The First Federal Mint – Making Money The Old Fashioned Way…

A silver dollar…

What comes to mind when you read that? A Las Vegas casino in the 50s – with Dean Martin crooning just beyond a floor filled with clanging slot machines? Well, maybe -- but take another look.

This coin is dated 1795. It’s a US mint coin from the third year of production. It is a product of the first serious attempt by the newly independent United States to get control of the chaotic coinage of nearly two centuries.

Chaotic coinage?

Absolutely – more about that over here .

Meanwhile…

The founding father of our first federal mint, or at least, the primary force behind this high risk venture was our first Treasury Secretary, Alexander Hamilton.

He and the others who supported the creation of a central mint gambled that 1) people would accept the end of monetary control by state governments in favor of a centralized authority, and 2) that a fledgling first federal mint could ramp up to meet the ever increasing demands of American commerce.

As to the first concern, people were accustomed to coins provided by local sources – like their state, like private mints – and it wasn’t just coins. Paper money was produced by each state as well.

OK, so…

Well, making money makes money.

Uh huh.

Well look: If I make a silver dollar, and it only costs me, say, forty-seven cents to make it, and put it into circulation at its face value, I’ve just made a fifty-three cent profit! And if I make a paper dollar…

Wow!

You get the idea. So why would the state governments want to give that up?

Then there was the other thing.

The first federal mint – the Philadelphia mint – started off in 1792 as… not exactly a garage-based start-up… but close.

In an old house on North Seventh Street, a well known Philadelphia scientist, engineer and clockmaker – (wonder if he knew Ben Franklin?) – named David Rittenhouse, appointed by President Washington, began the work of establishing the first US mint.

Manufacturing methods were decidedly low tech. Metal was rolled into sheets by horsepower -- using real horses -- the kind that consume hay and can step on you if you're not careful.

Coins were struck one by one on a hand operated screw press.

Dies were hand engraved, and because each die had a relatively short life, there were subtle variations in the design of the finished coins as failed dies were replaced.

Collectors prize these variations, and have developed elaborate classification systems to describe them.

Another reason for low production at the nation’s first national coin factory was that the mint was prohibited from purchasing gold and silver on the open market.

The business model in operation went something like this:

You as a private citizen or business have accumulated silver or gold, usually in the form of foreign coins. To bring some order into your business you decide to use the services of the new mint. You bring your hodge-podge miscellaneous coinage to the mint, where it is evaluated (“assayed”), melted down and reprocessed via the screw press into freshly struck United States coins.

Interestingly, you were provided this service at no charge – the first federal mint operated on money appropriated by Congress.

Plus, depending on the value of gold and silver, you often received a bonus, as the value of the metal used often exceeded the face value of the coins produced! This would cause you to forget about bringing order into your business with domestic coinage.

Instead, you would export your nice new coins overseas to the bullion markets for a handy profit! There’s a reason why many pristine specimens of coinage from the first federal mint have been found in European coin collections…

Congress became increasingly edgy. In 1800 the Mint was almost shut down.

After all, gold and silver US coins tended not to circulate...

...there were frequent equipment breakdowns...

...and recurring spells of yellow fever. (Ever been to Philadelphia in the summer? It’s hot, and in the eighteenth century, not very sanitary. I love Philadelphia… no undue criticism implied, but really, urban living in the 1700s did not feature high standards in hygiene.)

Nonetheless, the early pieces created by the original US mint are the subject of a number of fascinating and valuable coin stories. For example, did you know that…

the first American silver dollar was not made by the US mint…

the first US penny, struck in the spirit of Liberty, featured a ominous looking chain as its principal design element…

the first five-cent pieces were called half dimes, and may have been made from silver personally provided by George, well actually, Martha Washington.