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

Thus, there are far fewer quirks in our coinage laws since that time, yet a few oddities do stand out amid the routine actions of Congress.

When the USA acquired the Philippine Islands by treaty with Spain in 1899, one of the more pressing concerns was a reliable coinage. The existing Spanish issues were denominated in pesos and centavos, and it was decided to continue this familiar money but with completely new designs by Filipino-American artist Melecio Figueroa. The new USA-Philippines peso would be exchangeable with United States currency at the rate of two pesos to the dollar. Due to the very low price of silver at the time this legislation was passed on March 23, 1903, it was possible to coin a silver peso that was equal in size to the USA silver dollar, while being legally worth only half as much. Most collectors assume that these coins were struck on silver dollar planchets, but that's not the case. While similar in size, the USA-Philippines peso was coined to the pre-1837 dollar standard of 416 grains, making it worth more as bullion than a Morgan dollar. This standard lasted just three years, as the price of silver began to climb almost as soon as the coins were issued, and pesos struck 1907 and later were both smaller and of lower fineness than the 1903-06 pieces.

Most coinage legislation passed during the first half of the 20th century was concerned with commemorative coins or medals and contains no surprises. The Act of April 24, 1906, however, does stand out, as it gave us cents and nickels from the Denver and San Francisco Mints. Previously, these facilities had been limited to coining only gold and silver pieces. New Orleans was likewise authorized to produce minor coins, but it declined to do so prior to termination of coining operations there on July 1, 1909. The new law permitted the Director of the Mint, with the approval of the Treasury Secretary, to transfer up to $200,000 to any of the four mints then active for the purpose of purchasing the necessary metals for coining cents and nickels. This was needed, since the mints did not take deposits of base metals for coining, as they did with gold and silver.

A law passed March 4, 1909 made it illegal not only to counterfeit United States coins but also foreign coins. It even went so far as to forbid the making of any coin-like object of original design. It's clear from the language used that makers of tokens were skating on thin ice, but it seems that most jurisdictions elected to let this activity slide, as long as no such pieces were used outside of the establishments that created them.

Making or passing counterfeit USA coins was punishable by a fine of up to $3,000, a prison term of up to five years, or both. Making dies or hubs for such purpose would result in a fine of up to $5,000 and imprisonment of up to ten years. The same activity, when directed at foreign coins, warranted a fine of up to $2,000, imprisonment of up to five years, or both.

The last act of legislation that I'll address pertains to one our most popular coin series—the Morgan dollar. The Pittman Act of April 23, 1918 is well known to numismatists, as it led to the destruction of more than 270 million silver dollars held by the Treasury. While some of this silver was earmarked for recoining into fractional silver pieces, such action never occurred, and that clause in the legislation was terminated on November 29, 1922. By far the greatest amount of bullion, a total of 259,121,554 silver dollars' worth, was sold to the Britain so that it would have enough of the metal to back all of its council bills, the primary currency in India. During World War I, a desperate Germany had attempted to incite rebellion in India by spreading rumors that these notes could not be fully redeemed. Unable to come up with sufficient silver to disprove the rumors, Britain had been forced to begin redeeming council bills in gold, a ruinous path that required relief from its wartime ally, the USA.

All of this seems quite reasonable and ordinary, yet the legislation contains some curious language that betrays the great urgency for immediate relief. The Treasury Secretary was therein authorized "to melt or break up" the silver dollars. Breaking up was the process of flattening the coins in a rolling press, which effectively demonetized them far more quickly than could be achieved by melting. In this form, they were shipped to Britain as "diamond-shaped plates," according to Treasury Secretary Carter Glass. Only when the immediate crisis had passed was the Treasury able to begin melting coins to destroy them completely. Sales of American silver to Britain lasted as late as May of 1919, yet the melting of silver dollars continued through much of that year.

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