CHAPTER V.

COINAGE.

AFTER the suspension of specie payments the regulation of the coinage did not much concern Congress for nearly a dozen years. The weight and composition of the cent was changed; two, three, and five-cent pieces were added to the list of coins; and persons were to be heavily fined or imprisoned, or both, who should make issue or pass "any coin, card, token, or device whatsoever in metal or its compounds." Such a punitory measure had become needful in consequence of the large quantities of bogus devices that were circulated as substitutes for the one-cent pieces. They were of the same size as the legal cent, contained no nickel, averaged about fifty-one grains in weight, and were worth "not more than one-fifth of a cent." Not less than three hundred varieties of these false and illegal tokens or cents were made and issued during the war period.1

1 Mint Reports, 1862, 1863. In 1862 the mint at Philadelphia made "a thorough re-examination" of the abrasion of coins. "It may be stated," said the director, Mr. Pollock, in his report, "that the silver coin averages a loss of one part in 630; the half eagle one in 3,550; the double eagle one in 9,000; and that, by a cautious estimate as to the proportions of the various sizes of coin actually among us, the average annual loss by abrasion does not exceed one part in 2,400; that is, in times when specie is current at par with bank paper, and not lying idle. Let it be observed that all experiments hitherto made, in regard to abrasion, seem to have been based upon prices not higher in value than the sovereign or half eagle.

When the law of 1857 was enacted, relating to the coinage of the cent, the opinion yet prevailed that the quantity of metal contained in the piece ought to have a value approximating to the value it represented. In reducing the cent, therefore, from one hundred and sixty-eight grains to seventy-two, its composition was changed to eighty-eight parts of copper and twelve of nickel. As nickel was worth at that time about two dollars a pound, a cent contained nearly half that value of nickel. The director of the mint maintained that although the change was "well intended," the experience of other countries and our own showed this to be an unnecessary liberality, and that the money thus used for buying nickel was "so much money wasted." In France a copper piece called a sous then circulated, weighing a little more than our cent, composed of ninety-five per cent copper, and five per cent of tin and zinc. He recommended that the law be so modified that the cent should contain ninety-five per cent of copper, and the remainder of zinc and tin in suitable proportions. Acting on this recommendation, Congress, in 1864, authorized the form, weight, and composition of the cent which has since that time been coined.

None of the copper coins were a legal tender until 1864, when they were endowed with this attribute to a small degree. The next year a notable improvement was made in providing for the redemption of the five-cent pieces when presented in

This has rendered expedient a new examination, because the great preponderance of our specie is in large pieces, which, being less exposed by circulation, must be judged by a law of their own. While one double eagle is lying quiet, five or ten smaller pieces are passing from hand to hand."” 1 Mint Report, 1863. "We have given it away under the mistaken notion that value was essential to secure the circulation of our inferior coinage."

sums not less than $100. But why did Congress refuse to redeem all the copper coins? In London, it was said in one of the mint reports urging a wider application of the law, that such coins could be had in large quantities at a discount by going to breweries and ale-houses for them, but the people preferred new ones, and so the mint was kept active, and the country was overstocked. Long before, the copper currency of Brazil had become so enormous that servants who went to market had a heavy load to carry each way, copper in going and provisions on their return. In 1871 the law was broadened to cover all copper, bronze, copper-nickel and base metal coinage. By the same law the secretary of the treasury was authorized to discontinue or diminish from time to time. the manufacture and issue of such coins.

The attempt to secure uniformity of coinage with Great Britain was begun before the war, and, notwithstanding that event, was continued. In his second annual report, Mr. Chase reminded Congress of the importance of establishing uniform weights, measures, and coins, and recommended that the half eagle of the United States be made equal to the gold sovereign of Great Britain in weight and fineness. The Berlin International Statistical Congress,1 held the next year, recommended the reducing of the existing units of money to a small number; that each unit should be, as far as possible, decimally subdivided; that the coins in use should be expressed in weights of the metric system and of the same degree of fineness, namely, nine-tenths fine and one-tenth alloy. That body also recommended the holding of a special Congress, which should be authorized to consider and report concerning the relative weights in the metrical system, of the gold and silver coins, 11 Ex. Doc., No. 49, 38 Cong., first session.

and to arrange the details of the proposed system. This action led to a conference in Paris, in 1867, in which nineteen nations were represented.

The conference proposed a single standard of gold; coins of equal weight and diameter; of equal quality or fineness, ninetenths fine; the weight of the existing five-franc gold piece to be the unit; the coins of each nation to bear the names and emblems preferred by it, and to be a legal tender, public and private, among all. The single gold standard was an American idea, and other countries, particularly France, assented to the adoption of it reluctantly.'

The Finance Committee of the Senate strongly favored the recommendations of the conference. One of the questions considered in their interesting report was, What provisions, if any, should be made for existing contracts in the event of adopting what the conference had recommended? The committee maintained that private debts were made knowing that Congress had the power to regulate the value of coins, which had been repeatedly exercised, but in no case had "any provision been made for enforcing existing contracts in the old rather than the new standard." Such, too, had been the practice in other countries where the standard had been changed. Such, too, was the principle adopted when passing the legaltender law. If made applicable only to future contracts, it "would have bankrupted a large portion of the active business men of the country, where business compelled them to contract debts."

With respect to public debts, the committee maintained that 'Senate Doc., No. 14, 40 Cong., second session. Supplemental Report by S. B. Ruggles, Ex. Doc., No. 266, 41 Cong., second session.

2 Report, No. 117, 40 Cong., second session.

the loan-contract was the only law that ought to affect the creditor until his debt was fully discharged. Congress, as the authorized agent of the American people, was one party to the contract, and could no more vary it by subsequent Acts than any other debtor could vary his contract. "As to the public creditor, no legislative power stands between him and the exact performance of his contract. Public faith holds the scales between him and the United States, and the penalties for a breach of this faith are far more severe and disastrous to the nation than courts, constables, and sheriffs can be to the private debtor." The public debt was then so large that a reduction of three and a half per cent in the standard—which would have been necessary had Congress adopted the recommendation of the conference-would have reduced the public debt $90,000,000. Neither Congress nor the country, nor the countries of the Old World, were fully prepared for the change.

When Congress next considered the subject of coinage, a bill to revise the mint laws was before that body. No revision had been made since 1837, and the secretary of the treasury had requested Mr. Knox, the deputy comptroller of the currency, to revise them. In the spring of 1870, he completed the task, and his report was sent to the House.' Among

1 Ex. Doc., No. 307, 41 Cong., second session. The Finance Committee of the Senate stated the features of the bill in their report, and added: "The method adopted in the preparation of the bill was, first, to arrange, in as concise a form as possible, the laws now in existence upon these subjects, with such additional sections and suggestions as seemed valuable. Having accomplished this, the bill, as thus prepared, was printed upon paper with wide margin, and in this form transmitted to the different mints and assay offices to the first comptroller, the treasurer, the solicitor, the first auditor, and to such other gentlemen as are known to be intelligent upon