Financial History 143 Fall 2022 - Page 30


By Eric Brothers
Alexander Hamilton ’ s 1791 “ Report on the Establishment of a Mint ” ( hereafter , “ the Report ”) is an iconic financial document in which the first Secretary of the Treasury carefully plotted the future money of the United States . However , when Congress considered the Report and enacted the Coinage Act of 1792 , important elements were excluded .
The Unit of Account in Both Gold and Silver
A main theme of Hamilton ’ s Report was that the national unit of account would be the dollar . Through images and mottos , as
Portrait of Alexander Hamilton by Walter Robertson , circa 1794 . well as everyday use , the dollar ( both in gold and silver ) would promote the bimetallic standard Hamilton desired . It would also provide a tangible embodiment of being an American and would help citizens identify with the United States as a nation , not just with their individual states . The idea was for the new American coinage to push out of circulation the ubiquitous Spanish-American eight reales ( also called “ pieces of eight ” or “ Spanish dollars ”) and other international coins , as well as the myriad state coins then in circulation .
It was important to Hamilton to mint both gold and silver one-dollar coins . In Alexander Hamilton on Finance , Credit , and Debt , Richard Sylla and David Cowen write , “ The gold dollar ’ s main purpose was to make the bimetallic standard real by having a coin of the same denomination in both metals .” Congress did not include Hamilton ’ s gold dollar in the Coinage Act . In fact , the Mint only produced a gold dollar from 1849 to 1889 . However , the Coinage Act did include the quarter eagle ($ 2.50 ), half eagle ($ 5 ) and eagle ($ 10 ) gold coins .
Removal of Foreign Coins from US Circulation
Among the themes in Hamilton ’ s Report was ending the circulation of foreign coins within a three-year period . He provided some latitude for the Spanish dollar to remain in circulation for a longer time . The intention was to have all foreign coins brought to the Mint to be melted into bullion and used to strike the new national coinage , with iconic imagery and mottos . This was part of Hamilton ’ s concept of employing American coinage to create connections between the American people and the nascent United States , although the coins were intended for international trade and not solely for domestic consumption .
However , this important proposal was not included in the Coinage Act of 1792 , and foreign coins were allowed in commerce as legal tender until the Coinage Act of 1857 . Thus , an important and voluminous source of bullion was not available to produce the new national coinage . During
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