INTRODUCTION
The early history of American coinage was shaped by one overriding factor: the lack of precious metals. The eastern half of North America lacked deposits of gold or silver at a time when gold and silver coins were the most acceptable trade currency. Therefore, the English colonists had a dilemma: how to get hard money or what to use in its place? To solve their domestic economic needs, English colonists got creative. Fur, nails, tobacco, shells and anything else that could be traded were used as money.
The new United States of America needed a better solution. After experimenting with state and privately-issued coinage during the Confederation period (1783-89), a national mint was established by the Constitution in 1789. However, not until 1857 – after the California Gold Rush – did the U.S. produce enough domestic coinage to remove foreign coins as legal tender.
Did You Know?
- The Constitution specified coin denominations, metals and designs. After contentious debate, Congress declared all coinage would feature Lady Liberty on the obverse and (except for coppers) an eagle on the reverse. Also requisite: the date, “UNITED STATES OF AMERICA,” and “LIBERTY.”
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When the founding fathers formed these United States from the bickering former English colonies, they needed to forge a sense of national identity. A unified national currency was an ideal solution – improving the economy by eliminating the competing colonial currencies (based on the English pound), and simultaneously fostering a sense of national unity. Thomas Jefferson provided the inspiration by recommending the readily available Spanish Colonial monetary system. Spain’s silver 8 reales (known as “Spanish dollars”) and gold 8 escudos (“doubloons”) became the model for the nation’s inaugural coinage.
The first United States Mint was built in the new nation’s capital, Philadelphia, in 1792. Two years later, the U.S. released its first silver dollars, followed by gold eagles ($10) and half eagles ($5) in 1795. The quarter eagle ($2.50) of 1796 completed the early series of gold coins. Shortages of gold and silver continued to plague the US Mint for many years, forcing the nation to rely on substitutes – in particular, privately-issued paper currency – until the great
western gold discoveries of the mid-19th century.
