Thoughts on the Establishment of a Mint in the United States
Philip Foner's introduction:
Paine enclosed his plan for the establishment of a mint in the United States in a letter he sent to Thomas Jefferson from London, September 28, 1790 (see below pp. 1314-1315), and Jefferson was so impressed by these suggestions that he turned over Paine's manuscripts to Philip Freneau who published the essay in the National Gazette of November 17, 1791. It has never before been reprinted.
THE price of machinery and the expense of labor are reserved to the conclusion. I proceed therefore to consider the Metals and the means of procuring them.
I begin with Copper. This Metal is of too little value and of too much bulk, to answer the purposes of coin to any great extent: About ten or twenty thousand dollars worth of copper coin is, I believe, as much as can be circulated in America.
Copper may be had in America, cheaper than in any other part of the world, and in greater quantities than are necessary for coining. This copper comes from the West-Indies, it is the old boiler stills, and other utensils which being worn out, the Planters have no use for the old copper. They have not, as I am informed, the means of melting it up, or do not give themselves the trouble to do it, besides which there is a duty of 3d sterling per lb. on landing it in England.
Considerable quantities of this copper have, since the war, been brought in New York, for 6d. per lb. York currency; but supposing ten pounds of it be bought for one dollar, it will consequently follow that ten pound weight of copper is only equal to about one ounce weight of silver; if therefore one dollar worth of copper was to be divided into a hundred parts or cents, each cent would be above the weight and size of a silver dollar. Two opposite difficulties, therefore, present themselves with respect to a copper coinage; the one is, that to give the coins, or cents, the intrinsic value they ought to have by weight, they will be too heavy and bulky for use they are intended for; the other is, that to make them light enough to be convenient, they will not have intrinsic value enough to pass, any more than half dollars would pass for dollars.
The proportionate or relative value of silver to gold, is about 16 to
one; that is, 16 ounces of silver is about the value of one ounce of gold, but the relative value of copper to silver, is from 120 to 140 to 1, which makes them too remote to represent each other in the shape of coin convenient for the pocket. Nobody would think of carrying brass pound weights about him for coin, yet he must carry copper in that proportion.
The metal convenient for a coin under the silver coin, should not differ
more in its value from silver than silver does from gold-and if it differed still less it would be better: but as the relative values now stand, the difference increases where convenience requires it should decrease. But as no such a metal, which convenience requires, exists naturally, the question is whether it will answer to produce it by composition.
Of compositions, three methods present themselves-1st. Mixing silver and
copper in fusion-2d. Plating the copper with silver-3d. Plugging the copper with silver. But against all these there are very capital objections. Wherever there is a want of satisfaction there must necessarily be a want of confidence; and this must always take place in all compounded metals. There is also a decrease in the intrinsic value of metals when compounded; one shilling worth of silver compounded with one shilling worth of copper, the composition is not worth two shillings, or what the metals were worth before they were compounded, because they must again be separated to acquire their utmost value, and this only can be done at a refiner's. It is not what the coin cost to make, but what the coin is intrinsically worth when made; that only can give it currency in all cases. Plugging copper with silver is the least detrimental to the intrinsic value of the metals, because they are the easiest separated; but in all these cases the value of the silver put into the composition will be so predominant to the value of the copper, that it will be rather a base silver coin than a copper coin.
As therefore copper presents so many inconveniences arising from its
great bulk and little value, and so small an object for establishing a mint (for people have learned the value of copper coin too well to take it as they formerly did) all the calculations for a mint must be made upon silver and gold, and whatever may [be] done in copper to be considered only as incidental.
It is I think pretty evident that copper has become a coin not from the want or scarcity of silver (because the value of all the copper coin in any nation is but a trifle, and never considered in the estimation of national property), but because silver does not admit of being divided and sub-divided down into such small pieces as to contain only the value of a copper or a cent. It is this only which has induced a recourse to copper.
In England, the lowest silver coin is six-pence, which is equal to twelve coppers, and therefore the resource to coppers for-change, or for the purchase of small articles under the value of six-pence is frequently recurring; but if in America we were to coin silver as low as the twentieth part of a dollar, which would be pieces of five cents, the occasion for coppers would be very much diminished, and such pieces would be nearly of the size of the French silver six sous. I think the policy is in favor of keeping as much silver coin as we can in the country; and this is one of my motives for excluding copper as much as possible.
