Article 1, Section 8, Clause 5
[Volume 3, Page 2]
Robert Morris to President of Congress15 Jan. 1782Jefferson Papers 7:160--68
Finding by the Act of the United States in Congress of the seventh Instant that I am Instructed to prepare and report a Table of Rates at which the different Species of foreign Coins most likely to circulate within the United States shall be received at the Treasury I have been induced again to turn my Attention to an Object which has employed my Thoughts very frequently and which would have been long since submitted to Congress had I not been prevented by other Business and much delayed by those Things relating to this Business which depended upon others. I shall now pray Leave to deliver my Sentiments somewhat at large on this Subject.
The United States labor under many Inconveniences and even Disadvantages which may at present be remedied but which if suffered to continue would become incurable and lead to pernicious Consequences. It is very fortunate for us that the Weights and Measures used throughout America are the same. Experience has shewn in other Countries that the Efforts of the Legislator to Change Weights and Measures altho fully seconded by the more enlightened Part of the Community have been so strongly opposed by the popular Habits and Prejudices that Ages have elapsed without producing the desired Effect. I repeat therefore that it is happy for us to have throughout the Union the same Ideas of a Mile and an Inch a Hogshead and a Quart, a Pound an Ounce. So far our commercial [Volume 3, Page 3] Dealings are simplified and brought down to the level of every Capacity. With respect to our Money the Case is very widely different. The Ideas annexed to a Pound a Shilling and a Penny are almost as various as the States themselves. Calculations are therefore as necessary for our inland Commerce as upon foreign Exchanges and the commonest Things become intricate where Money has any thing to do with them. A Farmer in New hampshire for Instance can readily form an Idea of a Bushell of Wheat in South Carolina weighing sixty Pounds and placed at one hundred Miles from Charlestown but if he were told that in such Situation it is worth twenty one Shillings and eight Pence, he would be obliged to make many Enquiries and form some Calculations before he could know that this Sum meant in general what he would call four Shillings. And even then he would have to enquire what Kind of Coin that four Shillings was paid in before he could estimate it in his own Mind according to the Ideas of Money which he had imbibed. Difficulties of this Sort do not occur to Farmers alone, they are perplexing to most Men and troublesome to all. It is however a fortunate Circumstance that Money is so much in the Power of the Sovereign as that he can easily lead the People into new Ideas of it and even if that were not the Case yet the loose State in which our Currency has been for some Years past has opened the Way for receiving any Impressions on that Subject. As we are now shaking off the Inconveniencies of a depreciating Medium the present Moment seems to be that in which a general Currency can best be established so as that in a few Months the same Names of Money will mean the same Things in the several Parts of the United States.
Another Inconvenience which admits of the same easy Remedy and which would indeed be cured by the very same Act is the Want of a legal Tender. This is as necessary for the Purposes of Jurisprudence as a general Currency is for those of Commerce. For altho there is great Impropriety not to say Injustice in compelling a Man to receive a Part of his Debt in discharge of the whole yet it is both Just and proper that the Law should protect the honest Debtor who is willing to pay against the vexatious Suits of an Oppressive Creditor who refuses to receive the full Value.
The Nature Value and Use of Money have always occasioned strong Temptations to the Commission of Fraud and of Consequence the Practice of counterfeiting is coeval with that of Coining. No Government can Guard its Subjects entirely against the wicked Ingenuity which has been exercised in this respect. But it has always been the Object of every wise Government to take all the Precautions against it which are within the Compass of human Ability. These Precautions will be most effectual where the Coins are few and simple because they by that Means become familiar to all Ranks and Degrees of Men but where the Coins are so numerous that the Knowledge of them is a kind of Science the lower Order of Citizens are constantly injured by those who carry on the Business of debasing sweating clipping counterfeiting and the like. It is therefore to be lamented that we have so many different Coins in the United States.
