The Coinage Act of 1792

What Is the Coinage Act of 1792?

The Coinage Act of 1792 — all the more generally known as the Mint Act or the Coinage Act — was a regulation passed by Congress on April 2, 1792, that laid out the United States Mint in Philadelphia. The act gave expectations to the design and production of coins, establishing the groundwork for modern U.S. currency. The Coinage Act of 1792 illustrated the duties of the five officers of the mint and laid out the U.S. dollar as the nation's standard unit of currency.

Understanding the Coinage Act of 1792

Preceding the Coinage Act of 1792, the difficulties of not having a national coinage system had turned into a critical problem for the juvenile independent nation. Approved by the states in 1778, the Articles of Confederation gave both the states and Congress the authority to coin money. During the American Revolutionary War, the Continental Congress issued paper currency — called Continentals — to assist with funding the war.

Continentals, which were not backed by a physical asset like silver or gold, immediately lost value. Both the settlements and Congress issued gigantic amounts of debt certificates to cover their war expenses, which came about in the rapid depreciation of all forms of paper currency. To determine the currency crisis and assist the nation with laying out its sway, the United States Consitution gave Congress the exclusive authority to coin money. This was then trailed by the Coinage Act of 1792, which laid out the U.S. coinage system and set the mint at the seat of the U.S. government.

In Jan. 1777, $1.25 of Continental currency could buy $1 in gold or silver coins. By Jan. 1781, the Continental had depreciated to the point that it took $100 in Continentals to get $1 in gold or silver coins.

Requirements of the Coinage Act of 1792

The law made U.S. hawks, dollars, pennies, and sub-denominations of each, as legal tender at their face value or, for partial coins, in relation to their weight. The act determined the metallic creation and weight of each coin in copper, silver, or gold, either pure or of a standard fineness. The value of every one of these coins was dependent on the type (gold, silver, copper) and the amount of material used to make them.

The Coinage Act laid out the dollar as a fundamental unit of currency. It likewise fixed the price of gold and silver at 15 pounds of pure silver to one pound of pure gold. It defined a decimal system of bigger and more modest denominations. Hawks, half birds, and quarter falcons were minted from gold, and worth $10, $5, and $2.50, individually. Dollars (or units), half dollars, quarter dollars, disme (the early form of the dime), and half disme were minted from silver and were worth $1, $0.50, $0.25, $0.10, and $0.05 individually. Pennies and half pennies were minted from copper and were worth $0.01 and $0.005 individually.

Design of Coins

The Coinage Act additionally directed the markings to be engraved upon the coins minted. One side of each coin was to be recorded with "Liberty," the time of the coinage, and a picture representing liberty. The reverse side of the silver and gold coins was to be recorded with the picture of the bird and the words "United States of America." Copper coins were to be engraved with their denomination on the reverse side too.

Special Considerations

The Coinage Act permitted any person to have silver or gold bullion coined at the mint free of charge, or exchange it for the equivalent value of the coin, less a charge of one-half percent of the weight of pure bullion introduced. The Mint Act laid out quality control measures for the assaying of coins that would stay in effect until 1980 when the United States Assay Commission was annulled. The law likewise settled a penalty of death for the debasement of gold or silver coins or the embezzlement of similar by the officers of the mint.

Features

• The Coinage Act of 1792 laid out the U.S. dollar as the nation's currency and made a mint for national coinage.
• During the Revolutionary War, both Congress and the states reserved the privilege to coin money and issue debt to fund their war efforts.
• The United States Constitution tended to the currency crisis by giving Congress the sole authority to coin money.
• This brought about an overabundance of debt certificates and Continental dollars, which immediately lost value as they were not backed by physical assets like silver or gold.
• The Coinage Act of 1792 trained the U.S. mint to strike coins of gold, silver, and copper of different denominations.