After the Founding Fathers signed the Declaration of Independence and the dust settled, the newly formed United States faced a daunting task: supplying its citizens with currency. After many years of planning, the government finally centralized the banking system and still prints and manages currency today.
Currency Under the Articles of Confederation
Under the Articles of Confederation, each state minted its own currency. This created problems, as no commission existed to determine currency conversions between states, and states could setup costly tariffs to inflate the value of their money. The government established the U.S. Treasury Department in 1789, led by Alexander Hamilton and David Rittenhouse. In 1792, Rittenhouse became the first director of the Philadelphia Mint, and both he and President George Washington donated their own money to the department’s funds.
Minting the First Coins
The Treasury created coins in denominations ranging from a half-cent (1/200 of a dollar) to an eagle (ten dollars). For perspective, one dollar would buy about a week’s worth of rent during this time period. Among the first coins produced by the Mint were the Chain Cent and the half-dime (or half-disme), which, according to legend, were produced from Martha Washington’s silverware collection. These old, rare coins are still sought after by coin buyers today. It was not uncommon for several years to go by without certain coins being minted at all.
U.S. Mint During the Civil War Era
The U.S. Mint expanded throughout the colonies during the 19th Century. Philadelphia was the only Mint to produce copper and silver coins, which benefited the Union prior to and during the Civil War. Mints in the South only produced gold coins, and the Confederate dollar experienced hyperinflation due to the lack of circulation of Philadelphia’s small-denomination coins. Leading up to the war, both the North and South began printing paper currency to substitute for the precious metals. The South already lacked the capacity to buy gold, and this hurt the Confederacy even more.
Western Expansion During the Gold Rush Era
The discovery of silver and gold in western states necessitated a mint to circulate currency and control the metals market in the West. The Carson City Mint in Nevada produced coins for a short time before it closed (coin dealers go crazy for those rare Carson City coins!), and the Denver Mint is still important to currency in the West today.
Addition of Bullion Depositories
As the U.S. Mint’s need for gold and silver to produce coins increased, the Treasury needed somewhere safe to secure the bullion (bulk gold or silver). The Mint opened the Fort Knox Bullion Depository in Kentucky in 1936, and the facility began receiving gold a year later. Soon after, the West Point Bullion Depository opened for silver bullion storage, and it operated in this capacity until in 1973, when it began producing pennies. Today, it has official status as a branch of the U.S. Mint, joining the locations in Denver, Philadelphia, and San Francisco. The United States Bullion Depository in Fort Knox still operates today.
The coin dealers at Atlanta Gold & Coin Buyers are fascinated with every aspect of U.S. currency, and we’d love to help you learn more about the history of your coins. Call us today at 404-236-9744 to schedule an evaluation of your collection!