It is not necessary to mention what is in every Body's Mouth that the precious Metals were first used as Bullion and that the Inconvenience of weighing and the Difficulty of Assaying introduced the Practice of Coining in Order that the weight and fineness might be known at the first View and of Consequence the Value be instantly ascertained. It is equally unnecessary to observe that the great Privilege of declaring this Value by particular Marks has among all Nations been vested exclusively in the Sovereign. A Trust so important could not indeed be vested any where else because the Danger of abusing it was too great. And History informs us that Sovereigns themselves have not on this Occasion behaved with that Integrity which was alike due to their Subjects and to themselves to the Interests of their People and to their own personal Glory. Experience has already told us that the advantage of Gold as a Coin is in this Country very considerably diminished for every distinct Piece must be weighed before it can be safely received. Both Gold and Silver Coins are indeed preferable, in one respect to common Bullion that the Standard is presumed to be just and consequently they are received without the Delays and Expences of assaying. It must however be remembered that they are all foreign Coins and of Course we are not only exposed to the Tricks of Individuals but should it suit the Interest or Convenience of any Sovereign to make base Money for us there is Nothing to prevent it. If for Instance the King of England or any of his Birmingham Artists should coin Guineas worth but sixteen shillings Sterling our Citizens would readily and freely receive them at twenty one Shillings Sterling. It is my Duty to mention to Congress Information I have received that Guineas of base Metal are coined at Birmingham so well as to escape any common Attention. Now there can be no Doubt but that every such Guinea received here would be a national Loss to us of an English Crown. How much we suffer in this Way at present it is impossible to estimate.
What I have already had the Honor to observe contains some of the reasons why it appears to me highly necessary that an American Coin should be adopted without Delay and to these Reasons it may be added that there is a want of small Money for the common Occasions of Trade and that it is more felt by our Soldiery than any other Persons. For the little Pay which they do receive being either in Gold or at best in Dollars the Sutlers and others with whom they have Dealings continually take the Advantage of their want of Change and rate the Prices of their Goods accordingly.
Shortly after my Appointment finding that there was a considerable Quantity of public Copper at Boston I ordered it round to this Place. It has safely arrived and will when coined amount to a considerable Sum. The necessary Machinery of a Mint can be easily made and there are Persons who can perform the whole Business. I must pray leave therefore to submit to Congress some few more particular remarks on this Subject as introductory to a Plan for an American Coin.
Altho most Nations have coined Copper yet that Metal is so impure that it has never been considered as constituting the Money Standard. This is affixed to the two precious [Volume 3, Page 4] Metals because they alone will admit of having their intrinsic Value precisely ascertained. But Nations differ very much in the relation they have established between Gold and Silver. In some European Countries an Ounce of pure Gold passes for fifteen Ounces of pure Silver. In others for fourteen. In China it passes for much less. The Standard therefore which is affixed to both Metals is in Reality affixed to neither. In England Gold is to Silver nearly in the Proportion of one to fifteen and in France nearly of one to fourteen. If a Man carries fourteen ounces of Gold from France to England he receives two hundred and ten Ounces of Silver which in France purchase fifteen ounces of Gold so that he gains on that Exchange one ounce of Gold. In like Manner he who carries from England fourteen Ounces of Silver to France receives one Ounce of Gold which in England purchases fifteen Ounces of Silver wherefore he gains on that Exchange one Ounce of Silver. If it be then supposed that the Coins of these two Countries were alike pure it must follow that in a short Time all the gold Coin of full Weight would be in England and all the silver Coin of full weight in France. But the light Silver circulating in England and the light Gold in France the real Standard of Coin in each would be different from the legal and seek a Medium of fourteen and an half of Silver for one of Gold altho the legal Standard might still be in the one Place fifteen and in the other fourteen.
The Demand which Commerce might make for any one of the precious Metals in Preference of the other would vary this real Standard from Time to Time and in every Payment a Man would get more or less of real Value for his Debt according as he were paid in the Coin of greater or lesser Value in relation to the real Standard. If for Instance the Debt were contracted when the Silver was to Gold as one to fifteen and paid when as one to fourteen; if the Debt were paid in Silver he would gain one thirtieth and if in Gold he would loose one thirtieth. In England the Money Standard is rather affixed to Gold than to Silver because all Payments are made in the former and in France it is rather affixed to Silver than to Gold.
Arguments are unnecessary to shew that the Scale by which every thing is to be measured ought to be as fixed as the Nature of Things will permit of. Since therefore a Money Standard affixed to both the precious Metals will not give this certain Scale it is better to make use of one only. Gold is more valuable than Silver and so far must have the Preference but it is from that very Circumstance the more exposed to fraudulent Practices. Its Value rendering it more portable is an Advantage. But it is an Advantage which Paper possesses in a much greater Degree and of Consequence the commercial Nation of England has had recourse to Paper for the Purposes of it's Trade altho the Mass of circulating Coin is Gold. It will always be in our Power to carry a Paper Circulation to every proper Extent. There can be no doubt therefore that our Money Standard ought to be affixed to Silver.
