1   Introduction

1.1 The Origin of the Denomination

A silver coin with a value of twenty cents, also known at the time as a double disme1 , was among those pieces first proposed to Congress to be coined by a new national mint. The Mint began striking copper cents and half cents in 1793, half dismes, half dollars, and dollars in 1794, and it was not until 1796 that other fractional silver coins were produced. By this time, however, the double disme had been replaced by a quarter dollar as the piece to sit between the disme and half dollar. It was not until another 78 years had passed that the twenty-cent piece was considered seriously by Congress in 1874. The following year the denomination was finally produced. Its life, however, was short. Only sixteen months after the law authorizing its production was signed by the President, a bill was introduced to the House of Representatives to repeal the authorization of the Mint to coin twenty-cent pieces. Although its reality as a denomination was brief, several times since the decision to establish the Mint, the idea of a twenty-cent denomination has arisen.

First Attempt

The plight of coinage in the immediate post-revolutionary period was not ideal. Throughout the thirteen states, in addition to paper money and state-issued copper pieces, multiple foreign silver and copper coins were used for trade. Not only did each state not use the same domestic or foreign coins, but also the valuations for the same coins differed between many of the states. Congress sought a remedy. On January 4, 1782, Congress appointed a three-member committee to determine the value and weights at which the circulating foreign coins in the states should be received in taxes by the Treasurer. Three days later the committee reported to Congress and promptly passed the responsibility of this task to Robert Morris, who was the Superintendent of Finance. Congress charged Morris to prepare a report that considered the various values of coinage used throughout the country. Morris submitted a report that was prepared previously by his assistant, Gouverneur Morris2. Both men had shown a keen interest in the current difficulties with coinage in the young country. The report discussed elegantly each aspect of current coinage and included a plan to begin a new form of United States coinage and create a national mint. The coinage plan proposed was intricate, but sound. Most states had determined separately an equivalence between the most common circulating coinage, namely Spanish dollars and English shillings. There was not, however, a mechanism to equate the different valuations between the states, which became Morris’ task. In the states, Spanish dollar valuations of between five and eight shillings were in use. Thus, at any one time in different parts of the country, a Spanish dollar was worth 60, 72, 90, or 96 pence. Morris decided that the best mechanism to create a single prevailing value was to create a coinage based on a common multiple of 1440. Morris calculated that one-quarter grain of pure silver was approximately 1/1440 of a Spanish dollar3 and chose this unit as the foundation of the proposed coinage system. This smallest unit did not have to be represented with a coin as long as the value was known.

As a means to unite the various valuations of the Spanish dollar across the country, the plan was brilliant. Any Spanish coin from the dollar to the quarter reale or British value from one penny to eight shillings was readily converted. The plan did, however, propose to make a somewhat cumbersome and complicated system even more complex. The plan would be helped if, as proposed by Morris, the English and Spanish coinage would no longer circulate freely. Since the proposed coinage system would be interchangeable equally well with Spanish silver coins and English currency, the new United States coinage could conceivably drive out the foreign coins.

In February 21, 1782, Congress approved establishing a new national mint and directed Morris to create a plan to establish our country’s first mint. Congress, apparently, was less than enthusiastic about the coinage section of Morris’ report and did not direct him to pursue his unified currency plan any further. Morris expanded on Congress’ directive and, without their permission, began construction of coining apparatus, dies, and by April 2, 1783, silver pattern pieces.

Thomas Jefferson was elected to Congress in June 1783 where he eventually served as chair of the currency committee. Jefferson learned of Morris’ coinage plan and began to contemplate his own currency proposal. Jefferson reviewed the system proposed by Morris and supported the decimal aspect of the system, but believed that the use of the miniscule “quarter” unit and the corresponding mathematics required would be beyond practical use for the common person. In fact, Jefferson reported that Morris’ system would be inconvenient to apply to simple money transactions, providing an example where a 10,000 dollar sum under Morris’ new plan would require eight figures to express it, namely 14,400,000 units. Small purchases under one dollar would necessarily be transacted in multiples of the minute fraction, in other words the dollar was to be divided into 1440 units. Jefferson believed, and ultimately convinced Congress, that Morris’ system would be too cumbersome and inappropriate as a national coinage4. Jefferson held that the use of the Spanish dollar as the standard unit along with decimal subsidiary coins would be easiest for the public and allow for the simplest transition from foreign coins. Furthermore, Jefferson did not support the creation of denominations that were not similar to those currently used in trade. Interestingly, Morris’ plan was designed to drive out the Spanish and English coins that were in use, so it was likely irrelevant that new denominations would coexist with the foreign coins, even for a short while.

