiary coin in precious metals, for its silver value was intrinsically 86% of its face value, as an expedient designed to prevent its withdrawal from circulation.

The California Gold Rush had a great influence on American coinage.

The $3 gold piece was authorized by the Act of February 21, 1853. It was never a popular or necessary coin because of the existing $2.50 and $5 coins; it nevertheless was issued regularly from 1854 until 1889.

On February 21, 1853, fractional silver coins were made subsidiary by reduction of their weights. As the coins’ face value now exceeded their bullion value, free coinage of silver was prohibited except for dollars, and the Mint was authorized to purchase its silver requirements on its own account using the bullion fund of the Mint, and, according to law, “the profit of said coinage shall be . . . transferred to the account of the treasury of the United States.”

To identify the new lightweight pieces, arrows were placed at the date on all silver coins except three-cent pieces, for which arrows were added to the reverse. Dollars, which were not reduced in weight, were not marked in any way. On the quarters and half dollars of 1853, rays were added on the reverse to denote the change of weight. In 1854, the rays were removed, and in 1856, the arrows disappeared from all but the silver three-cent coins. Large-scale production of silver coins during this period greatly relieved the demands on gold dollars and three-cent pieces, and for the first time in U.S. history, enough fractional coins were in general circulation to facilitate commerce.

The Coinage Act of February 21, 1857, was designed primarily to reform the copper coinage. Although large cents and half cents are interesting and valuable in the eyes of the modern collector, they were unpopular with the American public in the 1850s because of their size. They also cost the Mint too much to produce.

The new law abolished the half cent, and reduced the size and changed the design of the cent. The new Flying Eagle cent contained 88% copper and 12% nickel. Nearly 1,000 pattern cents were stamped from dies bearing the date 1856, although no authority for the issue existed before 1857. Other important effects of the law were the retirement of Spanish silver coins from circulation, and dispersal of the new cents in such excessive quantities as to create a nuisance to business houses, particularly in the eastern cities. The Indian Head design replaced the Flying Eagle in 1859, and in 1864 the weight of the cent was further reduced and its composition changed to a proportion of 95% copper and 5% tin and zinc. (This bronze composition was the standard for the cent except for the years 1943 and 1944–1946. In 1962 the alloy was changed to 95% copper and 5% zinc. In 1982 the composition was changed to a core of 99.2% zinc and 0.8% copper, covered with an outer layer of pure copper.)

An abundance of coins turned to scarcity following the outbreak of the Civil War. Anticipation of a scarcity of hard money, and uncertainty as to the outcome of the war, induced hoarding. The large volume of greenbacks in circulation caused a premium for gold. Subsidiary silver coins, as a result of the sudden depreciation, quickly vanished from circulation. As an expediency, some people made use of postage stamps for small change. Merchants, banks, individuals, and even some towns and cities produced a wide array of small-denomination paper scrip and promissory notes to meet their needs. In 1862 the government released its first issue of “Postage Currency” and subsequent fractional notes. In 1863 many privately issued copper tokens appeared to help fill the void. They are of two general classes: tradesmen’s tokens and imitations of official cents. Many of the latter were political or patriotic in character and carried slogans typical of the times. They not only served as a medium of exchange, but also often advertised merchants or products, and were usually produced at a profit.

The Civil War brought dramatic changes to our nation’s coins.

The Coinage Act of April 22, 1864, which effected changes in the cent, provided also for the new bronze two-cent piece. The act, moreover, provided legal tender status for these two coins up to 10 times their face value. The two-cent piece was the first coin to bear the motto IN GOD WE TRUST. The new coin at first was readily accepted by the public, but it proved an unnecessary denomination because of the competing three-cent coins, and production was halted after only nine years. The secretary of the Treasury had issued a great many currency notes of the three-cent denomination early in 1865. American nickel interests seized upon this circumstance to fight for a new three-cent coin for redemption of the paper money. A law was quickly passed and signed by President Abraham Lincoln on March 3, 1865, providing for a three-cent coin of 75%-25% copper-nickel composition. The United States then possessed two types of three-cent pieces, although neither was seriously needed. The nickel three-cent piece was struck continuously until 1889, the silver three-cent piece until 1873.

The new copper-nickel alloy ratio was selected for the five-cent coin, adopted May 16, 1866, and thereafter known as a nickel. Again, the people had a coin denomination available to them in two forms. The silver half dime, like the three-cent piece, was retired from service in 1873 to curb the use of silver.

The great influx of silver from the Comstock Lode in Nevada, mainly in the 1860s and ’70s, increased the nation’s supply of silver for coins and taxed the Philadelphia Mint’s capacity for production. Pressure from silver-mine interests in Nevada influenced the opening of a special mint in Carson City to assay and mint silver locally, rather than having it shipped to Philadelphia or San Francisco. Production was inefficient, costly, and slow. By 1893 the lode was virtually depleted, and minting activities at Carson City ceased.

The Law of March 3, 1871, was a redemption measure and was passed to provide the United States Treasury with means for the disposal of millions of minor coins, which had accumulated in the hands of postmasters, merchants, and others. Small-denomination coins, because of this new law, were placed on an equal footing with silver and could be redeemed when presented in lots of $20.

There was a general revision of the coinage laws in 1873. Several years of study and debate preceded the final enactment. The legislative history of the bill occupies hundreds of pages of the Congressional Globe, and the result was considered by many a clumsy attempt and a failure. The law has sometimes been referred to as the “Crime of ’73.” One consequence of the bill, which achieved final enactment on February 12, 1873, was the elimination of the silver dollar. In its stead, the trade dollar of greater weight was provided for use in commerce with the Orient in competition with the Mexican dollar. The legal tender provision, which gave the trade dollar currency within U.S. borders, was repealed in 1876 to avoid profiteers’ buying them at a reduced rate. The trade dollar was thus the only United States coin ever demonetized. (Through an oversight, the legal tender status was reinstated under the Coinage Act of 1965.)

