VII. Propositions Respecting the Coinage of Gold, Silver, and Copper
[13 May 1785]
First. The value of silver compared with gold. Second. The weight or size of the several pieces of money that are to be made. Third. The money arithmetic, or the mode in which it is to be counted; and fourth, The charges of coinage are to be considered.
1. In France, 1 grain of pure gold is counted worth 15 grains of silver. In Spain, 16 grains of silver are exchanged for 1 of gold, and in England 15⅕ In both of the kingdoms last mentioned, gold is the prevailing money; because silver is undervalued. In France silver prevails. Sundry advantages would arise to us from a system by which silver might become the prevailing money. This would operate as a bounty to draw it from our neighbours, by whom it is not sufficiently esteemed. Silver is not exported so easily as gold, and it is a more useful metal.
Certainly our exchange should not be more than 15 grains of silver for one of gold. It has been alledged by the late financier, that we should not give more than 14 ½; perhaps 14 ¾ would be a better medium, considering the quantity of gold that may be expected from Portugal.
2. The weight, size or value of the several pieces of money that shall be made, or rather the most convenient value of the money unit, is a question not easily determined, considering that most of the citizens of the United States, are accustomed to count in pounds, shillings and pence; and that those sums are of different values in the different states: hence they convey no distinct ideas. The money of the United States should be equally fitted to all. The late financier has proposed to make gold and silver pieces of particular weight; and there is a very simple process, by which the imaginary money of the several states may be translated into such pieces, or vice versa. He proposes that the money unit be one quarter of a grain of pure silver. That the smallest coin be of copper, which shall be worth 5 of those units. The smallest silver coin to be worth 100 units; another to be worth 500; another of 1000; and thus increasing decimally.
The objections to this plan are, that it introduces a coin unlike in value to any thing now in use. It departs from the national mode of keeping accounts, and tends to preserve inconvenient prejudices. Whence it must prevent national uniformity in accounts; a thing greatly to be desired.
Another plan has been offered, which proposes, that the money unit be one dollar;1 and the smallest coin is to be of copper, of which 200 shall pass for one dollar. This plan also proposes, that the several pieces shall increase in a decimal ratio;2 and that all accounts be kept in decimals, which is certainly by much the most short and simple mode.
In favour of this plan it is urged, that a dollar, the proposed unit, has long been in general use. Its value is familiar. This accords with the national mode of keeping accounts, and may in time produce the happy effect of uniformity in counting money throughout the union.
3. The money arithmetic, though an important question, is one that can admit of little dispute. All accomptants must prefer decimals.
4. What is the best mode of defraying the expence of coinage? Different nations have adopted different systems. The British value their silver when coined, no higher than bullion. Hence it follows, that the expence of the mint, increasing the civil list, must be paid by a general tax; and tradesmen are disposed to work up the current coin, by which the tax is increased and continued. In some other countries silver or gold when coined, are valued above the price of bullion; whence tradesmen are discouraged from melting or working up the current coin, and the mint is rather profitable than burdensome. Certainly there are good and conclusive reasons, why we should value the national coin above the price of bullion; but there is a certain point beyond which we may not proceed, lest we encourage counterfeits, or private imitations of our coin. It has been proposed to make a difference of 2 ½ per cent. nearly, as an allowance for the coinage of gold, and of 3.013 per cent. for the coinage of silver. It is probable that 3 per cent. would more than defray the expence of coining silver, in which case it would be a temptation to private imitation, and would operate against the free circulation of the money, as being valued too high. It is to be remembered that silver coin ought to be encouraged, and probably 2 per cent. or 2 ¼ per cent. would be a proper difference between silver coined and bullion. The same difference to be made in the price of gold. If this does not fully pay the expences of the mint, there will be a much larger gain on the coinage of copper; and if there should remain a small balance against the mint, its operation will not be unfavourable.
