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The Coinage Act of 1792 (also known as the Mint Act; officially: ''An act establishing a mint, and regulating the Coins of the United States''), passed by the
United States Congress The United States Congress is the legislature of the federal government of the United States. It is bicameral, composed of a lower body, the House of Representatives, and an upper body, the Senate. It meets in the U.S. Capitol in Washing ...
on April 2, 1792, created the
United States dollar The United States dollar ( symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the officia ...
as the country's standard unit of money, established the
United States Mint The United States Mint is a bureau of the Department of the Treasury responsible for producing coinage for the United States to conduct its trade and commerce, as well as controlling the movement of bullion. It does not produce paper money; tha ...
, and regulated the coinage of the United States. This act established the silver dollar as the unit of money in the United States, declared it to be lawful tender, and created a
decimal The decimal numeral system (also called the base-ten positional numeral system and denary or decanary) is the standard system for denoting integer and non-integer numbers. It is the extension to non-integer numbers of the Hindu–Arabic numeral ...
system for U.S. currency. By the Act, the Mint was to be situated at the
seat of government The seat of government is (as defined by ''Brewer's Politics'') "the building, complex of buildings or the city from which a government exercises its authority". In most countries, the nation’s capital is also seat of its government, thus that ...
of the United States. The five original officers of the U.S. Mint were a Director, an Assayer, a Chief Coiner, an Engraver, and a
Treasurer A treasurer is the person responsible for running the treasury of an organization. The significant core functions of a corporate treasurer include cash and liquidity management, risk management, and corporate finance. Government The treasury o ...
(not the same as the
Secretary of the Treasury The United States secretary of the treasury is the head of the United States Department of the Treasury, and is the chief financial officer of the federal government of the United States. The secretary of the treasury serves as the principal a ...
). The Act allowed that one person could perform the functions of Chief Coiner and Engraver. The Assayer, Chief Coiner and Treasurer were required to post a $10,000
bond Bond or bonds may refer to: Common meanings * Bond (finance), a type of debt security * Bail bond, a commercial third-party guarantor of surety bonds in the United States * Chemical bond, the attraction of atoms, ions or molecules to form chemica ...
with the Secretary of the Treasury. The Act pegged the newly created United States dollar to the value of the widely used Spanish silver dollar, saying it was to have "the value of a Spanish milled dollar as the same is now current".


History

Although some of the provisions in the 1792 Coinage Act were adjusted as time went by, the majority of the rules specified in this Act remained in effect for decades. Essentially, it provided the framework for all subsequent coinage design and production. The Act called for an image emblematic of liberty as well as the word "liberty", and the year of the coinage. It further declared that on the reverse of each gold and silver coin there would also be the representation of an eagle, with the inscription, "UNITED STATES OF AMERICA". On the reverse of the copper coins, there express the denomination of the coin as one-cent or half-cent. The Act specified the issuing of three gold coins comprising a $10 gold coin called an "eagle", a $5 coin called a "half eagle", and a $2.5 coin called a "quarter eagle". The Act also authorized construction of a mint building in Philadelphia, the nation's capital at the time. This was the first federal building erected under the
United States Constitution The Constitution of the United States is the Supremacy Clause, supreme law of the United States, United States of America. It superseded the Articles of Confederation, the nation's first constitution, in 1789. Originally comprising seven ar ...
. Mint director
David Rittenhouse David Rittenhouse (April 8, 1732 – June 26, 1796) was an American astronomer, inventor, clockmaker, mathematician, surveyor, scientific instrument craftsman, and public official. Rittenhouse was a member of the American Philosophical Society ...
laid the building's
cornerstone The cornerstone (or foundation stone or setting stone) is the first stone set in the construction of a masonry foundation. All other stones will be set in reference to this stone, thus determining the position of the entire structure. Over time ...
on July 31. On May 8, 1792, ''An Act to Provide For a Copper Coinage'' was signed into law by President
George Washington George Washington (February 22, 1732, 1799) was an American military officer, statesman, and Founding Father who served as the first president of the United States from 1789 to 1797. Appointed by the Continental Congress as commander of th ...
. It followed the precedent of the Fugio cent of 1787 in establishing the copper cent, from which descends today's one-cent piece. The Act also stipulated that "the director of the mint... be authorized to contract for and purchase a quantity of copper, not exceeding one hundred and fifty tons... to be coined at the mint into cents and half-cents... and be paid into the treasury of the United States, thence to issue into circulation." Furthermore, it said that "no copper coins or pieces whatsoever except the said cents and half-cents, shall pass current as money, or shall be paid, or offered to be paid or received in payment for any debt, demand, claims, matter or thing whatsoever."


