Cyclopædia of Political Science, Political Economy, and the Political History of the United States

Edited by: Lalor, John J.
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New York: Maynard, Merrill, and Co.
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Includes articles by Frédéric Bastiat, Gustave de Molinari, Henry George, J. B. Say, Francis A. Walker, and more.
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COINAGE. Coinage is fashioning pieces of metal and impressing them with suitable devices to fit them for use as money.


—The necessity of some convenient measure or representative of value must have been apparent to mankind as soon as mutual dealings and exchanges were undertaken.


—While values at first, especially among barbarous tribes, were estimated by taking such articles as beads, feathers, shells, salt, cattle, and even the perishable products of the earth, for standards, at a very early date metals seem to have been selected for that purpose by every nation whose records have been preserved in history.


—On account of their greater convenience, durability, beauty, or desirability for use or ornament, gold, silver, copper, tin pure or alloyed, and even iron, and, at later periods, nickel and platinum, have been used for money; and gold and silver are now universally preferred to all other substances.


—It is generally supposed that previous to the invention of coined money the metals subsequently used in coinage had already been adopted as standards, and that a given weight of the metal had become the unit of value, the coins being pieces of the metal conforming to such weight or multiples of it.


—This supposition is in harmony with the fact that the names of many early coins are identical with denominations of weights, as the pound, livre, mark, ounce, talent, sheckel, drachma, toel, etc.


—The earliest writers and historians also give values in definite weights, of bronze, copper, iron, silver or gold, at periods prior to their mention of coined money.


—Upon his invasion of Great Britain Cæsar found the ancient Britons using bronze and iron bars adjusted to a certain weight. (DeBello Gallico, liber v., cap. 12.)


—The invention of coined money has been claimed for the Lydians by Herodotus, and the coins of Sardes, B. C. 800, are thought to entitle them to the honor. It has also been attributed to the Persians and Ionians, but is more frequently ascribed to Pheidon, the ruler of the island Ægina, a dependency of Argos in Greece, 750 B. C.


—The Chinese, however, assert a still higher antiquity for their coins of copper and iron, of which one collection in the United States (Lake Forest, Ill.) contains genuine specimens of the issues under every dynasty from B.C. 250 to the present time. But the national archives of their government contain catalogues not only of these coins but descriptions of others issued by previous dynasties commencing with Fuli Hi, B. C. 3289. Visual evidence of such early coinage is not accessible at this day, and the existence of many of the emperors who are said to have issued them is considered somewhat mythical. Williams, however, who from long residence in China, was able to obtain very valuable information, in an address delivered by him on Chinese coins, describes those issued from the time of the Yaon dynasty, B. C. 2356, to the Wing dynasty, A. D. 1642, at which time the emperor Kanghe made a catalogue of his collection, which claims to embrace coins of all the subsequent dynasties commencing with the Yaon dynasty.


—To make delivery of the exact weights of metal used or referred to in buying and selling, it became necessary to cut or mould and adjust the pieces, so that they would be of the precise weight and in convenient form for handling. The shape was not material, and the earliest rude pieces of metal used as money were of a great variety of shapes—square, hexagonal, octagonal, round, oblong, flat, discs, solid or perforated, circular rings, etc. Those found more portable and convenient and best adapted for use, gained greater currency, gradually superseded others and finally became recognized by custom or law, as definite weights of metal and current money. The mechanic or person fashioning these better forms began to impress them with some characters, names or devices to certify their weight and indicate their proper name. And thus probably coins came to be made and stamped at first by private individuals, and finally by the state or royal authority.—"Coinage," said Jefferson, "is peculiarly an attribute of sovereignty." The interests of the people require that the right to coin money should be reserved as a governmental prerogative, for the public faith is the best guarantee of its honesty. The coins of empires and monarchies bear the likeness of the sovereign reigning at the date of their issue, while those made by republics or free cities have usually some device, emblematic, or indicative of the people or state authorizing their coinage.