Some denomination under the five cent pieces would still be necessary-but as the occasions would be diminished, a small quantity would be sufficient. It is convenience only that ought to be considered with respect to copper coinage, and not money or riches. It was going on this last idea instead of the first one that entangled the former Congress and the several States. They attempted to do what no other nation ever thought of doing, and which is impossible to do-that of exalting copper into national wealth. Nature has fixed its boundary and we must keep to it.
It is therefore something by which to divide the five cent silver pieces, that appears to me the only thing to be considered with respect to a copper coinage. This may be done either by coining copper cents of the size and intrinsic value they ought to be, which will prevent their being counterfeited, or depreciated, or to coin or stamp small copper pieces, as a sort of treasury notes, or notes of the mint, of the nominal value of one, two, and three cents, to be exchanged, if any person chooses to exchange them, at the treasury or the mint for silver. These will be more durable than paper tickets, and capable of being extended over the continent without the danger of wearing out; and people will not compare the value of them by the metal they contain, but by the obligation to exchange them for silver if required. To prevent their being counterfeited they should not be a tender for any thing above-five cents, or more than five in any one payment; as they would be merely for the purpose of dividing the silver cents by, and not for the purpose of supplying the place of silver coin in large quantities, but the mint or the treasury should always exchange them to any amount, though the amount can never be much at any one time.
To give these notes the opportunity of getting into circulation no faster, nor in greater quantities than the occasions for them require, the mint should not issue them in payment, but have them in readiness for merchants, shop-keepers, etc. to fetch away by sale in exchange for silver or gold. This used to be the way the copper coinage at the tower of London got into circulation; every shop-keeper knew where to go to get ten or twenty shillings worth.
Congress could sustain no inconvenience, nor run any risk in exchanging those pieces for silver whenever they should be presented, because the value of them in silver would be deposited when they were first taken away. The difference between coining cents of their full value by weight, which they must have if they are to depend on their own worth for a currency, and coining copper notes, whose value is to depend upon their being exchangeable for silver at the mint, is, that the first of these methods is more than double the expence of the last, and the convenience to the public not so great, nor the security so good. If twenty thousand dollars worth of nominal cents or notes were coined, the saving in metal and workmanship would be upwards of one-half, and Congress would have the nominal value of them realized in silver. This difference between the two methods is equal to the first years expence in establishing a mint. To consider copper only as change, or as a medium by which to divide the silver coin, and to permit it to come out no faster than it shall be called for, will always prevent inconvenience in the copper coinage. The contract for 100,000 pounds (lawful) of copper coinage, is, I believe, ten times more than can be circulated, because it will only circulate as change. Of the profits which the contractors calculated upon, I send you a specimen upon six hundred weight of copper.
Three English coppers new from the mint at the tower (London) weigh 1 ounce avoirdupois-consequently 1 lb. wt. copper coins 48 coppers, and 600 wt. coins 28,800, which at 108 to the dollar is -L-8000.
All these estimations are at 6s the dollar. From this may very easily be 600 wt of West-India copper in utensils, at 8d per lb. York, or 6d lawful money -L-15 0 0
Melting, Casting, and Plating,
Four hands at casting, 2s6 -L-0 10 0
One hand at plating 0 3 0
50 bushels coal 0 10 5
Salt 0 1 0
Molasses 0 1 0
1 5 5
One man cleaning and boiling 0 2 6
Four at the culting mill 2s6 0 10 0
Fifteen at stamping . .do 1 17 6
2 10 0
Six shillings the dollar -L-18 15
calculated the profits which the contractors expected to make upon -L-100,000. The expence of the machinery is to be added, as I have only stated the manual expence and materials.
Quitting this part of the subject, I come to make some considerations on the silver coin.
Opportunities for procuring silver and gold for coining do not present
themselves like those for copper; but they undoubtedly would present themselves more frequently if a mint were established. As every nation puts some value upon its coin, the coin passes for more than the metal is worth-if, therefore, we are charged for the expence of making Spanish dollars, we had better make dollars for ourselves, provided we can procure the silver in bars. But until we have a mint the importation of silver will continue to be made in coin, because what can a merchant do with silver or gold in bars or ingots where there is no mint.
It therefore rests to know whether silver in bars or gold in ingots, or
any other way not coin, can be procured cheaper than in coin, and what the difference is.
The most effectual method to acquire this knowledge and to procure silver in bars, is to establish a mint, and to deliver to every importer of bars, or other person, the net produce in coin which his bars shall produce.