The coinage of copper is a subject that claims our immediate attention. From the small value of the several pieces of copper coin, this medium of exchange has been too much neglected. The more valuable metals are daily giving place to base British half-pence, and no means are used to prevent the fraud. This disease, which is neglected in the beginning, because it appears trifling, may finally prove very destructive to commerce. It is admitted that copper may at this instant be purchased in America at ⅛ of a dollar the pound. British halfpence made at the tower are 48 to the pound. Those manufactured at Birmingham, and shipped in thousands for our use, are much lighter, and they are of base metal. It can hardly be said that 72 of them are worth a pound of copper. Hence it will follow, that we give for British halfpence, about six times their value. There are no materials from which we can estimate the weight of halfpence that have been imported from Britain since the late war. But we have heard of sundry shipments being ordered, to the nominal amount of 1000 guineas; and we are told, that no packet arrives from England, without some hundred weight of base halfpence. It is a very moderate computation which states our loss on the last twelve months, at 30,000 dollars, by the commerce of vile coin. The whole expence of a mint would not have amounted to half of that sum, and the whole expence of domestic coinage would remain in the country.
The following forms of money are submitted.
|1 piece of gold of||5|
|1 piece of silver of||1||containing 362 grains pure silver. This is the unit or money of account.|
|1 ditto,||½ or .5|
|1 ditto,||¼ or .25|
|1 ditto,||1/10 or .1|
|1 ditto,||1/20 or .05|
|1 piece of copper of||1/100 or .01|
|1 ditto,||1/200 or .005|
The quantity of pure silver being fixed that is to be in the unit or dollar, and the relation between silver and gold being fixed, all the other weights must follow.
When it is considered, that the Spaniards have been reducing the weight of their dollars, and that instead of 385.5 the grains of pure silver in the old Mexican dollar, the new dollars have not more than 365 grains, it will hardly be thought that 362 grains of pure silver is too little for the federal coin, which is to be current in all payments for one dollar. Some of the old dollars will admit of a second coinage; but the new ones will not. If the value of gold compared to that of silver, be fixed at 15 to one, and the alloy in each be 1/12, the weight of the several denominations will be readily determined.
The price of bullion is immediately determined by the percentage that is charged towards the expences of the mint.
If the United States determine to adhere to the dollar as their money of account, and to simplify accounts by the use of decimals, there is nothing to prevent the immediate commencement of a coinage of copper.
Let the copper pieces, of which 100 are to pass for a dollar, contain each 131 grains of pure copper, or 44 of them weigh one pound. In this case our copper coin, when compared with the money of account, will be 6 per cent. better than that of Great-Britain. There will remain a sufficient profit on the coinage.
Copper of the best quality in plates, may be purchased in Europe at 10d. ½ sterling. In cutting blanks there will be a waste of 22 per cent. Those clippings are worth 7d. ½ per pound. Thence the blanks will cost 11d. ½ nearly; it may be stated at 1s.9d. New-York money per pound, exclusive of the expence of cutting them, which is not great, as one man can readily cut 100 weight in a day.
The operation, improperly called milling, by which the sharp edges are worn off from the coppers, is not more expensive than cutting the blanks.
In the process of coining copper, eight artists or labourers may be required.
One engraver, 1 labourer for the blank press.
One smith, 5 labourers for the coining press.
By those people 100 weight of copper may readily be coined every day, or the value of 44 dollars. Deducting the necessary expences, there may be saved 30 per cent‥‥3
If one member of Congress from Georgia, another from Massachusetts, a third from Pennsylvania, and a fourth from North-Carolina, were a committee to decide on the general currency of America, each would prefer that of his own particular state. If a fifth member were added from South-Carolina, he (not being particularly attached to the new adopted sterling of that country) might wish for an expedient to reconcile the litigants. He would therefore seek a currency which though different from either, would coincide with all. The present currencies are in the following proportions to each other.
