Before the first coinage in the United States, American citizens exchanged goods and services through a barter system. At this time, there are no coins available except for various foreign coins such as widely traded and trusted Spanish real coins. With the signing of the Constitution and a newly established country that allowed Congress to mint currency, under the leadership of President George Washington, the first minting bill was introduced and passed Congress.
This article will introduce a brief history of coins and events that revolve around changes that began in 1792 and spanned centuries.
- The Minting Act of 1792 (also known as the Minting Act) established the United States Mint to oversee the production of coins minted with gold, silver, or copper.
- The Coinage Act of 1834 increased the ratio of silver to gold to approximately 16:1.
- The Mint Law of 1873 (also called the “crime of 1873” by silver miners) demonetized silver, effectively causing silver demand and prices to plummet.
- The Minting Act of 1965 eliminated silver from the 25-cent coin.
The beginning of American coinage
The first coin bill was passed on April 2, 1792, and the United States Mint was established to oversee all mint operations and manage the mint’s first employees, including an engraver, a chemist, and A chief mint. According to the law, all employees must pay a security deposit of US$10,000 before they can be considered for these positions. The first coins in the United States were made of gold, silver, or copper, and were engraved with writings and inscriptions of freedom. The first coins minted were:
- 10 USD Golden Eagle with 270 grains (17.5 grams) of pure gold
- USD 5 gold half eagle, containing 135 grains (8.75 g) of pure gold
- $2.50 quarter eagle, 67 and 4/8 grains (4.37 g) standard gold
- USD 1 with 416 grains (27 grams) of standard silver
- Half a dollar plus 208 grains (13.5 grams) of standard silver
- 104 standard silver 15-cent coins
- Dimes, spelled “dismes” until the 1800s, contains 41 and 3/5 grains (2.7 grams) of silver
- Half dime coin with 20 and 4/5 grains (1.35 g) standard silver
- One penny has 11 pounds (17.1 grams) of copper
- Half a cent contains 5 and 1/2 pence (8.55 g) copper
The ratio of silver to gold is 15:1. Therefore, one troy ounce of gold can buy 15 ounces of silver.
Although considered mysterious by some investors, the ratio of silver to gold represents an indicator that can help traders discover unique profit strategies.
The U.S. dollar is minted in accordance with the Spanish tradition of 8 reais. English speakers refer to Spanish 8 reais as the US dollar polished in Spain. The term “milling” refers to the “milling” of coin blanks called discs on a milling machine to keep the weight and size consistent and prevent counterfeiting.Advanced milling technology enables these Spanish coins to be used in many countries around the world.
Coinage Act of 1834
The official gold price of the US government remained at US$19.75 per troy ounce from 1792 until it rose to US$20.67 in 1834. In 1934, the price rose to 35 dollars. In 1972, the price rose to 38 U.S. dollars, and in 1973 it rose to 42.22 U.S. dollars.
During the presidency of Andrew Jackson, Congress passed the Minting Act passed in 1834, which adjusted the new value of gold. New gold weight and value regulations have been adopted to synchronize the value of gold with the market and its value relative to silver.The bill revised the ratio of gold to US dollars to be equivalent to US$20.67 per ounce of gold, thereby increasing the value of gold and increasing the ratio of silver to gold to around 16:1.
Coinage Act of 1873
The coinage law of 1873 was also called the “crime of 1873” by western silver miners. The bill demonetized silver and effectively ended the silver boom that enriched the economies of Western countries. The gold standard adopted by governments around the world no longer uses silver.
A powerful force called the “Free Silver Movement” was established, which would contribute to the passage of the Brand Allison Act of 1878. The bill allows the Ministry of Finance to purchase US$2 to US$4 million in domestic silver each month to be minted into silver dollars for circulation. The bill passed Congress after overturning the veto of President Rutherford Hayes.
The Sherman Silver Purchase Act passed in 1890 replaced the previous law, increasing the purchase of 4.5 million ounces of silver each month.President Cleveland later repealed this bill in 1893 because investors sold silver in exchange for gold, and the U.S. Treasury’s gold reserves were running out.
In 1861, the Minister of the South encouraged the Minister of Finance Salmon P. Chase to engrave “In God We Trust” on the coin. Congress approved it in 1864 and used the term for the first time on the two-cent coin. With the passage of the Act in 1865, the inscription was expanded to include gold and silver coins. By 1873, all coins were approved by “We Believe in God” without further approval by Congress.
20th century and beyond
Under the leadership of President Johnson, the Minting Act was passed in 1965. Due to the shortage of silver coins and coins, silver coins were eliminated from certain coins.A quarter of silver and a dime of silver completely eliminate the silver content, and the silver content of half a dollar is reduced from 90% to 40%. Silver is replaced by alloys of copper, zinc, manganese, and nickel. In order to prevent hoarding, a freeze date has also been passed. All newly minted coins have a period of 1964 date. The mint mark was also eliminated for five years. The mint mark is the letter on the coin, indicating which mint produced the mint. This helps to remove any features that help identify newer coins and prevent them from being removed from circulation.
The President’s One Dollar Coin Act of 2005 authorizes the Secretary of the Treasury to design and issue one-dollar commemorative coins for each former U.S. President and his spouse.The previous $1 commemorative coins will continue to exist-for example, Sacagawea $1-but not less than 1/3 of the total number of all $1 coins.
Since the barter system, American coinage has come a long way. Although it seems to have been resolved, there will no doubt be more changes. For many investors, interest in minting leads to interest in currencies and currency transactions. In fact, the market for trading currencies (called the foreign exchange or foreign exchange market) is one of the largest and most liquid markets in the world, with trillions of dollars changing hands every day.