Featured How the first U.S. mint placed the face value on its coins.

There is a current thread called “Coins Without Denominations” currently close to the top of the list here. I thought that it might be interesting to note how the first U.S. mint noted the face value on its coins.

Interestingly the half cents and large cents had the value in two places on the reverse. The half cents had the words “HALF CENT” in large letters on the reverse and the fraction “1/200” under the wreath. The large cents had “ONE CENT” and the fraction “1/100.” This was the way the value was shown until John Reich changed it starting in 1808.

1795 Lettered Edge Half Cent. This coin also had its value expressed on the edge.



1797 Large Cent



The early half dimes and dimes did not have any markings at all that defined their face value.



The 1796 Quarter, which was the first quarter-dollar had no markings as to its value.




The Draped Bust, Heraldic Eagle quarter had "25 C." on the reverse. Could it have been that some people were confused and had trouble separating the quarter from the half dollar?



To be continued ...

 

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The early half dollars had their value in the edge. In 1796 - 7 there was a courious little "1/2" on the reverse, but that feature disappeared when the the reverse was changed to the Heraldic Eagle. The 1796-7 half dollar is a very tough coin to find in any grade.



The early silver dollars did not have marking as the value on the face of the coin. There were the words, "ONE HUNDRED CENTS, ONE DOLLAR OR UNIT" around the edge.



None of the gold coins had any markings on them as to their value. Size and weight were the only indicators.



Finally starting in 1807, John Reich added a "5 D." to the reverse of his design.



In 1808, he added "2 1/2 D." the reverse of the quarter eagle.



The U.S. was not alone with this approach. Foreign coins also lacked markings which gave them value.

 

Interesting, I would assume that as the US entered more and more into international trade and there were more and more immigrants, the value had to be stated for those not familiar with the coins.

 

The number of immigrants may have changed the policy, but for the most part, U.S. gold and silver coins were traded based on their melt value, not the face value. That is the reason why the early mint was so fussy about getting weight right in the coins. Most of light planchets were melted; the heavy ones had the excess metal filed from their surfaces.

 

Good point about being traded based on weight. I'm not sure what the buying power of the different denominations were at that time, but I would assume that people didn't pay for groceries purchases with gold.

 

Through most of history, gold was usually reserved for wealthy people, successful merchants and royalty. My mother talked about getting a $2.50 piece for Christmas. My father got $75 in gold from his high school graduation. He deposited it all in a bank that went belly up during the Great Depression.

Most people didn't run around with gold in their pockets during most all of the 19th century. Most of time it was coins and paper money, first from the banks, and after the Civil War, from the Federal Government. How do we know this? It's unsual to see a U.S. gold coin that grades less than Choice VF.

Perhaps the only gold coin that saw a lot of circulation was the gold dollar. They were popular from 1849, when they were introduced until the Civil War when all the gold was hoarded or exported. The reason was that they were reliable. With paper money form bank, you never knew if it was any good or not. When it was a gold coin, it spoke for itself.

 

That 1795 half cent is phenomenal, I love that choice chalky brown patina.

Thank you for sharing.

 

I’m learning a lot! Thanks for the info.

 

Concerning the use of gold in commerce. If you were buying a house and either putting a down payment or paying for it in full, I could see weighing the gold proffered. However, buying a horse or some such might be paid in gold, and I would think the face value of the coin would be respected. I can stand to be corrected though.

 

From what I understand, if you tried to use a gold piece to pay for something, and it was underweight, it was perfectly legal from the payee to reject at its full face value.

 

I don't know where people here are getting their histories from. We all read a lot of it. But we also know that assertions get repeated from author to author without being validated or verified. Moreover, numismatics provides the tangible evidence of economics which is a human action; and people are more complicated than mere physical objects, so theories of human action seldom explain or predict everything. Just for two examples of what I mean:
(1) According to anthropoligist David Graeber, there has never been recorded a culture that went from barter to cash. Rather, barter is what cash economies devolve to when money fails. For most of human history, exchange was mutual gift-giving for social status. Even today, across the counter, both parties say "Thank you."
(2) Psychologists from the University of British Columbia published a paper "The weirdest people in the world?" (Henrich, Heine, Norenzayan; Behavioral and Brain Sciences, 2010;33) that compared and contrasted standard economic games played by university undergraduates around the world with results from playing these games (Ultimatum; Dictator) with non-industrialized peoples. Individuals who have no contact with market economies often cannot conceptualize that a smaller coin can be worth more than a larger one. We take it as "natural" what it took us centuries of cultural inheritance to accept as "normal."

It is true that coins have shown their value. The Roman ealy republican bronzes on the uncial standard have two pellets to show six uncia: 2 x 6=12. The first Roman denarii carried an X to show their new weight standard. The X was soon dropped once it became commonly understood. Generally, however, in most times and places coinage in precious metals (and bronze) carried no statement of "value" because the coin was the value.

The idea of "money of account" was invented in by bankers of the Middle Ages. Dealing in a plethora of local coinages of various and varying weights and finenesses, they invented Pounds-Shillings-Pence. Pay up in any kinds of money you want--Hall hellers, English pennies, Florentine grossi, even bars of silver weighed in German "marks"-- but you owed so many "pounds-shillings-pence." (“Champagne: The Athens of the Middle Ages,” The Celator, Vol. 25. No. 11, November 2009.)

Kings did not agree.

The Austrian economists of our time - von Mises, Rothbard, Hayek, and others - pointed out that when coins could be revalued by changing their names, they were devalued by central authorities whose wars were bankrupting their nations.

When Sir Isaac Newton worked with Sir Christopher Wren among others to rescue England's coinage from complete collapse - barter becoming common again - the law defined the silver pound sterling by count (by tale). Regardless of how worn a shilling or penny was, it was by law a shilling or a penny. Gold coins traded by weight. ("Sir Isaac Newton: Master & Warden of the Mint," The Numismatist, November 2001.)