As 1/60 to 1/72 to 1/90 to 1/96 of a dollar; that is as 24 to 20 to 16 to 15.
|Suppose then we take the following currency||C.|
|1 crown, or 10 dollars,||1.0000|
|1 dollar, or 10 bits,||1000|
|1 bit, or 10 pence,||100|
|1 penny, or 10 grs.||10|
|1 gr. (i.e.) a quarter of a grain of fine silver||1|
This currency may (by means of a small profit taken to defray the expence of coining) be so adjusted, as to be in the proportions above mentioned: and then
|The penny of Georgia will be||24 grs.|
|of Virginia and the four eastern states,||20|
| of Maryland, Delaware, Pennsylvania and
|of North-Carolina and New-York,||15|
To accomplish this matter,
- Let the crown be made of gold, 22 carrats fine, and weight 188 grains.
- Let the dollar be made of silver, and contain 250 grains pure, and 10 of alloy, 260 grains.
Let the mint give for every pound of standard gold, brought in for sale 29.9000. for every pound of pure silver, 2.2340
On this state of things let it be asked, 1st. What is the coinage or profit on coining? and 2dly, What is the proportion resulting from thence between the precious metals? To answer the first, say, As 188 grains of standard gold, the proposed weight of a crown, to 1.0000 the proposed value; so is 5760 grains, the quantity in a pound, to 30.6383, the value when coined—And as 29.9000 the mint price, to 30.6383; so is 100, to 102.47, nearly. The coinage of gold therefore will be about 2 47/100 per cent. Say again, as 2.2340 the mint price of fine silver, to 2.3040, the value of 5760 grains, at 4 grs. each; so is 100 to 103.13, nearly. The coinage of silver therefore will be about 3 13/100 per cent. These per centages will about defray the expences of the mint. And note here, that since the expence must be paid, no tax for the purpose can be more equitable than one which is raised on the money itself.
To answer the second question, since a pound of gold at 22 carrats, contains 5280 grains of pure metal, and this is worth as above, 30.6383 quarters of a grain of fine silver, say, as 21120 grs. of fine gold, to 30.6383 grs. of fine silver; so is one of fine gold, to 14 10703/21120 of fine silver, being somewhat more than 14 ½ of silver for 1 of gold.
It remains next to see what are the values of this money, but a previous observation must be made, viz. That by the currency of clipt gold, the value of American money has been considerably depreciated. Thus the par between sterling and Pennsylvania currency was 166 ⅛ currency for 100 sterling. But 3 dwt. of gold are current for 20s. A pound of gold is therefore equal to L.80 currency; and two pounds or 89 guineas, to L.160. Therefore L.93: 9:0 sterling, equals L.160 Pennsylvania currency. And as L.93: 9:0 is to L.160; so is L.100 to L.171:4:3 ½ the present par, instead of L.166:13:4, the former par.
To return then to the value of the money proposed. A guinea ought to contain 129½ grains; therefore say, as 5760 grains, or 1 lb. of gold, to 29.9000 the mint price; so is 129½ to 6722, which divided by 16 to reduce it to Pennsylvania currency, gives 420⅓. or 35s. The French crown ought to contain 412½ grains pure silver; therefore say, as 5760 grains, to 2.2340 the mint price; so is 412½ grains, to 1600, or 8s. 4d. Pennsylvania currency. Lastly, the dollar contains about 372 grains of fine silver; but there is much difference between the old and new dollars: say then, as 5760 is to 2.2340; so is 372 to 1442, or 7s. 6d.⅛ Pennsylvania currency. The value of the dollar, therefore, may be stated at 1440; and this divided by the proportional numbers before mentioned, gives the different values. Thus
|Divided||by 24, it gives the value in Georgia,||60 pence.|
|by 20, that of Virginia and the four eastern
|by 16, that of Pennsylvania, Maryland,
Delaware and New-Jersey,
|by 15, that of North-Carolina and New-York,||96|
And the same thing will appear from a similar operation upon the value of a guinea or French crown as above specified. Hence results a corollary of some importance towards simplifying the complex subject of money, viz. That in the proposed currency, a quarter of a grain of pure silver (the smallest fractional part) would serve as a common expression or denominator, to all the different currencies now in use; and any sum on a merchant’s books might be reduced to that expression with ease and exactness. Suppose for instance L.151:13:4.
