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Message:: [QUOTE="johnmilton, post: 8543367, member: 101855"]I wrote this article for my local club. I thought that some of you might enjoy it. I am going to cut it up into a few parts.         When the United States won its independence from Great Britain in 1783, one of the worst problems our country faced was a shortage of “good money.” There was very little gold and silver coinage available, and the copper coin market was soon to be flooded with lightweight counterfeit pieces. Paper money was not an option. The currency that the Continental Congress had issued during the Revolutionary War, was virtually worthless. That gave all paper money a bad reputation.         I was surprised to learn the England faced almost the same problem during this period. Very few silver coins were in circulation, and most of the circulating copper coins were lightweight counterfeits. Paper money was still an option because it had not been discredited, but using it had its limits. [ATTACH=full]1509194[/ATTACH] 1774 Half Penny         The British Government issued copper half pennies and farthings (quarter pennies) from 1780 (1781 for farthings) until 1775. After the British coinage ended, counterfeiters filled the void with mostly low quality, light weight pieces. The situation was made worse by the fact that counterfeiters melted genuine pieces and used the copper to produce their bogus products.         At the same time, the beginning of the Industrial Revolution prompted many people leave their farms and work in factories, where they expected to be paid with coins. Factory owners were in a bind because they could not obtain enough coinage to pay them. In 1787 the Parys (copper) Mining Company had copper half penny tokens produced to pay their employees. Unlike the counterfeits that were plaguing the economy, these half penny tokens, which were struck on steam presses, were well made and attractive. The British Government posed no opposition to these tokens because they were made of copper and infringe on the king’s prerogative over gold and silver coinage.         As other companies issued tokens to pay their employees, a collector base developed for these pieces. The token makers issued “limited editions” to spark collector interest. James Condor wrote an early variety guide to thee series, and today these pieces are known as “Condor tokens.” There are more than 10,000 varieties. [ATTACH=full]1509201[/ATTACH] 1787 George III Shilling The French Revolution and Napoleon Rock Europe         The French Revolution, the rise of Napoleon and his subsequent conquests of European nations, brough fear and loathing to much of Europe from the 1790s until the Battle of Waterloo in 1815. It not only frightened the royalty but many common people, including merchants and the working classes. What started as a demand from the French king for higher taxes to cover the national debt broke out into a revolution with drastic changes in the class of people who ran the country.         Ultimately the French king and queen were executed by the dreaded guillotine in early January 1793. That marked the beginning of the “Reign to Terror.” No Frenchmen was safe from accusations that could result in their execution. Some hoped that the rise of Napoleon Bonaparte would bring stability, but when he began his campaign to conquer all of Europe, concern deepened throughout England. The nations of Europe fought unsuccessfully to bring down the French regime almost from the time of its birth. The French revolutionaries responded by attempting to bring their movement to other countries. One of those attacks occurred on English soil in 1797. The Battle of Fishguard         In late February 1797, French general, Lazare Hoche, launched an attack on the western coast of the British Isles. He had planned a three pronged assault with two diversionary operations and a main attack on Ireland. He hoped to link up with the revolutionary group, The Society of United Irishman, to expand his conquest. Bad weather and poor planning diverted the main assault and one of the diversionary operations, but a second diversionary operation landed in western Wales and proceeded toward  the city of Bristol. A hastily formed group of British soldiers and local citizens defeated and captured the French forces, but what became known as “The Battle of Fishguard” deepened a crisis that had already weakened the British monetary system. Coin Hoarding Begins         Once the news of the invasion reached the rest of England, panicked citizens hoarded large numbers of gold and silver coins from circulation. There was a run on the Bank of England which claimed much of the gold coinage that the bank had on hand. That forced British Government to abandon the gold standard for more than 20 years. The bank issued one and two pound notes in place of the gold coinage. Other banks were also allowed to issue their own currency if they had enough gold bullion to back their notes.         The shortage of British coins in circulation was caused by two problems. The most immediate crisis stemmed from hoarding caused by the panic, but there were other issues. Before the coinage reform of 1816, the British government had tried to circulate silver that had a face value that equaled their melt value. Based upon the discredited “commodity theory of money,” this system was unworkable. Whenever the melt value exceeded the face value of the coins, the coinage was removed from circulation. The solution was to issue a “token coinage” where the value of the silver in the coinage was below the face value, but the government would not enact that reform for many years.         Second, inadequate capacity of the mint located at the Tower of London were equally to blame. The mint was unable to issue enough coins to meet the nation’s needs and was sorely in need of replacement. The British Government responded by moving its minting operations to another location, Tower Hill, starting in 1806. In the short run, the demand for silver coins prompted the Bank of England to take more unusual actions. Gold Coinage is Curtailed         At the beginning of the conflict with France, the British Government sent significant sums of money to European nations, hoping that those countries would wage an effective war against the French revolutionaries. Those policies were ineffective because those nations frequently used the funds for other purposes, and lost many battles to Napoleon. The flow of gold out of England and extensive hoarding after the Battle of Fishguard forced the British Government to suspend its production of gold Guineas in 1799, which were valued at 21 shillings. The government continued to issue half guineas and added a new denomination, the third-guinea in 1797. These small gold coins allowed the Bank of England to pay its dividends in gold. The British Government would not be able to issue larger gold coins on a regular basis until after the final defeat of Napoleon in 1815. [ATTACH=full]1509203[/ATTACH] 1798 Guinea [ATTACH=full]1509204[/ATTACH] 1800 Third Guinea [ATTACH=full]1509205[/ATTACH] 1806 Half Guinea[/QUOTE]

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