Coinage and the Unit of Money
Editorial Note

In late November Jefferson received newspapers from William Short that seemed to provide a means for opening up the subject of coinage with the Secretary of the Treasury, then engaged in preparing his report on the establishment of a mint.1 In the Gazette Nationale of 3 Aug. 1790 that Short had sent, he observed a report by Naurissat on billon which so impressed him that he made detailed notes of it.2 The printed text of the report he then dispatched to Hamilton with an open hint of his willingness to make further exchanges of information.3 The subject was one in which he had long been interested and it was closely connected with his hope for the establishment of a symmetrical system of weights, measures, and money based on an invariable standard, about which he would soon make a supplementary report to Congress.4

Jefferson’s approach to Hamilton in an effort to reach an accommodation in advance of legislation on the mint is revealing. In 1784 he had consulted Robert Morris before drafting his own propositions on coinage. This, like the overture to Hamilton, was perhaps primarily to neutralize political opposition, for Jefferson was well aware of the obstacles to innovation that existed in the circles of finance and commerce. His own plans for an American currency had been developing at least since 1776 when he first proposed the decimalized dollar.5 Robert Morris thought decimal reckoning desirable, though not necessary, and he made his proposed unit of money the common denominator of the thirteen currencies already in existence. This half-measure born of conservatism was so impractical that the price of a horse would have required “a notation of 6 figures…115,200” and the public debt of 80 millions would have been expressed as 115,200,000,000.6 Also, Jefferson could not have been unaware of the persistent interest in contract coinage, despite the fiasco of the copper coinage of 1787 with its speculative intrigues involving William Duer, Royal Flint, and others.7 Viewing coinage as an attribute of sovereignty, he hoped to make the unit of money integral with a decimalized system of weights and measures that would be uniquely American in its simplicity, convenience, and adaptability to general usage among nations. Six months earlier he had sent Hamilton a copy of his report on weights and measures in the hope that he would agree to the suggested alteration in the money unit. Hamilton was not then opposed and indeed expressed himself as favorable to the idea of a “general standard among nations.”8

Now Jefferson renewed his approach, prompted no doubt by the fear that Hamilton’s opinion had changed and that the forthcoming report on the mint would be more derivative than innovative. The recently-received report from France recommending billon could have been only an excuse for making the overture, for Jefferson himself had already urged the convenience of billon in his report on copper coinage. His more recent report on weights and measures had recognized the value of the money unit as established by Congress in 1786 at 375.64 grains of pure silver, but he had proposed a “very minute alteration” that would increase its weight a third of a grain in order to link the currency with his system of weights and measures.9 This time Hamilton evidently did not respond to the appeal for “unreserved communications” and sent Jefferson a copy of his report only after it had been completed and sent to the House of Representatives.

Jefferson affected to have gained “a great deal of satisfaction” from reading it.10 This no doubt was true with respect to the retention of the dollar as the money unit, the decimal reckoning, the bi-metallic standard, and the ratio between gold and silver. But in fractional currency Hamilton provided nothing between the dollar and the tenth of a dollar, which would have been awkward in practice. He rejected the idea of billon and his copper cent—a cumbersome coin weighing two-thirds as much as the dollar—was inconvenient. His smaller copper coin did not adhere to decimal notation but was equated with the English farthing. These and other derivative features could have given Jefferson little satisfaction. But on the devaluation of the dollar from 375.64 to 371.25 grains of silver, his disagreement with the report, though candidly stated, was more fundamental than his polite response to Hamilton indicated. He was as aware as Hamilton of the truism in James Steuart’s Principles of political economy that “every variation…upon the intrinsic value of the money-unit, has the effect of benefiting the class of creditors, at the expence of the debtors, or vice versa.”11 But this drastic departure from the value already fixed by Congress would not only affect the discharge of the national debt and therefore involve the national honor: it would also collide with Jefferson’s dream of a unified system of weights, measures, and coins. Later, after Jefferson had unpacked his Encyclopédie and had gained more accurate information about the value of the Spanish dollar at various periods, he thought that Hamilton’s proposition to draw “5 cents out of every dollar” was really equated with the depreciated Spanish dollar of 1772, having 370.95548 grains of silver as compared with its former value of 376.72824 grains. Since he believed this depreciated dollar could not have circulated in America during the Revolution sufficiently to have caused it to be taken as a standard, Jefferson concluded that the American debt was contracted when the dollar was at the higher valuation before 1772.12 The premise was arguable, but the conclusion testified both to his regard for the public faith and to his wish to keep the currency integrated with his proposed system of weights and measures.

