History Timeline 1780s

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U.S. Timeline - The 1780s

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  • 1785 Detail

    July 6, 1785 - The United States adopts a decimal coinage system, with the dollar overwhelmingly selected as the monetary unit, the first time any nation has done so.

    Thomas Jefferson and Decimal Coinage System
    It had been three years since the first discussion toward a decimal coinage system was broached by Robert Morris, when, as superitendant of Finance, recommended such at the opening of The Bank of North America.. He was backed by Gouverneur Morris, his assistant. The odd thing was that Thomas Jefferson, in 1784, did not agree with their specific plan and attempted to defeat it. He agreed with the decimal money system as far back as 1776, and Congress had already passed a report from the Grand Committee on May 13, 1785 agreeing to create a national coinage system, and prior to that, on February 21, 1782 with pattern coins produced in April 1783.

    Jefferson thought that the problem with the Morris system was that it was based on odd units; one dollar would be worth 1440 units; one pound sterling worth 1660 units. What was a unit? Good question; it would be a coin with a quarter of a grain of fine silver. Oh, boy. Jefferson thought that too laborious for the average merchant or citizen.

    "I proposed therefore, instead of this, to adopt the Dollar as our Unit of account and payment, and that it's divisions and subdivisions should be in the decimal ratio. I wrote some Notes on the subject, which I submitted to the consideration of the financier. I received his answer and adherence to his general system, only agreeing to take for his Unit 100. of those he first proposed, so that a Dollar should be 14.40/100 and a crown 16. units. I replied to this and printed my notes and reply on a flying sheet which I put into the hands of the members of Congress for consideration, and the Committee agreed to report on my principle," Thomas Jefferson.

    Since Jefferson's proposals concerning coinage in 1784 were in part inspired by a desire to defeat the plan set forth in 1782-1783 by Robert Morris and his assistant, Gouverneur Morris, as well as by a desire Jefferson had entertained at least as early as 1776 to base the money system on decimal reckoning, these proposals need to be presented with those of the Morrises to which they were opposed. Both plans should also be considered in the light of the report of the Grand Committee of 13 May 1785, which, as approved by Congress, closed the first important chapter in the history of the effort to create a national coinage but by no means ended Jefferson's connection with this fundamentally important subject.

    Both plans were presented to Congress, but it was apparent after their discussion, that the proposal by Jefferson was gaining steam. The committee reported out that the ideas of Morris and his assistant ...

    "... introduces a Coin unlike in Value to any thing now in use ... departs from the national mode of keeping Accounts, and tends to preserve inconvenient Prejudices," Congressional committee, May 19, 1785.

    Congress debated the merits of both plans for the next two months, with William Grayson sending a copy of both plans to George Washington, noting ...

    "Mr. Jefferson's ideas upon this subject ... plain and simple; well adapted, I think, to the nature of the case, as he has exemplified by the plan. Without a Coinage, or without some stop can be put to the cutting and clipping of money, our Dollars, pistareens &c. will be converted (as Teague says) into five quarters, and a man must travel with a pair of money scales in his pocket, or run the risk of receiving Gold at one fourth less by weight than it counts," William Grayson. This note is sometimes listed as occuring on July 25, which would make it after passage by Congress of Jefferson's system, as noted below.

    Jefferson's proposal was accepted on July 6, 1785 with all affirmative votes. There would be a dollar with dimes, cents, and mills as its subdividers in decimal notation.

    Implementatin of the System

    On August 8, 1786, one hundred copies of the Congressional report were printed and the system adopted. There would be silver coins for a dime, a double dime, a half dollar, and a dollar. There would be gold coins of an eagle and half-eagle. Copper coins would represent a cent and a half-cent. The Board of Treasury was ordered to prepare plans for a mint. That lagged until Thomas Jefferson, as Secretary of State, made a 1790 report on the progress of a system of coins, weights, and measures, and until Alexander Hamilton gave a report in 1791 backing the system and mint establishment.

    "It is conceived that nothing better can be done in relation to this, than to pursue the track marked out by the resolution of the 8th of August, 1786. This has been approved abroad, as well as at home, and it is certain that nothing can be more simple or convenient, than the decimal subdivisions. There is every reason to expect that the method will grow into general use, when it shall be seconded by corresponding coins," Alexander Hamilton, 1791.

    Coinage Act of 1792

    With the backing of Jefferson, Hamilton, Madison, Monroe, and Washington, Congress finally passed the Coinage Act of 1792, put into effect on April 2, then put the Jefferson plans into practice. It also created the first U.S. Mint, to be built in Philadelphia with David Rittenhouse, an American scientist, appointed first director by President Washington. They bought an old distillery, demolished it, and began construction on foundation work on July 31, 1792. First building built, actually the first built ever by the U.S. Government, was the smelting house. A mill building was constructed in the center of the complex, and a three story building in front, on Seventh Street, that housed the gold and silver in the basement; deposit, weighing rooms, and press room for striking coins on the first floor; mint offices on the second floor, and a third floor assay office.

    Photo above: Montage (left) Official portrait of President Thomas Jefferson, 1800, Rembrandt Peale. Courtesy Wikipedia Commons; (right) Picture of U.S. Mint, built 1792, 1908, unknown author. Courtesy Us Coin Values Advisor.com via Wikipedia Commons. Below: Montage of (left) Thomas Willing, John Wollaston the Younger; (center) colonial currency, three pence, from the colony of Pennsylvania issued by the Bank of North America, 1789, Benjamin Franklin Bache, printer; (right) painting of Robert Morris, Jr., Robert Edge Pine. All courtesy Wikipedia Commons. Source: founders.archives.gov; Wikipedia Commons.

    Bank of North America

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