A Brief History of US Coinage

             Prior to the establishment of the United States as a nation a mix of locally produced and foreign coins were used in commerce. Coinage consisted of gold and silver coins trading at their intrinsic value and minor denomination copper coins whose value was based on their weight. Colonial American coinage is a popular area of collecting. It includes both pre-United States issues as well as Confederation period state and private issues prior to our first centrally issued coinage commencing in 1793.

            Our current decimal currency system was introduced in 1793 and has continued ever since. There have been many changes in this system since its inception, however the basic system has continued uninterrupted for more than two centuries. Half Cents and Large Cents were issued through 1857, but due to the increased price of copper were terminated that year, the Cent of its current diameter being introduced at that time as their sole replacement. The circulation of foreign coins in commerce was banned the same year. During the 19^th century denominations including the 2-cent, 3-cent, half dime, 20-cent, gold $1, $3, and $4 Stella would come and go. Each of these obsolete denominations are popularly collected today.

            One of the more significant events of the 19^th century regarding coinage was the Bland-Allison Act of 1878, pork barrel congressional legislation that mandated the government purchase tons of silver monthly from mines in the west, then strike the silver into unwanted Silver Dollars. US Mint equipment became dedicated primarily to the massive numbers of Silver Dollars to be produced between 1878 and 1904 when Silver Dollar production was interrupted due to the low amount of silver remaining in inventory.

            The tumultuous 20^th century saw yet more changes. During 1933 gold coinage production and circulation was suspended by presidential decree during the Great Depression. This was followed in 1964 by the suspension of silver coinage for circulation after that date, effectively changing our currency system from a system based on specie to one based on fiat money. (Another way to explain this is from a system based on the intrinsic value in coins to a system based on faith in the economy and in our government rather than in precious metal value.) Silver Dollar production ceased after 1935, with the dollar denomination being resumed in 1971. Since that time a large diameter Eisenhower Dollar, smaller diameter Susan B. Anthony Dollar, and golden color Sacagawea Dollar coin have been issued, none of which have circulated very widely.

            Commemorative coins were first issued in 1892, while Proof sets appear in 1936, and Mint sets in 1947. Commemoratives are generally divided into the so-called classic period ending in 1954 and the modern period commencing in 1982. Bullion American Eagle coins, now produced in gold, silver, and in platinum, were introduced in 1986.

            Paper money first appeared in Colonial times, with the first federally issued modern notes being issued during the Civil War. Individual banks issued paper money during the 19^th century, notes in theory backed by gold and silver coins (also known as “specie”). Since many of these “wildcat” banks did not properly back their paper notes they often went broke. Today these notes are known as broken bank notes. Eventually all paper money came to be centrally issued by the US government. Today all notes in circulation are Federal Reserve notes, although all past federal issues are legal tender as well.