—The devices upon coins are of varied character, from simple letters or figures stamped or punched in the rudest manner to the most graceful lines and beautiful forms that can be impressed upon metal by the highest skill of the engraver's art.


—Coins may very properly be divided into two classes, ancient and modern, although some writers distinguish a third, the mediæval.


—Ancient coins comprise the coinage of Europe, Egypt and western Asia, to the period when the barbarians invaded Europe and put a stop to all the arts, including that of coinage. Among the ancient coins, the most noted for their beauty and excellence are: 1, Those of Greece, her colonies and others having Grecian inscriptions; 2, Roman and all coins having Latin inscriptions to the time of the Eastern empire, which forms the 3rd class, or Byzantine coins; and 4, All with Arabic or other inscriptions.


—The Greek are the oldest coins extant, and were first struck in gold and silver; they were issued by upwards of 500 kings, and by free cities numbering about 1,600. They are of various designs and styles of execution, from the rudely struck didrachm of Ægina, bearing upon one side a crude representation of a tortoise and on the other the mark of the punch with which it was driven into the die, to the highly finished and perfect gems coined 400 to 200 B.C., with raised devices upon both sides and long and elaborately worded inscriptions.


—The earliest Roman coins were struck in bronze about 400 B.C. Silver was introduced about 250 B.C., and gold a half century later. The "as" was the unit of value, was upward of three inches in diameter, and was equivalent to 12 ounces. The emperor Augustus Cæsar commenced the imperial series of gold, silver and copper coins, which lasted nearly 500 years, and included about 300 emperors with their wives and children. Colonial coins were struck in many provinces of the Roman empire, and in nearly the same lands as those of the Greek class.


—The Byzantine coins, so called from Byzantium, the Greek name of Constantinople, formed the greater part of the currency of the middle ages; the gold coins are the most noted, and are termed "bezants;" the copper pieces are large in number and possess but little interest. The oriental coins are very numerous in types, and extended from Persia and Hindostan on the east to Spain and Morocco on the west.


—Among modern coins those of England form the longest continuous series, and exhibit a gradual improvement in artistic designs and mechanical execution.


—In tracing the advance in the art of coinage it will be instructive to contrast Roman coins and methods of manufacture in their best days with the coins and processes employed at the present time. A coin, to best fulfill the purposes for which it is intended, should be of the most convenient form for counting and handling; it should be of an alloy of the metals in such proportion as will make the hardest metal for resisting wear compatible with being struck by dies; it should bear engraved devices of such a character as guarantees the fineness and value, and the devices should be properly protected from abrasion by a raised rim, which also enables a number of single pieces to be arranged in piles of uniform height. The engraved devices should be sufficiently elaborate to render counterfeiting difficult, but not so minute and delicate that the coins will soon become smooth from abrasion.


—Under the Roman empire, even at the time when the art of coinage was brought to its highest development, the process of manufacturing coins was a laborious operation and required many artists and workmen. First was the optio, or director; then exactores or nummularii, assayers; scalptores or cœlatores, die engravers; cenarii, refiners; fusarii or flatuarii, melters equatores, adjusters; signatores, who certified the same; suppostores, who placed the pieces on the dies; and malleatores, who struck the blow. The metal was assayed, refined and cast into bullet-shaped pieces. This was necessary to bring out the high relief, the busts on Roman coins being very prominent. The bullets were placed between the dies which were struck by hammers. As the edges were unprotected, or not confined by a collar, they spread out into an irregular circular form; such pieces could not be piled, and the high relief of the devices rapidly became abraded, while the irregular outline afforded opportunity for fraud by clipping off portions of the metal.


—This rude and imperfect mode of coining continued without any improvement of importance until about the middle of the sixteenth century, when the screw press was employed for striking coins. This consisted of a screw carrying the upper die and worked by a revolving arm or lever, the lower die being firmly fixed beneath. The edges of the coin were, however, still left in a ragged, unfinished state, and the collar was introduced to confine the piece at the time the impression was made. The collar also imprinted upon the edge of the piece, as it expanded under the blow, whatever devices or legends were engraved upon the inside.