But Silver is liable like every Thing else to a Change of Value, if there is a Demand for it, to export, the Value will rise, if the Contrary it will fall, and so far it cannot be considered as a fixed Measure of Value. Before this Objection be considered it will be proper to make a few reflextions on another Part of the present Subject but in this Place I remark that if the Objection cannot be removed we must not suffer it to preponderate because it weighs alike against every other Metal.
To Coin Money is a certain Expence and of Course it is an Expence which must be borne by the People. In England the Coin when melted will sell as Bullion for just as much as its Weight in other Coin. The Expence of Coinage is paid by the Crown and of Course it is raised by Taxes from the People. In France the Coinage instead of being expensive yields a Profit. The Price given for Metal at the Mint is about eight Pr. Cent less than the same Quantity will yield when coined at the french Standard. Both of these Methods are liable to Objections. When Commerce demands an Exportation of Bullion from England the Coin of the Kingdom goes out in common with others; this increases of Course the National Expence of Coinage. Laws to prevent the Exportation or Importation of any Thing so valuable as Money are always Nugatory because they always can be eluded and therefore when private Interest requires they always will be eluded. That the Guineas of England therefore are not continually going away is to be attributed to the extraordinary Value affixed to Gold which has been just mentioned and which banishes silver continually. In France the People are not liable to this Inconvenience because their Money passing for more than its Value in Bullion, Bullion will always be exported in Preference of Coin. But for the same Reason there is always a strong Temptation to imitate their Coin and send it for the Purchase of their Commodities. It would be both impossible and unnecessary to distinguish the True from the false because both would be of equal intrinsic Value. The Place at which they were struck would be indifferent to the Receiver, of Consequence the foreigner who made french Coin would gain by his Trade and the french Nation would loose proportionately.
The Money paid for Coining or the Coinage of France has however this Advantage that the Money is a Standard which does not fluctuate with the Price of Bullion. This Coinage is as has been said about eight Pr. Cent. When Bullion is below ninety two it is carried to the Mint when above ninety two to the Broker or Silver Smith. The Coin still continues fixed nor will it bear Exportation until Bullion rises to an hundred when the french Coin would be as liable to Exportation as the English. In that Case it would be exported on one Hand, while on the other no more would have been coined for a considerable Period because to make the eight Pr. Cent Coinage it is necessary that the Mint Price should be ninety two. The Coin therefore could not long be exported if at all but would soon resume it's Value. The Price of Bullion must float between ninety two and an hundred while the Coin would preserve its fixed Quality as Money.
Hence then it appears proper that the Price of Coining should be defrayed by the Coinage because first it is natural and proper that the Price should be paid when the Benefit is received and that the Citizen in Return for the Advantage of being ascertained in the Value of the Medium of Commerce by the Sovereign should pay for ascertaining [Volume 3, Page 5] it just as that he should pay for the fashion of the Plate he uses or the Construction of the Cart he employs. Secondly it is right that Money should acquire a Value, as Money distinct from that which it Possesses as a Commodity in Order that it should be a fixed Rule whereby to Measure the Value of all other Things and thirdly it is wise to prevent the Exportation of the Coin which would involve an unnecessary national Expence and also to prevent the Imitation of it abroad so as to create a national Loss: For both which Purposes it is proper that the Coinage should only defray the Expence without making any considerable Profit. The Laws usual in all Countries with respect to the Money will then fully operate the Effect intended.
In Order that a Coin may be perfectly intelligible to the whole People it must have some Affinity to the former Currency. This therefore will be requisite in the present Case. The Purposes of Commerce require that the lowest divisible Point of Money or what is more properly called the Money Unit should be very small because by that Means Price can be brought in the smallest Things to bear a Proportion to the Value. And altho it is not absolutely necessary yet it is very desirable that Money should be increased in a decimal Ratio because by that Means all Calculations of Interest Exchange Insurance and the like are rendered much more simple and accurate and of Course more within the Power of the great Mass of People. Wherever such Things require much Labor Time and Reflection the greater Number who do not know are made the Dupes of the lesser Number who do.