It may be a surprise to some collectors to learn that silver dollars did not circulate to any great extent after 1803 (except in the 1840s). The coin was turned out steadily since 1840, but for various reasons (such as exportation, melting, and holding in bank vaults), the dollar was virtually an unknown coin. The Act of February 21, 1853, in effect demonetized silver and committed the country to gold as a single standard. The silver-mining interests came to realize what had occurred in the 1870s, and the ensuing quarter century of political and monetary history was filled with their voluble protests. There was a constant bitter struggle for the return to bimetallism.

From an economic point of view, the abundant supply of gold was responsible for a steady decline in gold prices worldwide. This brought about a gradual business depression in the United States, particularly in the South and Midwest. Private silver interests influenced great sections of the West for bimetallism as a remedy for the failing price level. Worldwide adoption of bimetallism might have improved economic conditions; but, had the United States alone proceeded to place its money on a double standard at the old 16-to-1 ratio, the situation would only have worsened.

Of particular importance to collectors were those features of the Law of 1873 that affected the statuses and physical properties of the individual coins. The weights of the half dollar, quarter, and dime were slightly changed, and arrows were placed at the date for the ensuing two years to indicate the differences in weight. Silver three-cent pieces, half dimes, and two-cent pieces were abolished by the act, and the manufacture of minor coins was restricted to the Philadelphia Mint.

The short-lived twenty-cent piece was authorized March 3, 1875. It was created for the Western states, where the Spanish “bit” had become equivalent to a U.S. dime. The five-cent piece did not circulate there, so when a quarter was offered for a “bit” purchase, only a dime was returned in change. The so-called double dime was frequently confused with the quarter dollar and was issued for circulation only in 1875 and 1876.

On February 28, 1878, Congress passed the Bland-Allison Act, which restored coinage of silver dollars. It required the Treasury to purchase at market price two to four million dollars’ worth of silver each month and to coin it into silver dollars at a ratio to gold of 16 to 1. Proponents of “free silver” contended that with more money in circulation, workers would receive higher wages. Business leaders argued for the gold standard and against free silver because they believed that inflation would cheapen the value of money. The act was called by some “a wretched compromise.”

The North and East so avoided the silver dollars that the coins did not actively circulate there and eventually found their way back to the Treasury, mostly through tax payments. Treasury Secretary Daniel Manning transferred ownership to the people and the coins were specifically earmarked as backing for Silver Certificates.

The Bland-Allison Act was repealed in 1890 and the Sherman Silver Purchase Act took its place. Under this new law, 4,500,000 ounces of silver per month could be paid for with Treasury Notes that were to be legal tender, and redeemable in gold or silver dollars coined from the bullion purchased. Important in this case was the fact that the notes were constantly being redeemed for gold that mainly was exported. The measure was actually a government subsidy for a few influential silver miners, and as such it was marked for failure. It was hastily repealed. The Bland-Allison Act and the Sherman Act added a total of 570 million silver dollars to the nation’s monetary stocks.

The Gold Standard Act of 1900 again gave the country a single standard, but reaffirmed the fiction that the silver dollar was a standard coin. It still enjoyed unlimited legal-tender status, but was as much a subsidiary coin, practically speaking, as the dime, for its value in terms of standard gold, even before the gold-surrender executive order several decades later, was far below its face value.

The silver dollar struck from 1878 to 1921 is named for its designer, U.S. Mint engraver George T. Morgan.

The lapse in silver dollar coinage after 1904 and until 1921 was due to lack of silver. Legislation authorizing further metal supplies for silver dollars was not forthcoming until 1918, when the Pittman Act provided silver for more dollars.

Prior to March 1933, the metallic worth of U.S. gold coins was equal to their face value. In order to encourage a steady flow of gold to the mints, the government (with the exception of the period 1853–1873) had adopted a policy of gratuitous coinage. The cost of converting gold into coin had generally been considered an expense chargeable to the government.

In practice, the Mint made fine bars for commercial use, or mint bars for coinage, at its discretion. The bars in later years were stored in vaults and Gold or Silver Certificates issued in place of the coins.

On April 5, 1933, President Franklin Roosevelt issued an order prohibiting banks from paying out gold and Gold Certificates without permission, and gold coins were thus kept for reserve purposes. The law was intended to stabilize the value of gold. In effect, it removed all gold from circulation and prevented it from being hoarded. Gold imports and newly mined domestic gold could be sold only to the government. Today, gold bullion and coins may be collected and saved by anyone, as all restrictions were removed on December 31, 1974.

Under the Coinage Act of 1965, the compositions of dimes, quarters, and half dollars were changed to eliminate or reduce the silver content of these coins because the value of silver had risen above their face values. The replacement “clad” dimes and quarters were composed of an outer layer of copper-nickel (75%-25%) bonded to an inner core of pure copper. Beginning in 1971 the half dollar and dollar compositions were changed to that of the dime and quarter. All silver clad coins have an outer layer of 80% silver bonded to an inner core of 21% silver, for a total content of 40% silver.

By the Law of September 26, 1890, changes in designs of United States coins cannot be made more often than once every 25 years without congressional approval. Since that date, there have been design changes in all denominations, and there have been many gold and silver bullion and commemorative issues. In 1999, programs were started to honor each of the individual states and territories, and various national parks, by using special designs on the reverse of the quarter. The one-cent, five-cent, and dollar coins have also undergone several design changes. These factors, and a growing awareness of the value and historical importance of older coins, are largely responsible for the ever-increasing interest in coin collecting in the United States.