—The next improvement in the art of coinage was the invention by M. Castaing, in 1685, of the milling machine. This not only placed upon the edges the intended devices, but raised them so as to protect the face of the coin from abrasion.


—The use of steam for coinage machinery, and the invention of the toggle joint press, left nothing to be desired in rapidity of execution of the coins and uniformity in the blow or pressure given to the planchet. The method of receiving, melting and coining gold bullion, as conducted in the United States mint, or that of any other well appointed mint, will show the greater superiority in accuracy, mechanical skill, and rapidity and economy of manufacture, attained at the present day, in contrast with that in vogue among the Romans and Grecians.


—Gold bullion as received at the mint is weighed in the presence of the depositor. and a receipt or certificate of the weight of the deposit is given him. The bullion is then melted and cast into a bar. In this process the base metals contained, if any, are, by the use of oxidizing fluxes, to a greater or less extent removed. A sample is cut from the bar for assay, and from the fineness thus ascertained and the weight after melting, the value is calculated and paid from the bullion fund to the depositor, less the mint charges for parting, refining and toughening, or for such of these operations as are required to fit the bullion for coinage, and also the charge for the amount of copper alloy required to bring the bullion to standard fineness.


—The deposit now becomes the property of the government, and if containing partible silver is sent to the refinery, in order that the silver and gold may be separated. In the United States mint this operation is conducted by means of acids which have no effect upon the gold, but unite with and hold in solution the silver and such base metals as remain after melting and fluxing. After the solution containing the silver has been drawn off, the gold which remains in the form of a fine powder is washed and pressed by hydraulic pressure into cakes, which are dried, melted, cast into bars and assayed, preliminary to manufacturing the ingots for coinage. In some foreign mints the separation is accomplished by passing a current of chlorine gas through the metal while in a melted condition, converting the silver into a chloride, which is decanted or otherwise removed from the gold. The result obtained by either operation is the same, procuring ductile gold, nearly or quite pure, to be alloyed with copper in the proper proportion to make standard metal. Sufficient copper is added to the gold to reduce its fineness to 900 thousandths, and the metals are melted, thoroughly stirred, and poured into moulds, which form it into ingots of from 10 to 12 inches in length, 5/8 of an inch to 1 5/8 inches in width, and 3/16 to ¼ of an inch in thickness, the size depending upon the denomination of coin that is to be made. After the metal has solidified in the moulds the ingots are removed, cooled in water slightly acidulated with sulphuric acid, the edges filed smooth, and the sunken tops cut off with shears.


—Each melt of ingots is carefully assayed, and if the fineness is not safely within the legal tolerance, it is remelted.


—Rolling is the next step in the process. The ingots are passed several times between heavy rolls of chilled iron or steel, until the strips produced are brought nearly to the proper thickness for the desired coin, the distance between the rolls being adjusted and reduced each time by screws and an index guide.


—After rolling, the strips are annealed by being heated to redness and plunged in water; one end of each is tapered by the "pointing rolls," and the pointed end is introduced between two fixed dies of hardened steel on the draw bench; it is grasped by iron jaws which connect with an endless chain and the strip is forcibly drawn between the dies. The result is that all irregularities left by the rolls are removed and the strip is rendered uniform in thickness. This operation requires the most delicate adjustment of the draw bench dies, for the nearness to standard weight of the pieces cut from the strips depends upon the accuracy of the machinery as well as the skill and judgment of the workmen.


—The strips are then taken to the cutting press, in which a punch of steel of the same diameter as the desired coin descends into a steel bed, and the strip being introduced between the punch and bed, at every stroke a blank or "planchet" is cut out and falls into a catch box below. The blanks are then cleaned, and, in the case of those for the gold coins and standard silver dollar, each one is weighed on a delicate balance; those found too heavy are filed to the proper weight, while those too light are returned, together with the strips from which the planchets were punched, called clippings, to the melting pot.