Again, on the fact that value was important and not everyone knew every coin, coins did have 1/3 or 1/4 or 8R on them. But that was a convenience as much for the authority who used the coinage as a primary consumer.

Actually, the gold dollar was not a popular coin. Its best use was as jewelry for women. The gold coin we find worn to VF or below is the $5 half eagle. For much of US Mint history, their effort was devoted to production of the $5 and the 50-cent silver coin. For much of the early 19th century, 50 cents silver was a day's wages. After the Civil War, inflation pushed to "an honest day's work for an honest dollar." A cowboy would get $20 per month because he had the bunkhouse and chuckwagon. That was why the US did not mint silver dollars after 1803. Banks often held their reserves in bags of half dollars.

Until 1857 when the law changed, people from Massachusetts to Illinois were used to banknotes promising "dollars" and paying in "reales." See "Spanish Coins on American Banknotes" here: https://scoan.oldnote.org. Just to say that we project ourselves on the past. We think that base-10 is "natural" but German coins in the mid-19th century were denominated in 12ths of a thaler with one-third and one-fourth thaler coins. In fact, Fred Flintstone did not count past 3. The numbers 4, 5, 6.... were invented only about 4000 BCE and their names came from "one more than three" and so on. Every Indo-European language borrowed the word for "seven" from their Semitic neighbors.

Merchants along the East Coast kept their books in pounds-shillings-pence into the 1830s. Also into the 1830s, counterfeit colonial copper circulated well in Appalachia. (Both of those claims from papers delivered to the ANS "Coinage of the Americas" conferences.)

Ahh... well... that gets into the interminable discussion of what is meant by "legal tender." Cash on the barrelhead is one thing. Paying a debt is something else. You can insist on selling your horse for beans and inspect and weigh each one if you want just as the buyer can count its teeth. But if the contract said that you sold the horse for $10 due on the 1st of next month and the buyer handed you a (Choice VF) US of A Ten Dollar Gold Eagle, there it was, paid in full.

It is kind of funny (ha ha) but I had book of clean jokes you could tell at a business dinner in 1900. Many aspects of business were different then than we imagine it to have been.

 

In truth, we can thank Robert Morris. Founding father, signer of the Declaration, member of the Constitutional Convention, first Treasurer (Financial Agent), first appointed Mint Director (his ideas and plans as presented to Congress lead to our mint), first to establish a national bank, and the idea of a decimal value for United States coinage. And much, much more. Sometimes it pays to be a history nut.

 

A great many Type III gold dollars were used for jewelry. Over the last decade of their run, that was the primary use for them, along with numismatic hoarding because of the low mintages.

The Type I, Type II and early date date Type III coins were different. The mintages, which reached four million per year were quite high, especially for a U.S. gold coin. That does more than suggest that these coins had a place in the economy other than sitting in banks and getting moved from one merchant's account to another.

The mint also made a concerned effort to melt them, which has limited the number of pieces we see today. Many of them were converted into Type III gold dollars and other gold coins.

The state chartered banks prior to the Civil War were a mess. There was very little regulation, and they were able to issue about as much paper money as they pleased. I have read that most of them lasted four years or less. While they existed, their paper money was often discounted. When they closed, it was worthless. Some banks never opened and issued paper money until the public caught wise and would not accept it.

It took "a scorecard" like Niles Bank Note Reporter to know want it was worth. Even that had its flaws because Niles was tied to the banking industry. I'll stick by my assersion that the gold dollar did have a brief period of popularity.

 

Thanks for the clarification on the dollar. I do not know much about it. I just checked the Red Book (Mega 3rd 2017) for mintages and relative pricing but still do not know much about their history. Why did the Mint make a concerted effort to melt them for new coining, if the weight and fineness did not change? I'm sure there's a story there, but I have been de-acquistioning my library and no longer have Breen, Taxay, or The Garrett.

 

@johnmilton

Thanks for another informative article, John!

 

In the 1870s, the mint director cited "the evil of having two sizes of gold dollars circulating at the same time." He made an effort to melt as many Type I gold dollars as he could. The most obvious consequence of the policy was the spike in mintages for the 1873 and 1874 gold dollars. After that the mintages declined sharply.

In the 1880s the mint actually made an effort to push the mintages higher to discourage numismatic speculation. Jewelers did demand their coins for their use, but speculators set them aside because of the low mintages.

For example the mintage for the 1880 gold dollar was 1,600 plus 36 Proofs. The Proofs are rare today, but the business strikes are more common than you might think, given a mintage of 1,600. According to “Coin Facts” there are over 900 surviving 1880 gold dollars, and most of them grade MS-64 and better.

Here is an 1880 gold dollar. This one is graded MS-65 in an old holder.



This 1882 is also graded MS-65 in an old holder.

 

Thanks for your post. When you said that the Mint actively withdrew the Type I, my thought was that the standard changed, but the weight and fineness were constant. I missed the change in diameter.

Rooting about in the garage for more numismatic books to deacquisition, I just found the Bowers/Akers Red Book on Gold Dollars (2nd ed. 2011).

 

John this was an incredibly informative post and beautifully illustrated by your selection of pictures. My heart rate actually started to rise looking at those gold pieces! Well done Sir!

I would think as we were just laying the building blocks of our our Government and then slowly evolving as a respected independent country, the Mint started out coining denominations from the best information available at the time. Then as the complaints started rolling in on designs without a value anywhere on the coin, changes were immediately planned and authorized for the new designs.

As we became a more sophisticated country then so did our coin designs. To date, we still are ever evolving. For example changing our currency to try and curb counterfeiting. Striving for constant improvement in meeting the needs of commerce.