The dollar unit adopted. altogether unknown, departing from the national mode of keeping accounts and preventing rather than promoting uniformity. The system recommended was as follows: Ratio of the metals 15 to 1; a gold piece of five dollars; a silver dollar or unit, containing 362 grains of pure silver; 50, 25, 10, and 5 cent pieces of silver; all gold and silver coins to be eleven-twelfths fine, with a coinage charge of 2 to 24 per cent; two copper coins of one cent and one-half cent respectively.1 Action upon the report as a whole was postponed, but in July, 1785, the following resolutions, fixing upon three fundamental propositions, were adopted by Congress : "That the money unit of the United States of America be one dollar." "That the smallest coin be of copper, of which 200 shall pay for one dollar." "That the several pieces shall increase in decimal ratio."" In April, 1786, the Board of Treasury submitted to Congress three alternative propositions concerning the weight and fineness of the coinage proposed, as exhibited in the table below. Congress on August 8, 1786, passed a resolution 3 fixing the fineness of gold and silver coins at eleven 1 MS. Reports, Committee on Finance, Vol. 26; International Monetary Conference, 1878, p. 445. 2 Journal Continental Congress; International Monetary Conference, 3 In full in the Appendix. P. 448. twelfths, the dollar or unit to contain 375.64 grains of The Act of 1786. Finally, pursuant to a report of the Board of Treasury The Mint of September 20, 1786, Congress on October 16 of that year passed the ordinance establishing the mint.1 The mint price of standard gold, eleven-twelfths (or .916) fine, was fixed at $209.77 and of standard silver, of the same fineness, at $13.777, for the pound Troy, with a coinage charge of 2 per cent, giving a ratio of 15.22 to 1. Deposits of gold or silver were to be paid for, 95 per cent in gold or silver and 5 per cent in copper coin. The act never became fully operative. Only copper coins were actually struck under this law, and these were made receivable for taxes and public dues to the extent of 5 per cent in any payment, all other copper coins being excluded. After September 1, 1787, foreign copper coins were to cease to be current, and copper coins struck by the states were rated by weight at the value fixed by the coinage law of August 8, 1786, viz., 100 cents for 2 pounds. Constitution. The financial as well as the general economic con- The Federal dition of the country at this time was so unsettled, that it became obvious to most of the leading men in the colonies that a more stable form of government for the 1 The important parts of the act are given in the Appendix. C The consti tutional provisions. confederation was absolutely necessary. A convention of the states was called to meet in Annapolis, Md., in 1786. Nothing came of this, and another convention met in Philadelphia in 1787. Although primarily assembled to consider economic questions, the deliberations of the convention ultimately produced a new form of government, the present Constitution (without the amendments). Respecting the coinage system that instrument provides ART. I, SEC. 8. "The Congress shall have Power . . . "To coin Money, regulate the Value thereof, and of foreign Coin." SEC. 10. "No State shall . . . coin Money; make any Thing but gold and silver Coin a Tender in Payment of Debts." Thus the states surrendered the right to coin money, the power over the standard becoming an exclusively federal function. The most reliable data respecting the world's production. of gold and silver toward the close of the eighteenth century give the following annual averages: No reliable data for annual periods are available, the above estimates being conclusions reached by Soetbeer after the most exhaustive study of the subject ever attempted. The evidence all tends to verify the general conclusion that the production of gold diminished and that of silver increased, thus accounting for the fall in the market price of silver as indicated in the table of ratios. The production of precious metals in the United States prior to 1800 was insignificant in amount. Hamilton's CHAPTER II 1790 TO 1830 THE new form of government was nominally put into operation on March 4, 1789. Actually the transition. was very deliberate. Washington was not inaugurated as President until April 30, and the Treasury Department was not provided for by law until the following September. Alexander Hamilton was the first Secretary of the Mint report. Treasury, and soon after organizing the Department set himself the task of establishing a comprehensive federal monetary system. He first took up the question of the public debt, then the establishment of a banking system, and on January 21, 1791, presented to Congress his justly celebrated report upon the establishment of a mint and a coinage system for the United States.1 The unit. He examined this comprehensive subject in all its aspects and ramifications, presenting the facts and arguments bearing upon both sides of each question, and after careful analysis reached the following conclusions: 1. That the dollar, because it had been in actual use as the measure of values in practically all of the states, was the most suitable unit for the proposed system; that it was of the utmost importance to define as exactly as possible just what the 'dollar was, in order that neither debtors nor creditors might be injuriously affected. The dollars in existence varied considerably, Spain having degraded or changed the standard at different times. He therefore recommended a dollar containing 371.25 1 In full in the Appendix. |