Effects

Merchants and bankers were reluctant to bring silver bullion to the Mint because of the disclosure of the illegal silver standard that was previously in effect. The silver coins produced in 1794 & 1795 honored the official overall weight of the coin (at 416 grains), but employed a 0.900 fine standard instead of the
Spanish dollar The Spanish dollar, also known as the piece of eight ( es, Real de a ocho, , , or ), is a silver coin of approximately diameter worth eight Spanish reales. It was minted in the Spanish Empire following a monetary reform in 1497 with content ...
0.8924 fine standard as prescribed in the Mint Act of April 2, 1792 (Heritage Coin Auction #390, Vol III, p. 117). Since the overall weight of the coin remained the same, but the purity was increased, each coin had an excess of precious metal content (416 * 0.9 = 374.4 grains; vs. 416 * 0.8924 = 371.2384 grains; thus: 374.4 - 371.2384 = +3.1616 grains); but since the value of the coin was determined by its face value, this excess precious metal was essentially wasted. The most immediate effect of this practice was that depositors ended up paying an additional 3.1616 grains (0.205 grams) of silver bullion (almost 1% extra; 3.1616 / 371.2384 = 0.8%) for every dollar they received (Taxay, 1966, p. 89). When this became widely known, bullion deposits brought to the mint declined significantly in 1796 and 1797.


Authorization and free coinage

The Act authorized production of the following coins: The coins were to contain the following markings: *One side was to have an impression emblematic of liberty, with the inscription "Liberty", and the year of the coinage. *The reverse side of each of the gold and silver coins was to have the figure or representation of an eagle with the inscription "UNITED STATES OF AMERICA". *The reverse of the copper coins was to have an inscription expressing the denomination. Images of Liberty would remain a standard part of US coinage through the 19th century and into the early 20th. While European coins typically included a portrait of the reigning monarch, the idea of depicting a real, as opposed to an allegorical, figure was considered unacceptable in the republican United States. The image of Liberty used on US coins generally reflected contemporary standards of female beauty, and was redesigned every few decades to reflect the changing times, although the Seated Liberty image which graced coins starting in 1837 would end up being used for over half a century. Not until the Lincoln cent, issued in 1909 to commemorate the centenary of President Lincoln's birth, would a real person be depicted on a US coin. The Act defined the proportional value of gold and silver as 15 units of pure silver to 1 unit of pure gold. Standard gold was defined as 11 parts pure gold to one part alloy composed of silver and copper. Standard silver was defined as 1485 parts pure silver to 179 parts copper alloy. The Act also specified the dollar as the "money of account" of the United States, and directed that all accounts of the federal government be kept in dollars, " dismes", cents, and " milles", a mille being one-tenth of a cent or one-thousandth of a dollar. The silver content of a dollar under this act was almost exactly equal to 1/5 of the silver content of the contemporary British
pound sterling Sterling (abbreviation: stg; Other spelling styles, such as STG and Stg, are also seen. ISO code: GBP) is the currency of the United Kingdom and nine of its associated territories. The pound ( sign: £) is the main unit of sterling, and t ...
, or 4 British shillings. Under Sec.14, any person could bring gold or silver bullion and have it coined for free or later for a small fee, exchange it immediately for an equivalent value of coin. The paragraph summary states: "Persons may bring gold and silver bullion, to be coined free of expense;"
Quality control Quality control (QC) is a process by which entities review the quality of all factors involved in production. ISO 9000 defines quality control as "a part of quality management focused on fulfilling quality requirements". This approach places ...
measures were implemented in that from each separate mass of gold or silver used to produce coins, three coins were set aside by the treasurer. Each year on the last Monday in July, under the inspection of the Chief Justice, the Secretary and Comptroller of the Treasury, the Secretary of State, and the
Attorney General In most common law jurisdictions, the attorney general or attorney-general (sometimes abbreviated AG or Atty.-Gen) is the main legal advisor to the government. The plural is attorneys general. In some jurisdictions, attorneys general also have exec ...
, the coins were to be assayed and if the coins did not meet established standards, the officers were disqualified from office. The meetings later became formalized as the
United States Assay Commission The United States Assay Commission was an agency of the United States government from 1792 to 1980. Its function was to supervise the annual testing of the gold, silver, and (in its final years) base metal coins produced by the United States Mint ...
, which continued meeting until it was disbanded in 1980. Section 19 of the Act established a penalty of death for debasing the gold or silver coins authorized by the Act, or embezzlement of the metals for those coins, by officers or employees of the mint; this section of the Act apparently remains in effect and would, in theory, continue to apply in the case of "any of the gold or silver coins which shall be struck or coined at the said mint". (At present the only gold or silver coins struck by the US mint are the
American Silver Eagle The American Silver Eagle is the official silver bullion coin of the United States. It was first released by the United States Mint on November 24, 1986. It is struck only in the one-troy ounce, which has a nominal face value of one dollar and ...
and the
American Gold Eagle The American Gold Eagle is an official gold bullion coin of the United States. Authorized under the Gold Bullion Coin Act of 1985, it was first released by the United States Mint in 1986. Because the term "eagle" also is the official United ...
coins, some
proof coinage Proof coinage refers to special early samples of a coin issue, historically made for checking the dies (as in demonstrating that something is true) and for archival purposes. Nowadays proofs are often struck in greater numbers specially for co ...
at the
San Francisco Mint The San Francisco Mint is a branch of the United States Mint. Opened in 1854 to serve the gold mines of the California Gold Rush, in twenty years its operations exceeded the capacity of the first building. It moved into a new one in 1874, now kno ...
, such as the silver US State Quarters, and much of the Commemorative coinage of the United States.) All other sections of the act have been superseded, as the
Coinage Act of 1834 The Coinage Act of 1834 was passed by the United States Congress on June 28, 1834. It raised the silver-to-gold weight ratio from its 1792 level of 15:1 (established by the Coinage Act of 1792) to 16:1 thus setting the mint price for silver at a le ...
changing the silver-to-gold weight ratio. Various acts have subsequently been passed affecting the amount and type of metal in U.S. coins, so today there is no legal definition of the term "dollar" to be found in any U.S. statute. Current statutes regulating coinage in the United States may be found in
Title 31 of the United States Code Title 31 of the United States Code outlines the role of the money and finance in the United States Code. Legislative history The title was codified September 13, 1982 as "Money and Finance", , . Contents The latest contents, as of on May 1 ...
.


