Financial History 141 Spring 2022 - Page 29

coins brought to the Mint to serve as raw material for the new national coinage .
Sylla and Cowen state that “ Hamilton wanted to abolish the circulation of foreign coins … by tale or rating , which was the ubiquitous practice of banks , merchants and other economic entities of assigning each foreign coin ( of full weight ) a value in dollars .” The Secretary felt the abolition was important , but advised that it was practical to delay it until the Mint produced a sufficient amount of new coins to replace them . Bank notes were suggested to help smooth the transition .
This is Eric Brothers ’ first article for Financial History . Since 2006 he has been a frequent contributor to The Numismatist . the publication of the American Numismatic Association ( ANA ). Several of Brothers ’ articles over the years have covered financial history , including “ Alexander Hamilton and the Panic of 1792 ” ( January 2021 ). He has received five literary awards for his work in The Numismatist . Brothers is a direct descendant of the Dutch colonial Kip family ( of Kip ’ s Bay ), who arrived in Manhattan in 1637 .
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Examples of coins from different states that circulated around America when Hamilton wrote his Report : New Jersey copper , 1786 ( top ); New York copper , 1786 ( middle ); Virginia half penny , 1773 ( bottom ).
Hamilton suggested names for the coins : eagle ($ 10 ), unit or dollar ($ 1 ), a tenth ($. 10 ), cent ($. 01 ) and half cent ($. 005 ). He wanted thick coins in order to prevent excessive wear . It was desired that the copper cents should have an intrinsic value close to their face value . The purpose of this was not to make a profit , but to dissuade counterfeiters from plying their trade upon the new copper pieces . Hamilton was vague about the devices to be placed upon the new coinage . In the Report he stated they “ are far from being matters of indifference , as they may be made the vehicles of useful impressions . They ought therefore to be emblematical , but without losing sight of simplicity .” The last topic covered in the Report is foreign coins that were employed in domestic commerce .
Foreign Coins in US Commerce
Hamilton wanted to end the circulation of foreign coins in America within the framework of a three-year timetable . Some leeway was provided for the Spanish dollar to be kept in circulation after that time ; however , the plan was to have all foreign
The Mint Report and Hamilton ’ s Financial Revolution
Within the span of six short years ( 1789 – 1795 ), Hamilton conceived , planned and carried out a financial revolution the likes of which the world had never seen . It included the dollar monetary union , an emerging banking system and the creation of a central bank . The other elements of his revolution were a funded national debt ( that included assuming all state debts incurred during the American Revolution ), the creation of dynamic securities markets and a rapid expansion of statechartered businesses ( including banks ) that sold tradable shares to investors .
According to Sylla , “ Although compressed into a far shorter time , the US financial revolution had many similarities to England ’ s , which began a century earlier and took decades to complete . Both financial revolutions were quantum leaps toward modernity . Both helped to make their countries into leading world economic and political powers .”
It could be argued that the dollar monetary union would not exist and Hamilton ’ s revolution would have crumbled had he not crafted his “ Report on the Establishment of a Mint .” In essence , this Report was a blueprint for a national coinage that would serve as the oil to keep the machinery of his revolution running smoothly . And if his Report was indeed the oil , then the new national unit of account , the dollar , could be considered the linchpin of his revolution . Hamilton saw a common currency — based on the dollar — as both a stabilizing and unifying force . It turned the US from a land of 13 separate states with 13 unique identities and economies into a truly United States of America .
Sources
“ Editorial Note : Jefferson ’ s Notes on Coinage .” Founders Online . https :// founders . archives . gov / documents / Jefferson / 01-07-02-0151-0001
Hamilton , Alexander . “ Final Version of the Report on the Establishment of a Mint [ 28 January 1791 ].” Founders Online . https :// founders . archives . gov / documents / Hamilton / 01-07-02-0334-0004
Hellman , C . Doris . “ Jefferson ’ s Efforts towards the Decimalization of United States Weights and Measures .” Isis , Vol . 16 , No . 2 ( November 1931 ). The University of Chicago Press on behalf of The History of Science Society .
Jefferson , Thomas . “ Notes on Coinage [ March – May 1784 ].” Founders Online . https :// founders . archives . gov / documents / Jefferson / 01-07-02-0151-0005
Michener , Ron . “ Money in the American Colonies .” EH . net ( eh . net / encyclopedia / money -in-the-american-colonies /)
Michener , Ronald and Robert E . Wright . “ Development of the US monetary union .” Financial History Review 13.1 ( 2006 ), pp . 19 – 41 .
Sylla , Richard . “ The transition to a monetary union in the United States , 1787 – 1795 .” Financial History Review 13.1 ( 2006 ), pp . 73 – 95 .
Sylla , Richard and David J . Cowen . Alexander Hamilton on Finance , Credit , and Debt . Columbia University Press on behalf of The Museum of American Finance , New York , 2018 .
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