Jefferson proposed a bimetallic standard, using a market ratio of gold to silver of 15 to 1. He suggested that the Spanish milled dollar to serve as the standard unit and smaller silver pieces were subdivided on a strict decimal basis. Coins larger than a dollar were to be made of gold and in multiples of the dollar unit. Jefferson estimated that the average Spanish dollar contained approximately 365 grains of fine silver and proposed that his unit, or dollar, be of that weight and smaller silver pieces be an appropriate division of the unit dollar. A “hundredth” of a dollar copper piece was also recommended as a replacement for the various pennies that were used in the states. Although Jefferson did recognize that it was impossible to create such a copper piece that would be equal to the pennies used in all states. Jefferson supported his bimetallic system by suggesting that his gold coin was similar to British and Portuguese coins already in use and that the silver dollar was similar to the Piece of Eight and its bits.5

In Jefferson’s plan to create the first national coinage, the twenty-cent piece has its genesis. Among the decimal coins, Jefferson proposed that a fifth or pistereen6 denomination containing 73 grains fine silver be created. The reason for the fifth of a dollar was probably due to the use of Spanish pistareens and French livres that circulated at an approximate value of one-fifth of a Spanish milled dollar. Also, many contemporary foreign countries issued subsidiary silver pieces that carried a value of one-fifth. The proposed “fifth” however, was not equivalent to the more commonly used Spanish two-reale or English shilling, which were both valued at one quarter of the Spanish milled dollar. Jefferson had extensive knowledge of the current coinage problems and was adept at monetary issues of the day. So it is unclear why he chose to support his decimal fractions of the silver dollar by equating them with the Pieces of Eight and its bits, when clearly at the time, a “quarter” was a more appropriate decimal piece than a “fifth.”

Robert Morris did not embrace Jefferson’s plan. Among other problems, Morris argued that the copper “hundredth” was too large for the smallest transactions and that a smaller piece was needed.7 Furthermore, Morris argued that decimal accounting based on the Spanish milled dollar would not routinely express English farthings without a remainder and thus become a burden for merchants. Morris also expressed that under Jefferson’s plan, his new coins would not drive out the foreign silver or copper pieces currently used in trade.

The clear element of the current coinage problem was that no system of new coinage could have been devised that would both simplify and account for different valuations between the states. Neither of the well-conceived plans of Morris or Jefferson were without some measure of difficulty, but one plan was soon to become the favorite of Congress.

On May 13, 1785, a Grand Committee consisting one member from each of the thirteen states submitted a report to Congress concerning the establishment of a national mint and a new coinage system. The report began by discussing Morris’ plan, but the committee found that the creation of a coin of a value unlike any in circulation was not the best means of creating a uniform national coinage. The committee’s report then embraced Jefferson’s plan with minor modifications. The committee recommended that the largest coin be reduced to a five dollar gold piece and that a “one two-hundredths” copper coin be added. The report called for a reduction in the amount of fine silver in the dollar, from 365 grains to 362 grains. The committee also did not support Jefferson’s fifth and replaced it with a quarter dollar. The exact reason for this latter change remains unknown. The committee may have reasoned that even though Spanish pistareens and French livres were circulating at a value of twenty cents, the Spanish double reale and English shilling were more commonly used in trade and had a nominal value of twenty-five cents.

Nearly two months later, on July 6, 1785, Congress formally accepted the plan of the Grand Committee resolving that the monetary unit of the United States would be the dollar, the smallest coin would be a copper “two-hundredths” piece, and silver pieces less than a dollar would be of a decimal ratio of the dollar. This marked the first time that a nation had officially adopted a decimal coinage system. Since Robert Morris’ resignation as Secretary of the Treasury at the end of 1784, the balance of the planning necessary for the mint was given to the two-member Board of Treasury. The Board reexamined the coinage issues and on April 8, 1786, presented Congress with three alternate plans with contrasting silver dollar weights, different ratios for gold and silver, and variable weights for copper coins that were dependent on the silver dollar weight. The Board also proposed a charge for coining silver and gold pieces. Interestingly, the Board reversed one of the changes that the Grand Committee had done to Jefferson’s plan. Namely, the Board reinstated Jefferson’s fifth instead of the Grand Committee’s quarter dollar.

An additional characteristic of the Board’s report was the introduction of new terms for some of the proposed coin denominations. The gold coins were to be called eagles, due to the eagle design the coins were to bear. The term cent would replace the hundredth and the half-cent would replace the two-hundredth. In addition, the tenth proposed by Jefferson was to be called a disme, and the fifth was to be a double-disme. The Board also introduced a new denomination, the mille, which represented 1/1000 of a dollar and would serve as the nominal unit of the dollar.

On August 8, 1786, Congress proposed the denominations suggested by the Board of Treasury and the twenty-cent piece, now called a double disme, was a feasible coin again. This time the coin contained 75 128/1000 grains of fine silver, exactly one-fifth the silver of the new fixed dollar unit of 375 64/100 grains of fine silver. The existence was to be short-lived, however.

Second Attempt...

1The term disme would later fall out a favor and be replaced with dime.
2No known familial relationship is known between Robert Morris and Gouverneur Morris.
3This was equal to 1/1600 of the British crown.
4It should be disclosed that Thomas Jefferson and Robert Morris were not great supporters of each other, politically. Thus, Jefferson’s attack on Morris’ national coinage plan may contain some requital for earlier difficulties between the two men.
5Bits were a fraction of the Piece of Eight. In order to provide smaller silver pieces, on occasion, Pieces of Eight were cut into smaller pieces approximated two, four, or eight equal, wedge-shaped pieces.
6Various spellings of “pistareen” exist in contemporary writings.
7In Morris’ original plan, his smallest copper piece would have a value as small as 1/5 of a penny in some states.

Copyright © 2013-2014, by Lane J. Brunner and John M. Frost, All rights reserved.