—Subsidiary silver and minor coins are not adjusted by hand, reliance being placed upon the accuracy with which the draw bench does its work, to bring the blanks within the legal limits for weight.


—To protect the engraved surfaces of the coin from abrasion, the blanks are now "milled," which consists in raising the edges. The milling machine is a steel disc with grooved edges revolving horizontally, and a cheek of steel also grooved, that can be fixed by set screws at a distance from the disc slightly less than the diameter of the blanks, which are placed in an upright tube and carried one by one between the cheek and disc, and as the latter revolves the piece is rotated and finally delivered into a suitable receptacle. The pinching rounds the sharp edges left by the cutting punch and thickens the whole circumference at the expense of the diameter.


—The milled planchets from the various operations of rolling, annealing, etc., have become discolored by the oxidization of the copper alloy, to remove which they are heated in an annealing furnace to a red heat and immersed in a bath of sulphuric acid and water, which removes the oxide of copper and leaves the pieces bright and clean; they are then dried in sawdust containing no resinous matter and are ready for the coining press.


—In the United States mint the coining press used is what is known as the "toggle joint" press. The blanks to be struck are put into an upright tube on the press, from which they are successively taken by the feeders, two pieces of steel which clasp the lowermost blank in the feeding tube and carry it forward and deposit it in a circular ring or collar in which it is struck; the collar not only prevents the blank from expanding in diameter under the force of the blow, but on the inside is fluted or grooved, which gives the finished coin its grooved, or, as it is termed, the "reeded" edge. At each revolution of the press the upper die descends and strikes the piece within the collar; the lower die then ascends and pushes the coin out of the collar, and it is carried forward by the feeders, as they bring another blank to the collar, and it drops into a box placed below the press. The dies with which the coins are struck are made of steel engraved with the devices and inscriptions in intaglio, which appear upon the coin in relief.


American Colonial Coinage. During the early days of the American colonies the metallic circulation consisted chiefly of foreign coins. A coinage, authorized by the colonial assembly of Massachusetts, was commenced at Boston in 1652, and continued for 34 years, consisting of shillings and of six and three pence pieces. At first they were irregular in shape, with the denomination stamped on one side in Roman numerals and the initials N. E. on the other. These pieces being little better than planchets afforded opportunity for fraudulent clipping of the edges, and the designs were soon changed; on the obverse was a pine tree in a double ring, containing the inscription "Massachusetts in," and on the reverse the date and denomination in the centre and "New England An. Dom." between the rings—In 1722, during the reign of George I., coinage of pieces known as the "Rosa Americanas" was made by authority of the British government for circulation in the American colonies; and in 1773, in the time of George III., a copper coinage was executed for Virginia. From 1778 to 1787 the congress of the confederation had the sole and exclusive right and power of regulating the alloy and value of coin struck by their own authority or by that of the respective states. In June, 1785, Vermont granted to Reuben Harmon, Jr., the right to coin copper money for that state. Connecticut, on the 20th of October, 1785, authorized Jas. Hillhouse, Jos. Hopkins, Samuel Bishop and John Goodrich to coin copper pieces to an amount not exceeding 10,000 pounds. In June, 1786, New Jersey also issued a grant to Walter Mould, Thos. Goodsby and Albion Cox to coin 10,000 pounds; and on the 22nd of October authorized Thos. Goodsby and Albion Cox to coin two-thirds of the same amount. Massachusetts, on Oct. 17, 1786, passed an act establishing a mint which coined cents and half cents.


