USA Coin Album: It’s the Law! Lesser-known Passages Relating to United States Coinage — Part Two

United States coinage law is accented by many entries that were of importance at the time but have been largely forgotten by numismatists. This month, I'll continue my review of some of these obscure clauses.

Last time, I related how numerous foreign coins were assigned legal tender status in this country, albeit with certain restrictions attached regarding their weight and fineness. Before establishment of the US Mint, it was a fairly widespread practice by goldsmiths and silversmiths to "regulate" these foreign pieces by reducing them to a fixed weight that worked well in American circulation and then stamping the coins to attest to such adjustments.

By the 19th century, this activity seems to have ceased, since the Treasury performed an annual assay of randomly selected foreign coins that were legal tender to test their quality. As long as these nations continued to maintain the proper standards, their coins would continue to pass at authorized values.

The Act of June 25, 1834 stated that the dollar-size coins of Mexico, Peru, Chili [sic] and Central America could pass at tale (count) for the full value of one United States dollar, provided that they weighed not less than 415 grains. This was just one grain less than the United States silver dollar, last coined 30 years previous. The dollar-size coins of Brazil had to meet a more explicit standard, while the French five-franc piece, when weighing not less than 384 grains, was valued at just 93 cents American.

A follow-up act, passed three days later, specified the legal tender status of gold coins from these countries, as well as those from Great Britain, Portugal and Colombia. Again, the minimum standards were laid out, and all coins falling below those standards would be valued solely by their actual bullion content.

This second act was delayed until the 28th simply because it was not until that day that Congress passed a long-overdue law reducing the weights of United States gold coins. These had not circulated since about 1820, because their bullion value exceeded their face value, but the new law rectified this situation. This feature of the act is found within all guide books to United States coins, but not well known is that the law also assigned a new value to the previous gold issues. These would now be receivable in all payments at the rate of 94.8 cents per pennyweight. Both new gold laws became effective August 1, 1834.

The sweeping reform Act of January 18, 1837 replaced the original Mint Act of 1792 and addressed the issues which had since made much of the earlier law obsolete. In addition to defining all officers and their duties, salaries, oaths, bonds, etc., it laid out exactly the lineup of coins, their weights and finenesses. Again, these facts are found in all popular reference books, but the distribution details regarding copper coins (cents and half cents) are not well known. These pieces could be purchased by any individual or business requesting them, provided that payment be made with their "legal equivalent in other money" and that the amount delivered was neither below the minimum amount specified by the mint director for convenience or above a quantity that would interfere with the mint's ability to supply other applicants.

Rich gold discoveries beginning in 1849 caused a decline in the price of that metal relative to silver, and United States silver coins were soon driven from general circulation. While Congress debated what to do about this crisis, a stopgap measure was enacted March 3, 1851 that called for the coining of a new silver coin denomination which would be struck to a lower standard than that used for existing coins. The silver three-cent piece debuted that same year, but it was only .750 fine silver and thus worth less than its face value. Because of this lower standard, its legal tender value was limited to just 30 cents in any one transaction. This was a significant change in federal policy, as all other silver coins then enjoyed unlimited legal tender status to any amount.

The humble "trime," as it came to be known at the mint, led the way for an even more effective solution to the silver crisis just two years later. The Act of February 21, 1853 reduced the weights of all other silver denominations save for the dollar, while maintaining their existing fineness of .900 silver, and this permitted them to circulate freely. The new law also specified that they would have a legal tender limit of five dollars. This was an acknowledgment of their reduced status in relation to the silver dollar, which retained its unlimited legal tender value.

Realizing that these "subsidiary" coins, with their limited legal tender value, could become a redundant nuisance in circulation, Congress included provisions to limit their distribution. They were to be paid out by the Treasury and its authorized depositories only for an equal face value in gold coin in sums not less than one hundred dollars. Specifically prohibited was the exchange of fractional silver coins for deposits of silver bullion made by anyone other than the mint's own treasurer.

This important restriction was, however, overlooked for the sake of expediency, and details of this violation will be provided in next month's installment.

David W. Lange's column, “USA Coin Album,” appears monthly in The Numismatist, the official publication of the American Numismatic Association.