|This sum would||in Georgia be expressed by||87||36|
|in Virginia and the four eastern states||72||8|
|in Maryland, Pennsylvania, Delaware
|in North-Carolina and New-York,||54||6|
So far we have rather had in contemplation the money of account. Let us now proceed to the coins. These may be as follows.
|C.||Penns. cur.||Virg. cur.|
|Of gold||1||weighing||188||grs.||Expression||1.0000||value||L. 2 12 1||—||L. 2 1 8|
|1||—||94||—||—||.5000||—||1 6 0 ½||—||1 0 10|
|Of silver||1||—||260||—||—||.1000||—||0 5 2 ½||—||0 4 2|
|1||—||104||—||—||400||—||0 2 1||—||0 1 8|
|1||—||52||—||—||200||—||0 1 0 ½||—||0 0 10|
|1||—||26||—||—||100||—||0 0 6 ¼||—||0 0 5|
|Of copper||1||—||—||—||—||5||—||– – –||—||0 0 0¼|
|1||—||—||—||—||4||—||0 0 0 ¼||—||– – –|
Hence it appears that these coins would agree with the currency of nine states out of the thirteen, with like precision as the money of account represented, would agree with them all.
Let us next examine the state of exchanges which would result from the adoption of such a plan. And here we should confine our view to those three countries with whom we have exchange-dealings, viz. England, France and Holland. As to Spain and Portugal, we barter our produce for theirs, among the articles of which are silver and gold. It has already been noted, that 2 lb. of standard gold, are 89 guineas, or 1,869 shillings; and that 1 lb, of the coined gold is 30.6383, consequently 2 lb. are 61.2766: Therefore say, as 1869, is to 6 1.2766; so is 20 to 6556, the value of a pound sterling. It has also been mentioned, that the French crown or 6 livres, contains 412½’s grains of pure silver, that is 1650 grs. Therefore say, as 6 is to 1650; so is 1 to 276, the value of a livre. The exchanges with Holland are taken upon the bank florin, which is merely a money of account, and the current money varies from it at the rate of from 2 to 5 per cent. advance. The bank guilder or florin, must therefore be taken at a medium value, and will be found worth 600. On these values we shall find the following par-exchanges among those countries, viz.
|F. st. g.||Liv. s. d.|
|L.||1||sterling,||or||.6556||equal||to about||10 10 8||and||about||23 16 10|
|F.||1||—||—||. 600||—||sterling||L.||0 1 10||—||—||2 3 8|
|F. s. g.|
|Liv.||1||—||—||. 275||—||—||0 0 10 1/15||—||—||0 9 2⅔|
The advantages of coining money in this country are, first, those which arise from the same operation in all other countries; and secondly, that of reducing all our currencies to one. The advantages from the coin here proposed are, first, that none other will effect the object already mentioned of banishing other currencies, because that alone applies without fractions to them all. Secondly, that the minuteness of its lowest denomination would render it an accurate measure of the smallest variations of quantity or quality in any commodity. Thirdly, that the decimal proportion of its parts would render all calculations in it easy, as appears in the calculations and consequent rates of exchange above mentioned: And lastly, that few figures would be used for the largest sum, while at the same time the smallest sums would be comprehended. For if the lowest denomination be of considerable value, recourse must be had to fractions, as in England, where the penny is divided into fourths, eights, and sometimes sixteenths, and even then without sufficient accuracy; whereas the lowest denomination of the coin here proposed will be about ½7 of a penny sterling.
Lastly, as to the names above chosen, they, like all other names, are arbitrary, and better may perhaps be substituted. The word crown occurred from the following idea of an impression for the gold coin—An Indian, his right foot on a crown, a bow in his left-hand, in his right-hand thirteen arrows; and the inscription Manus inimica Tyrannis‥‥4
Text from the copy of Propositions respecting the Coinage of Gold, Silver, and Copper in DNA: PCC, No. 26, p. 545–56; endorsed by Thomson on p. 12: “Report of Grand Comee Viz Mr [David] Howell Mr [Abiel] Foster Mr [Rufus] King Mr [Joseph Platt] Cook Mr [Melancton] Smith Mr [John] Beatty Mr [Joseph] Gardner Mr [John] Vining Mr [William] Hindman Mr [James] Monroe Mr [Hugh] Williamson Mr [Charles] Pinckney Mr [William] Houstoun. On Money Mint. Postponed. [In another hand and perhaps as late as 1790:] Mint established on principles reported by the board of treasury & passed—Augt. 8th. 1786.”
