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ALEXANDER HAMILTON'S REPORT ON THE SUBJECT OF A MINT - Page 1

On April 15, 1790, the United State House of Representatives directed the Secretary of the Treasury, Alexander Hamilton, to explore the possibilities of establishing a Mint in America.  His extensive report, published nearly a year later, reveals much of the insights and observations that later became an integral part of our nation's monetary system.   

The report that follows is reprinted from the March and April 1791 editions of "The Universal Asylum and Columbian Magazine", printed in Philadelphia by William Young.  Hamilton's report appears on pages 189-201 of the March issue and pages 263-269 of the April issue:

CONGRESS of the UNITED STATES.

REPORT of the SECRETARY of the TREASURY on the SUBJECT of a MINT.

The SECRETARY of the TREASURY having attentively considered the subject referred to him, by the order of the HOUSE of REPRESENTATIVES of the fifteenth day of April last, relatively to the Establishment of the MINT, most respectfully submits the result of his enquiries and reflections.

A plan for an establishment of this nature involves a great variety of considerations, intricate, nice, and important. The general state of debtor and creditor; all the relations and consequences of PRICE; the essential interests of trade and industry; the value of all property; the whole income of the state and of individuals, are liable to be sensibly influenced, beneficially, or otherwise, by the judicious, or injudicious regulation of this interesting object.

It is one likewise, not more necessary than difficult to be rightly adjusted; one which has frequently occupied the reflections and researches of politicians, without having harmonified their opinions on one of the most important of the principles which enter into its discussion. Accordingly, different systems continue to be advocated, and the systems of different nations, after much investigation, continue to differ from each other.

But if a right adjustment of the matter be truly of such nicety and difficulty, a question naturally arises, whether it may not be most adviseable to leave things, in this respect, in the state in which they are? Why, might it be asked, since they have so long proceeded in a train, which has caused no general sensation of inconvenience, should alterations be attempted, the precise effect of which cannot with certainty be calculated?

The answer to this question is not perplexing - The immense disorder which actually reigns in so delicate and important a concern, and the still greater disorder which is every moment possible, call loudly for reform. The dollar, originally contemplated in the money transactions of this country, by successive diminutions of its weight and fineness, has sustained a depreciation of 5 per cent. And yet the new dollar has a currency in all payments in place of the old, with scarcely any attention to the difference between them. The operation of this in depreciating the value of property, depending upon past contracts, and (as far as inattention to the alteration in the coin may be supposed to leave prices stationary) of all other property, is apparent. Nor can it require argument to prove, that a nation ought not to suffer the value of the property of its citizens to fluctuate with the fluctuations of a foreign mint, and to change with the changes in the regulations of a foreign sovereign. This, nevertheless, is the condition of one, which having no coins of its own, adopts with implicit confidence those of other countries.

The unequal values allowed in different parts of the Union to coins of the same intrinsic worth; the defective species of them, which embarrasses the circulation of some of the states; and the dissimilarity in the several monies of account, are inconveniences, which if not to be ascribed to the want of a national coinage, will at least be most effectually remedied by the establishment of one; a measure that will at the same time give additional security against impositions, by counterfeit as well as by base currencies.

It was with great reason, therefore that the attention of Congress, under the late confederation, was repeatedly drawn to the establishment of a mint; and it is with equal reason that the subject has been resumed; now that the favorable change which has taken place in the situation of public affairs, admits of its being carried into execution.

But though the difficulty of devising a proper establishment ought not to deter from undertaking so necessary a work; yet it cannot but inspire diffidence in one, whose duty it is made, to propose a plan for the purpose, and may perhaps be permitted to be relied upon as some excuse for any errors which may be chargeable upon it, or for any deviations from sounder principles, which may have been suggested by others, or even in part acted upon by the former government of the United States.

In order to a right judgement of what ought to be done, the following particulars require to be discussed.

I. What ought to be the nature of the money unit of the United States ?

II. What the proportion between gold and silver, if coins of both metals are to be established ?

III. What the proportion and composition of alloy in each kind ?

IV. Whether the expence of coinage shall be defrayed by the government, or out of the material itself ?

V. What shall be the number, denominations, sizes and devices of the coins?

VI. Whether foreign coins shall be permitted to be current or not; in the former, at what rate, and for what period?

A pre-requisite to determining with propriety, what ought to be the money unit of the United States, is to endeavor to form as accurate an idea as the nature of the case will admit of what it actually is. The pound, though of various value, is the unit in the money of account of all the states. But it is not equally easy to pronounce what is to be considered as the unit in the coins. There being no formal regulation on the point (the resolutions of Congress of the 6th. of July, 1785, and 8th. of August, 1786, having never yet been carried into operation) it can only be inferred from usage or practice. The manner of adjusting foreign exchanges, would seem to indicate the dollar as best entitled to that character. In these, the old piaster of Spain; or old Seville piece of eight rials, of the value of four shillings and six pence sterling, is evidently contemplated. The computed par between Great-Britain and Pennsylvania, will serve as an example. According to that, one hundred pounds sterling is equal to one hundred and fifty-six pounds and two thirds of a pound Pennsylvania currency; which corresponds with the proportion between four shillings and six pence sterling, and seven shillings and six pence the current value of the dollar in that state, by invariable usage. And, as far as the information of the Secretary goes, the same comparison holds in the other states.

But this circumstance in favour of the dollar, loses much of its weight from two considerations. That species of coin has never had any settled or standard value, according to weight or fineness, but has been permitted to circulate by tale, without regard to either; very much as a mere money of convenience; while gold has had a fixed price by weight; and with an eye to its fineness. This greater stability of value of the gold coins, is an argument of force for regarding the money unit as having been hitherto virtually attached to gold, rather than to silver.

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