—The earliest coins struck by authority of the United States are known as "Fugios." The following resolution of the congress of the confederation, adopted July 6, 1787, authorized their coinage and specified the devices and inscriptions: "Resolved, That the board of treasury direct the contractor for the copper coinage to stamp on one side of each piece the following device, viz., thirteen circles linked together, a small circle in the middle, with the words 'United States' round it; and in the centre the words 'we are one;' on the other side of the same piece the following device, viz., a dial with the hours expressed on the face of it; a meridian sun above, on one side of which is to be the word 'Fugio,' and on the other the year in figures, '1787,' below the dial 'mind your business.' " Besides these, a variety of copper pieces were coined by private enterprise both in this country and abroad.


Coinage of the United States. The constitution of the United States (Art. 1, Sec. 8) vested in congress power to coin money and regulate the value thereof, and of foreign coins. Shortly after the organization of the general government a mint, for the purpose of national coinage, was established by the act of April 2, 1792, to be situated and carried on at the seat of government of the United States, then at Philadelphia.


—Upon the removal of the seat of government to Washington it was provided that the mint should remain in the city of Philadelphia until March 4, 1801. By similar provisions in subsequent acts, the period was extended from time to time until 1828, when its location in that city was made permanent until otherwise provided. All the coinage of the United States, prior to 1835, was executed at Philadelphia. By the act of March 3, of that year, branch mints were established at Charlotte, N. C., and at Dahlonega, Ga., for the coinage of the gold mined in the vicinity of those places; and at New Orleans, for the coinage of silver imported from Mexico. Shortly after the discovery of gold in California, by the act of July 3, 1852, a branch mint was authorized to be established at San Francisco, Cal.


—The discovery of gold in the Colorado placers secured a mint for Denver in 1862, and the rich deposits of the Comstock lode induced congress, in 1863, to authorize the establishment of a mint at Carson, Nev. Although a coiner was appointed, no machinery for coinage was purchased, and no national coins have been struck at the Denver mint.


—By the coinage act of 1873 the Denver and Charlotte mints were changed into assay offices. Coinage was suspended at New Orleans from the commencement of the war in 1861, until 1878.


—Besides the mints mentioned, assay offices for the accommodation of the mining and commercial interests of the country have been established at New York, Boisé City, Idaho, Helena, M. T., and at St. Louis, Mo., where gold bullion is received and its net value paid to the depositor, less the charges, as at the mints. At the New York assay office silver as well as gold bullion is received for manufacture into fine bars and for separating the gold and silver. Neither of these operations is carried on at the other assay offices or at the Denver mint.


—The coinage act of 1792 established the silver dollar as the unit. It contained 371¼ grains of pure, or 416 grains of standard, silver; this proportion made a fineness of about 892 4/10 thousandths, and was deduced from the supposed average contents of the Spanish milled dollar as then current. This act fixed the relative value of silver to gold in the coinage as 1 to 15, and the fineness of the gold coins at 11 parts pure gold and 1 part of alloy. This fineness corresponded to the standard of British gold, 916 2/8 thousandths: the eagle contained 247½ grains of pure, or 270 of standard, gold.


—The act of June 28, 1834, reduced the amount of pure gold in the eagle to 232 grains, and fixed the weight at 258 grains; the consequent fineness, therefore, was 899 225/1000.


—The act of Jan. 18, 1837, established 900 as the fineness for both gold and silver, but did not change the standard weight of the eagle, which therefore increased the pure gold contained to 232.2 grains. This act also reduced the standard weight of the silver dollar to 412½ grains; but as the fineness was increased proportionate to the reduction in weight, the amount of pure silver contained remained the same.