One hundred copies of this pamphlet were printed by John Dunlap on 2 June 1785 (JCC description begins Journals of the Continental Congress, 1774–1789, ed. W. C. Ford and others, Washington, 1904–1937 description ends , xxix, 922). The copy in DNA: PCC was employed by Thomson on 6 July 1785 in recording the pivotal decision of that day (see notes 1 and 2 below).
1. Preceding seven words enclosed by drawn lines and the word “agreed” interlined above; this recorded the first of the votes of 6 July 1785 (JCC description begins Journals of the Continental Congress, 1774–1789, ed. W. C. Ford and others, Washington, 1904–1937 description ends , xix, 499–500).
2. The words “and the smallest coin is to be of copper, of which 200 shall pass for one dollar” and the words “that the several pieces shall increase in a decimal ratio” are similarly enclosed and the word “agreed” written in margin (same).
3. To this point Propositions is a printing of the report of the Grand Committee of 13 May 1785, bearing the same title. That report, as printed from the MS in DNA: PCC, No. 26, p. 537–42, is in JCC description begins Journals of the Continental Congress, 1774–1789, ed. W. C. Ford and others, Washington, 1904–1937 description ends , xxviii, 354–8, and contains a deleted paragraph concerning the names of the copper coin: “It is not of any importance by what Name our Copper Coin is distinguished, but it should have some Name. They are not to be Pence nor half Pence and though they might be of the same Value we should not have such Words in our Language as applicable to our own Money. The French have their Sous and the Dutch their Doits and Stivers; perhaps from the circumstance of our Coin being numbered by Decimals we might call some Piece of Money a Decad let it be the largest Copper. Device and Inscription for one Side.” The device and inscription, showing thirteen stars surrounded by a serrated border and “confederatio 1785,” is reproduced in facsimile in JCC description begins Journals of the Continental Congress, 1774–1789, ed. W. C. Ford and others, Washington, 1904–1937 description ends , xxviii, 358 (for a discussion of the names of the coins, see Neil Carothers, Fractional Money, N.Y., 1930, p. 53–4). Whether this paragraph was deleted by Williamson or by the Grand Committee or by Congress cannot be determined, but it was very likely done in committee.
Following this point in Propositions is the letter from Robert Morris of 15 Jan. 1782, here omitted; it occupies pages 3–6 of the pamphlet.
4. Pages 7–8 of the pamphlet though given no caption to distinguish them from the Grand Committee’s “Propositions” and Morris’ letter that precede them, are printed from the MS in the hand of Gouverneur Morris in DNA: PCC, No. 26, p. 557. The text of TJ’s “Notes” follows this point and occupies pages 9–12 of the pamphlet (here omitted). The caption at top of p. 9 reads: “Notes on the Establishment of a Money Mint, and of a Coinage for the United States. By Mr. Jefferson.” An asterisk placed above the words “Money Mint” is keyed to the following words in the margin: “In the MS. Copy by Chas. Thompson. Vol. No.”; this notation was probably made at the time that the Papers of the Continental Congress were being searched for S. Dana Horton, secretary of the American delegation to the International Monetary Conference of 1878, for Horton assumed erroneously that the text in Propositions was taken from Thomson’s copy of TJ’s Notes (International Monetary Conference of 1878, Sen. Ex. Doc. No. 58, 45th. Cong., 3d. sess., p. 437). As shown in notes to Document iv of the present series, the text of TJ’s “Notes” printed in Propositions was taken from The Providence Gazette and Country Journal for 24 July 1784.