The price of silver in bars at the bullion-office in the bank (London) is 5S1 1/2-the price of silver in new Mexican dollars is 4S11 1/2-the difference is 2d. or the 27th part of a dollar. It is hardly to be supposed that we pay to the amount of this difference at the Havannah or elsewhere in receiving dollars instead of silver unmanufactured into coin-if we do, we pay above four times the price we can manufacture the coin for ourselves, provided we can procure the silver in that proportion.
Twenty-five men will be able to complete 4,000 dollars per day from the bars. A million of dollars, coined within the space of about a year and a half, at one cent per dollar, will pay all the expense of labor, and the price of machinery necessary for such an operation, after which the expence per dollar will diminish, provided the men are kept employed.
The following is given me as a tolerable proportionate estimate of the expense of coining copper, silver and gold, into cents, dollars and half-joes;
The labor of 25 men will coin, per day, about 10,000 coppers, or 4,000 dollars, or 2,200 half-joes.
By this it appears that the expense of coining copper is about forty times greater than that of silver, and about two hundred times greater than that of gold. This furnishes an additional reason against copper coinage.
It may perhaps be asked, that if the importer of silver in bars is to receive the exact produce of his bars from the mint, in coin, where will be the advantage? I answer, that the advantage in the first instance will be to the importer, because he gets more dollars for his cargo than he would by receiving dollars at the place of sale, and this is his inducement to bring in bars. The advantage in the second instance, is to the whole country, because it makes a greater quantity of money than there would be by importing the silver in coin. If the difference is i-27th in a dollar, and bars can be procured instead of Spanish dollars, the increase of silver money in the country would be as 112 to 108.
There is another circumstance by which money would increase in the country if a mint were established, which is from the old silver plate which is now sent to England, and it is not improbable that some old silver plate might come from the West-Indies. But until there is a mint, we must remain ignorant of the resources by which silver and gold are to be obtained.
The whole apparatus of a mint can be made in America. The only thing necessary to import will be a small quantity of cast-steel, which is an article not made in America.
The following is a tolerable estimate of the expense of as much machinery as will be sufficient to begin with, as it can occasionally be employed in gold, silver, and copper,
1 coining mill 450 Dols.
2 cutting mills 180
1 plating mill for copper 270
1 do. for silver 180
1 do. for gold 180
1 set of ingots, cast-steel, small tools, etc. 250
Coining is a new business in America. Those who have proposed contracts, knew, either of themselves, or from those who were to execute, what they were doing, but they supposed Congress to know nothing of the matter. Accident and a turn for mechanics have thrown me into a knowledge of their plans, and the profits they expected to make.
Whenever Congress goes into this business it will be best to do it on their own account. The experience will cost something, but it will be worth obtaining, and the cheapest way of obtaining it. The fact is, that the American coiners can afford to manufacture coppers and send them to England cheaper than the English coiners can send them to America. In England copper is about 10d or 10 1-2 sterling per lb. but old copper from the West-Indies is not half that price. When copper coining first began in the New-England States, a person concerned in that business has since told me, that he sent his son to the West-Indies to see after copper-that in the possession of one person, at Providence, he found upwards of 50 tons, which was offered him at the rate of 15 lb. for a dollar. When it is considered how great the exportation of copper utensils must annually be from England to the islands, and that they are a drug after they are worn out, and have no market for the old copper, but in America, it will be easy to account for the plans, schemes and proposed contracts that have been lately set on foot.
In contemplating the extent of a mint, I carry my mind a little further than the business of counting. The introduction of such a machinery as coining requires, will serve to bring forward those kind of arts which are connected with it, such as making buttons of various kinds. The mint may also be an Assay office for wrought plate, which will considerably contribute towards defraying the expence of the mint, at least it will be a convenient appendix to it-and the having an Assay office will promote the manufactory of plate in America, and prevent that branch of business going to England, which it now does from the want of that confidence in the purity of the metal which an Assay office would give. An Assay office is much wanted in Philadelphia. Before the war a bill was brought into the Assembly to appoint an Assay master, but the Governor refused passing the bill unless he had the appointment of the person, and the matter dropped, and has not been since revived- But it ought to be connected with the mint, as the standard for metals comes properly into that department. The silversmiths who bring the plate pay something for the stamp, and the office, as well for the seller as the buyer is a very necessary one.