How the First American Coins Were Struck

We all know the phrase, "the almighty dollar." Today's American dollar is a reserve currency, prized and accepted throughout the realm of international trade. But the early beginnings of our money were rather dicey and at various times and regions, drilled shells, tokens issued by private merchants, pieces of eight, and even stamps have circulated as legal tender.

Until well into the 19^th century, in the American West, recently wrested from Mexico, pieces of eight were preferred since they could be carved into small change by cutting along the convenient markings provided by the Spanish Crown to make "bits" worth twelve and a half cents each.

The American Revolution had a lot to do with money--no one was making any. The British Crown vacuumed every spare farthing under an economic theory known as mercantilism. Colonies provided raw materials and mother country sold finished goods to the colonies at a profit. Only one problem: if wealth kept flowing from the colonies to mother, from where would come the funds to buy the goods? Smuggling and widespread tax evasion to the rescue!

After winning our independence from England, we were left with the same problem: no money, or at least no circulating coin. There were continentals as in: "not worth a continental." George Washington, in so many other things first, "first in war, first in peace, and first in the hearts of his countrymen," was also first to come across with the family silver. It was melted silverware from George Washington's own home that provided the basis for the first coin minted under the auspices of the newly formed American government, the half-disme of 1792. His melted cutlery was struck into samples of several denominations as a demonstration to the fledgling legislature, but the half-dismes of 1792 were released into circulation and used.

We owe many things to the British: our language, our culture, the place-names of many of our largest cities, but we owe our units of currency to the French and the first coins to the father of our country.

Although we stuck with the old British measures for length, weight and distance, and even today measure temperatures on the Fahrenheit scale, developed with English weather in mind, we adopted the newfangled metric system for our currency.

Although today's familiar five cent piece is a nickel, this coin did not appear until the devaluation of American coins caused by shortages during the American Civil War. The nickel remained because of its convenient size. The half-disme, the coin minted from Washington's silverware and in widespread circulation from 1794 to the Civil War was just too darned small.

During those days, the government tried to assure that each coin contained full value of metal. Melt it or spend it, it made no difference. The milled edges on modern coins were an early anti-counterfeiting device to assure that coins remained full weight and value.

Even half-pennies (never popular and intended to lower prices for the poor) and pennies were quite large to assure that a full measure of copper was contained in each. When the half-cents were eliminated and large cents downsized in 1856, their replacement small cents were initially made from "German Silver," a handsome, nickel-containing alloy that simultaneously assured the nervous public that the coins were worth their face value while providing plum patronage to powerful nickel mining interests. Later issues of cents to eliminated nickel, and eventually tin as well.

In our modern-day currency crisis and dollar devaluation one could long for the time when Washington coined hard currency and looted the family silver to do so.

Sources:
http://www.coins.nd.edu/ColCoin/ColCoinIntros/HalfDisme.intro.html
http://www.coinfacts.com/small_cents/small_cents.html