Financial History 141 Spring 2022 - Page 28

presumption of the inexpediency of the regulation , and of the impracticability of executing it in the United States .
Therefore , Hamilton suggested in his Report an amount that was close to free coinage for the United States . He discussed that in Great Britain , where there was free coinage , the time between citizens delivering bullion to the mint and their receiving minted coins averaged a fee of 0.5 %. Since he felt that amount would not be a burden to American merchants , he suggested a fee of 0.5 % for both gold and silver coinage . Hamilton then proposed a series of new gold , silver and copper coins .
Library of Congress
Original handwritten notes of Alexander Hamilton in preparation to write his “ Report on the Establishment of a Mint .”
The latter method was discussed in a long-winded discourse consisting of numerous illustrations that presented the benefits of a free coinage . Then he wrote of France , which charged an 8 % seigniorage for producing coins from bullion :
There is perhaps no part of Europe , which has so little need of other Countries , as France . Comprehending a variety of soils and climates , an immense population , its agriculture in a state of mature improvement , it possesses within its own bosom most , if not all the productions of the earth , which any of its most favored neighbors could boast …. These circumstances concur , in securing to France , so uniform , and so considerable a balance of Trade , as in a great measure to counteract the natural tendency of any errors , which may exist in the system of her Mint …. Nor ought it to pass unnoticed , that with all these advantages , the Government of France has found it necessary , on some occasions , to employ very violent methods to compel the bringing of Bullion to the Mint ; a circumstance , which affords a strong
The Dollar and Other Denominations of Coins
The national unit of account was to be the dollar , manufactured in both silver and gold . According to Sylla and Cowen , “ The gold dollar ’ s main purpose was to make the bimetallic standard real by having a coin of the same denomination in both metals .” Of the proposed coins in the decimal denominations , the Report says that “ nothing could be more simple or convenient than the decimal system .” Hamilton felt that two important considerations were ease of circulation and keeping the cost of mintage as low as possible . He was concerned about the costs involved in the new national coinage : “ Numerous and small … subdivisions assist circulation ; but the multiplication of the smaller kinds increases expense ; the same process being necessary to a small as to a large piece .” To that end , the Treasury Secretary presented a “ small number , ‘ till experience shall decide whether any other kinds are necessary .”
1 Gold piece , equal in weight and value to ten Units or Dollars .
1 Gold piece , equal to a tenth part of the former , and which shall be a unit or Dollar .
1 Silver piece , which shall also be a unit or dollar .
1 Silver piece , which shall be in weight and value a tenth part of the silver unit or Dollar .
1 Copper piece , which shall be of the value of a hundredth part of a dollar .
1 other Copper piece , which shall be half the value of the former .
26 FINANCIAL HISTORY | Spring 2022 | www . MoAF . org