American Gold

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In 1834 an attempt was made to right the balance between the two metals by reducing the size of U.S. gold coins, and the gold-silver ratio was reset at sixteen to one. This, however, turned out to be a slight overcompensation. Another run on silver coins resulted, so, in 1837, the weight of silver coins was reduced. At the time, American silver and gold coins were still uncommon in general circulation. Until the 185Os various coins were often hoarded or exported for their intrinsic worth, and foreign money and bank notes (sometimes of dubious value) predominated in the marketplace.

Private, independent minting of coins for circulation was legal until 1864—as long as the coins produced were clearly distinguishable from the real thing. At times entrepreneurs thrived on minting gold money, setting up business where gold was plentiful, legal tender was scarce, and the U.S. government was not around to help convert the former into the latter—that is, wherever gold had recently been discovered. The first substantial private minting started after commercial mining began in Georgia during the 1820s. In 1830 Templeton Reid, a gunsmith, established a mint in Georgia. He bought gold from miners and stamped it into coins valued at $2.50, $5, and $10. Before long people discovered that his coins contained less than their face value in gold, and by the end of the year he was out of business. In 1838 the government opened its own mints in Dahlonega, Georgia; Charlotte, North Carolina; and New Orleans. All three operated until the Civil War.

The discovery in January 1848 of gold at Suiter’s mill, on the American River in California, opened a rich chapter in the history of gold coins as well as of gold itself. In 1848 and 1849 the average gold seeker mined an estimated ounce a day, about fifteen dollars’ worth in San Francisco. More fortunate or energetic prospectors often made one hundred dollars a day, and reports of one thousand dollars a day were not unusual. At first most business was transacted in gold dust, traded by weight. Money was scarce, and the nearest government mint, in New Orleans, was more than a month’s travel away. But before long an assortment of bankers, assayers, and entrepreneurs began making their own coins. By late 1849 there were more than half a dozen mints in San Francisco, and gold was also being minted in Oregon City, capital of the Oregon Territory, and Salt Lake City, where the official Mormon currency, designed by a team that included Brigham Young, was manufactured in a little adobe building.

The Confederacy managed to mint a few gold coins—all stamped “United States of America.”

In 1851, after California had become a state, the United States Assay Office of Gold, a sort of provisional federal mint, was opened in San Francisco under the direction of a former watchcase maker, Augustas Humbert. It stamped out ten-, twenty-, and fifty-dollar gold pieces, but bureaucratic confusion prevented their being accepted by the United States Customhouse in the same city. Private coiners—those not discredited by distributing underweight coins—continued their activities unharassed. From 1849 through 1855, numerous businesses produced gold pieces that were circulated around California. Today these coins are extremely rare and highly valued; in 1852, gold was so common that some firms even used it to make minute twenty-five- and fifty-cent pieces. In 1854 Congress established a full-scale mint in San Francisco.

Paper money, in the form of notes issued by banks, became more and more common as the century progressed, and American coins finally began to be universally accepted by the 1840s. In 1849, the government added to its $2.50, $5, and $10 denominations new gold coins worth one dollar and twenty dollars. The former were devised as a less cumbersome alternative to the bulky silver dollar; the latter were invented for large transactions and as a simpler way of turning gold bullion into coin.

In 1854 the mint added a three-dollar gold piece. Its authorization had been tacked onto a bill reducing the amount of silver in coins of less than a dollar—in effect making them little more than tokens and moving the nation toward a single gold standard. The United States now manufactured gold coins in no fewer than six denominations. The three-dollar coin may have been intended to facilitate the purchase of three-cent stamps and coins by the hundred. It never caught on and was discontinued in 1889.

Gold strikes in Colorado in the late 1850s engendered a wave of private coinage in that territory, including some ten- and twenty-dollar pieces bearing a likeness of Pikes Peak. A federal mint was soon authorized for Denver. In 1870 a Carson City U.S. mint opened its doors. It coined some gold, but its chief product was silver; it lasted until 1893.