Early coinage intrinsic values?

Discussion in 'US Coins Forum' started by Dug13, Apr 16, 2019.

  1. Dug13

    Dug13 Well-Known Member

    I have looked several sites online (wiki, coin facts, etc) but can not nail down a solid answer to my question.........maybe you guys could enlighten me.

    From what i understand Pre-33 gold coins contained the amount of gold that which it was issued, ie, 1 dollar gold coin contained a dollars worth of gold, 20 dollar gold coin contained had 20 dollars worth of gold. And everything in between was sized according to it gold contents.
    My question:
    Did this also apply to early copper coinage? Was 1 Large Cent was worth that amount of copper. Is this why the cent was reduced in size for 1856 — copper prices went up?
    Was a 2 cent piece worth 2 cents of copper?
     
    fiddlehead likes this.
  2. Avatar

    Guest User Guest



    to hide this ad.
  3. Conder101

    Conder101 Numismatist

    The early copper coinage intrinsic value was somewhat close but did not equal the face value. Originally they were supposed to have the intrinsic value equal to the face value but there were two problems. It made the coins too large, and the way the mint was set up with free coinage of gold and silver the seigniorage profit from the copper coinage was to pay the expenses of the mint. The first large cents had a weight of 208 grains. If they had their full intrinsic value they would have weighed 264 grains.

    By 1795 copper prices had risen requiring the reduction in weight of the cent in December to 168 grains. Copper stabilized and the weight remained the same until 1857, but in the early 1850's copper had risen again to the point where the cent was once again a break even proposition. Tests were made and eventually we got the small cent of copper and nickel. The addition or nickel was also intended to prop up the intrinsic value of the cent. The copper in the coppernickel cent was worth about .33 cents, and the 12% nickel was also worth .33 cents. so each cent had .66 cents intrinsic value. In 1864 the idea of intrinsic value in the cent was abandoned after the civil war tokens showed that low value coins did not have to have intrinsic value to be accepted and circulate.

    The two cent came after the concept of intrinsic value for low value coins was abandoned, it's intrinsic value was about .66 cents.
     
  4. johnmilton

    johnmilton Well-Known Member

    Usualy the older coins had a melt value that was below their face value to small degree. If that had not been true, the coins would have been hoarded and often melted, which would have met that they would not have performed their intended function.

    The early gold coins (1795 - July 31, 1834) had too much gold in them. For that reason they did not circulate and most of them were exported to Europe and melted. That's why so many dates in the 1820's to the July, 1834 coinage is so rare and expensive.

    Why is July 31, 1934 important? On August 1 the coinage authorized by the Coinage Act of 1834 began, the so-called Classic Head $2.50 and $5.00 gold pieces. The mint even considered putting the August date on those coins along with the year!

    In 1853 the weight of all silver coins, except the dollar, was reduced because the discovery of gold in California at altered the value of gold to silver. Every silver coin then in circulation had a melt value that exceeded their face value. The "Arrows and Rays" and "With Arrows" coins had a reduced wieght which made it unprofitable to melt them.
     
  5. GDJMSP

    GDJMSP Numismatist Moderator

    And it wasn't just US coins. For as long as coins have existed, at the time they were minted, their face value has exceeded their metal value. Sure, as mentioned above, there have been some exceptions worldwide where that was that was not the case due to extraordinary circumstances. But as a general rule they were few and far between.

    The minting of coins has always been a business, and seigniorage has always been the source of the profit. Long before the US even existed the Nobility used to pay a lot of money to Royalty just to purchase the right to mint coins because it was such a profitable business. And it still is even today.
     
    Dug13 and fiddlehead like this.
  6. Ag76

    Ag76 Coins 'n' history

    ^ The exception would be bullionlike coins with no fixed denomination in terms of subsidiary coins like the late-Roman aureus, which Porteous claims in Coins in History came unmoored from the denarius and floated freely. The imperial government enjoyed seigniorage from debasing the other coins while requiring tax payment in aurei. In other cases, the profit from minting bullionlike coins has come from coinage fees at the mint or sale premiums, rather than seigniorage proper. Well, except when governments surreptitiously debased these coins and tried to pass them off as possessing higher fineness than they did.

    Nowadays, people don't use bullion-type coins for transactions (*), but apparently this was quite common all the way up to the 1930s in international trade. After FDR banned private gold ownership, the U.S. Supreme Court set aside gold clauses in contracts, and so it's now largely pointless to try to require payment in precious metal.

    (*) Except for the New Hampshire Free Staters (https://www.npr.org/sections/money/2013/07/05/198413086/episode-286-libertarian-summer-camp).
     
    Dug13 and fiddlehead like this.
  7. furham

    furham Good Ole Boy

    Such great answers. That's why I come here.
     
    Dug13 and fiddlehead like this.
Draft saved Draft deleted

Share This Page