—By these changes 25.8 grains of gold and 412½ grains of silver could each be coined into a dollar, and the relative value of silver to gold in the coinage became as 25.8 to 412.5, or 1 to 15.98 nearly. As France was then coining silver and gold at a relative valuation of 1 to 15½, and other European nations at a valuation of silver also higher than that of the United States, an ounce of French or English gold taken to the United States would buy 15.98 ounces of silver, of which silver taken to France but 15½ ounces would be required to purchase another ounce of gold, leaving .48 of an ounce, or 3 per cent., for profit and expense of transfer. In consequence of this the full-weight silver coins were exported, causing a scarcity of United States fractional silver coin, so that the silver circulation consisted mostly of smooth, abraded Mexican and Spanish silver coins. In order to prevent exportation of United States fractional silver coins the act of Feb. 21, 1853, reduced their weight to 384 grains of standard silver to the dollar's worth, and further provided that no deposits of silver bullion should thereafter be received for coinage into fractional coins, which were to be manufactured solely on government account from silver purchased for that purpose. The coinage of silver dollars, though commenced in 1794, amounted, up to 1840, to but $1,501,822, having been wholly suspended for 30 years originally in 1806 by executive order. They continued to be coined for depositors of silver bullion until discontinued by the coinage act of 1873, which authorized the coinage of the trade dollar of 420 grains in its stead. This coin was not intended for circulation but for export to oriental nations; 35,959,360 were struck, of which 27,089,877 were exported. When, however, from the decline in the value of silver, 420 grains became of less value than a dollar, it was profitable to owners of silver bullion to have it coined into trade dollars for circulation. Their coinage was therefore limited by joint resolution of congress, of July 22, 1876, to the actual export demand. Since April, 1878, their coinage, except for specimen pieces, has been suspended.


—The coinage act of 1873 created the mint bureau as a special division of the treasury department, with the director of the mint as the chief officer, under the general direction of the secretary of the treasury. Prior to the passage of this act the chief officer was the director of the mint at Philadelphia, and the other mints were branches of that institution; they are now independent of each other, and each is in charge of a superintendent who reports to the mint bureau.


—The coins authorized by the coinage act of 1873 are; in gold, the double eagle, eagle, half eagle, quarter eagle, three dollar and one dollar; in silver the trade dollar, half dollar, quarter dollar and dime; and in base metal, the five, three and one cent pieces.


—The act of Feb. 28, 1878, authorized the coinage of the silver dollar of 412½ grains, and made it an unlimited legal tender.


—All United States gold and silver coins are of the standard fineness of 900 parts of fine metal and 100 parts of copper alloy, of which, in the case of the gold coins, not more than one-tenth may be silver, and in the silver coins consists wholly of copper. The unit of coinage is the gold dollar of a standard weight of 25.8 grains, and the other gold coins are multiples of this weight. The trade dollar weighs 420 grains, the standard silver dollar 412½ grains, and the divisionary parts of the dollar—the half, quarter and dime—weigh, respectively, 12½, 6¼ and 2½ grammes. The minor coins are as follows: the five and three cent pieces, composed of an alloy of three-fourths copper and one-fourth nickel, weigh, respectively, 77.16 grains and 30 grains; the one cent weighs 48 grains, and is 95 per cent. copper and 5 per cent. tin and zinc.


—It being impracticable to make every coin rigidly conform to the prescribed standard, a deviation is allowed in the fineness of gold coins, of one thousandth, and in silver coins of three thousandths. The legal tolerance for weight for the double eagle and eagle is one-half of a grain; for the half eagle, quarter eagle, three dollar piece and dollar, one-fourth of a grain; and for each silver coin one and a half grains. The minor coins can not deviate more than twenty-five thousandths in the proportion of nickel, nor vary in weight from the standard more than three grains for the five cent piece, and two grains for the three and one cent pieces.


—The gold coins of the United States are a legal tender in all payments at their nominal value, when not below the standard weight and limit of tolerance provided by law for the single piece. The standard silver dollar has unlimited legal tender, and the silver coins of lesser denominations are legal tender in all sums not exceeding ten dollars, in full payment of all dues public and private. The minor coins are legal tender at their nominal value for any amount not exceeding twenty-five cents in any one payment—The total coinage of the United States mints, from their organization to the close of the fiscal year 1881, amounted to $1,545,508,866.65.


—The following table shows the amounts coined, during the different periods named, at the various standards of weight and fineness:

Table.  Click to enlarge in new window.


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