Hamilton, as Jefferson knew, had arrived at his valuation of 371.25 grains by a reliance on the crude methods of assaying prevalent in the United States at the time.13 In an attempt to verify the result of 371 grains shown by the assay, Hamilton emulated the practice of American merchants in paying in fine gold for the actual weight of dollars in circulation. This figure—24.75 grains of fine gold per dollar—at a ratio of 15 to 1 provided his valuation of 371.25 grains, whereas the minted weight of the Spanish dollar was nearer to the value established by Congress in 1786 than to that of the assay.14 Hamilton conceded in his report that Jefferson’s “small alteration” in the value of the dollar to link it with a uniform system of weights, measures, and coins might be desirable. But he thought it certainly not advisable to do so by “so considerable a change in the money unit, as would be produced by the addition of five grains of silver to the proper weight of the dollar.”15 The crude methods of assaying and the fundamental error of basing “the fine weight of the new American dollar on that of a worn Spanish one” left him in no doubt as to what the proper weight was.16 Jefferson’s argument, of course, rested on the same faulty foundation of the dollar as valued in general usage. But rather than sacrifice the idea of a uniform national system of weights, measures, and coins he was willing, if necessary, to give up the dollar as the unit of money and to adopt instead either an ounce of pure silver or an ounce of standard silver.17 Neither Hamilton nor the Congress was ready for such an innovation.

When the House sent Hamilton’s report to the Senate on 7 Feb. 1791, it was referred to a committee composed of Morris, Izard, Monroe, and Schuyler. Morris did not report until the hectic hours at the close of the session.18 “The resolution of the Mint,” wrote Maclay, “was foully smuggled through‥‥The plea of want of time prevails, and every one that attempts to speak is silenced with the cry of question and a mere insurrection of the members in support of the demand.”19 Maclay was certain that a resolution was brought forward because unanimous consent was required for reading bills out of order. He hoped the House would raise the questions he was unable to debate in the Senate. Even at this late hour in the session serious opposition did arise in the House. The resolution was adopted, though by the very small majority of 25 to 21. The roll call vote revealed the familiar partisan and sectional alignments.20

Jefferson’s report on weights and measures was taken up by the House in December and transmitted to the Senate. In January he sent to both houses the addendum and correction to his report.21 He was evidently so sanguine about legislative action that he explored with David Rittenhouse the question of how to preserve the standard of measure. Rittenhouse was very dubious about the possibility of protecting and using a standard of any given length. None, he pointed out to Jefferson, had been preserved from ancient times nor could the United States “transmit them to posterity with sufficient authenticity, or to different Countries for general use.”22 The doubts may not have been resolved, but Rittenhouse as usual cooperated with Jefferson by pointing out that the cellars of the American Philosophical Society might be used for “the purpose of which we are speaking.”23 The purpose Jefferson had in mind was clearly to preserve and protect the standard of measure against changes in temperature. The standard he later described as “an uniform cylindrical rod of iron, of such length as, in latitude 45.° in the level of the ocean, and in a cellar or other place of uniform natural temperature, shall perform it’s vibrations … in one second of mean time.”24

But the explorations were premature and the cellars of the Society were soon rented by John Vaughan for the storage of wine.25 No action was taken on Jefferson’s report at this session and the resolution on the interconnected problem of the mint only authorized the President to procure such artisans and apparatus as would be needed. This responsibility Washington delegated to the Secretary of State and Jefferson continued his efforts to bring Droz to America.26 The issue would be joined in the next session over the bill to establish regulations governing the mint. When the time came, Jefferson was ready with still another proposal to accommodate the unit of money to his integrated system of weights and measures. But the Federalists of the Senate debased the dollar even more than the Secretary of the Treasury had proposed.