See also

*
Coinage Act of 1834 The Coinage Act of 1834 was passed by the United States Congress on June 28, 1834. It raised the silver-to-gold weight ratio from its 1792 level of 15:1 (established by the Coinage Act of 1792) to 16:1 thus setting the mint price for silver at a le ...
*
Coinage Act of 1849 The Coinage Act of 1849 was an Act of the United States Congress passed during the California Gold Rush authorizing the Mint to produce two new gold coins in response to the increased gold supply: the small gold dollar and the large double eagle ...
*
Coinage Act of 1853 The Coinage Act of 185310 Stat. 160 was a piece of legislation passed by the United States Congress which lowered the silver content of the silver half dime, dime, quarter dollar, and half dollar, and authorized a three dollar gold piece. Althoug ...
*
Coinage Act of 1857 The Coinage Act of 1857 (Act of Feb. 21, 1857, Chap. 56, 34th Cong., Sess. III, 11 Stat. 163) was an act of the United States Congress which ended the status of foreign coins as legal tender, repealing all acts "authorizing the currency of foreig ...
*
Coinage Act of 1864 The Coinage Act of 1864 was a United States federal law passed on April 22, 1864, which changed the composition of the one-cent coin and authorized the minting of the two-cent coin. The Director of the U.S. Mint developed the designs for thes ...
*
Coinage Act of 1873 The Coinage Act of 1873 or Mint Act of 1873, was a general revision of laws relating to the Mint of the United States. By ending the right of holders of silver bullion to have it coined into standard silver dollars, while allowing holders of go ...
*
Coinage Act of 1965 The Coinage Act of 1965, , eliminated silver from the circulating United States dime (ten-cent piece) and quarter dollar coins. It also reduced the silver content of the half dollar from 90 percent to 40 percent; silver in the half dollar was s ...
*
Mill (currency) The mill (American English) or mil (Commonwealth English, except Canada) is a unit of currency (sometimes symbolized as ₥), used in several countries as one-thousandth of the base unit. In the United States, it is a notional unit equivalent to a ...


References


Further reading

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External links


Facsimile of the Coinage Act of 1792
in the Statutes at Large from the Library of Congress
Facsimile of the Act to provide for a Copper Coinage
in the Statutes at Large from the Library of Congress {{Money and central banking within the contemporary United States (pre–1913) 1792 in American law United States federal currency legislation United States Mint Presidency of George Washington 2nd United States Congress 1792 in economics