The various Coins which have circulated in America have undergone different Changes in their Value so that there is hardly any which can be considered as a general Standard unless it be spanish Dollars. These pass in Georgia at five Shillings in North Carolina and New York at eight Shillings in Virginia and the four Eastern states at six Shillings in all the other States except South Carolina at seven Shillings and six Pence and in South Carolina at thirty two Shillings and six Pence: The Money Unit of a new Coin to agree without a Fraction with all these different Values of a Dollar except the last will be the fourteen hundred and fortieth Part of a Dollar equal to the sixteen hundreth Part of a Crown. Of these Units twenty four will be a Penny of Georgia, fifteen will be a Penny of North Carolina, or New York, twenty will be a Penny of Virginia and the four Eastern States sixteen will be a Penny of all the other States except South Carolina and forty eight will be thirteen Pence of South Carolina.
It has been already observed that to have the Money Unit very small is advantageous to Commerce but there is no Necessity that this Money Unit be exactly represented in Coin it is sufficient that its Value be precisely known. On the present Occasion two Copper Coins will be proper the one of eight Units and the other of five. These may be called an eight and a five two of the former will make a Penny Proclamation or Pennsylvania Money and three a Penny Georgia Money, of the latter three will make a Penny York Money and four a Penny lawful or Virginia Money. The Money Unit will be equal to a quarter of a Grain of fine Silver in coined Money. Proceeding thence in a decimal Ratio one hundred would be the lowest Silver Coin and might be called a Cent. It would contain twenty five Grains of fine Silver to which may be added two Grains of Copper and the whole would weigh one Penny Weight three Grains. Five of these would make a Quint or five hundred Units weighing five Penny Weight fifteen Grains and ten would make a Mark or one thousand Units weighing Seven Penny weight six Grains.
If the Mint Price of fine Silver be established at 22,237. Units per Pound. This being coined would be four Times 5,760 Grains or 23,040 Units. The difference is 803. Units and therefore the Coinage is 803 on 23,040 or somewhat more than 348/100 P. Cent, which would be about the Expence attending it. A Dollar contains by the best Assays which I have been able to get about 373 Grains of fine Silver and that at the Mint Price would be 1,440 Units. In like Manner if Crowns contain from 414. to 415 Grains of fine Silver they would at the Mint Price be worth 1600 Units.
When such a Coin shall have been established the Value of all others would be easily ascertained because Nothing more would be necessary than to have them assayed at the Mint. The Advantage of Possessing legal Money in Preference of any other would induce People to carry foreign Coin to the Mint until a sufficiency were struck for the circulating Medium. The remainder of the foreign Silver together with the Gold should be left entirely to the Operations of Commerce as Bullion.
In the present Moment it is by no Means of such Consequence to establish the relative Value of different Coins as to provide a Standard of our own by which in future to estimate them. If the Value were now sought they must all be estimated in Dollars because Dollars are called for in the several requisitions of Congress. Without noticing the Preference thus given to one foreign Coin over another it is sufficient to observe that if a greater Alloy should be introduced by the Spanish Government into their Dollars our interior regulations as to Money would be overturned and certainly we have no Security that this will not happen. There is not any great Inconvenience from leaving Matters on their present footing until they can be remedied by the Operations of a Mint for it is not to be supposed that all the Money raised by Taxes in a State is to be brought out of it. I expect that there will be very little Occasion to transport money from Place to Place. It is much easier to negotiate than to carry it and if any Species of Money is generally received within a State at the same Rate in which it is paid in Taxes there will be no Difficulty in expending it at its Value. Whenever Money shall be struck by Authority of the United States then indeed it will be proper to receive in Taxes no other Coin.
If Congress are of Opinion with me that it will be proper to Coin Money I will immediately obey their Orders and establish a Mint. And I think I can say with Safety that no better Moment could be chosen for the Purpose than the present. Neither will any thing have a greater tendency to restore public Credit for altho it is possible that the new Money will at first be received with Diffidence by some Yet when it has been fairly assayed it will gain full Confidence from all; and the Advantage of holding the only Money which can Pay Debts or Discharge [Volume 3, Page 6] Taxes will soon give it the Preference over all and indeed banish all other from Circulation. Whereas fixing a Relation of Value now on whatever Principles attempted might give Offence to the Power whose Coin should in any Instance be reduced from its present numerary Value among us.
The Papers of Thomas Jefferson. Edited by Julian P. Boyd et al. Princeton: Princeton University Press, 1950--.
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