Golden Begining: 1795 Marked First U.S. Gold Coins

By R. W. Julian, Coins Magazine December 21, 2010

This article was originally printed in Coins Magazine.
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Prior to the American Revolution there was not all that much coined money in what is now the United States. There was some silver, mostly Spanish from mints such as Mexico City, but virtually no gold. What little gold did arrive in the Colonies came from the ships trading with the Spanish provinces in the Americas.

The gold that did come to our shores usually left nearly as quickly. Merchants advertised in the newspapers to buy gold coins, usually with silver, and the coins thus gathered up were sent to Britain and the continent to pay for luxury goods wanted by the wealthier colonists.

After 1777 the French government sent gold and silver to the Continental Congress so that the army under Gen. Washington would get some of its needed supplies. The monies so obtained were, however, usually exported to foreign sources for these war materiels.

As early as 1778 the Confederation Government discussed creating a system of coinage, but there was no real money with which to fund a Mint. There was plenty of Continental paper money but its value fell almost on a daily basis and this inflated currency was of no value in such matters. During the 1780s, after peace was declared, fresh efforts were made in the Confederation to establish a mint but the lack of ready funds defeated these ideas almost immediately.

With the creation of the new federal government under the 1787 Constitution, monetary discussions became more relevant. The new government began operations in April 1789 but it was a few months before Treasury Secretary Alexander Hamilton was able to fund the necessary expenses by getting foreign loans, primarily in the Netherlands.

In early 1790 a petition was presented to Congress, asking for a government contract to strike American coins in an English private mint. Congress ignored the request and instead asked the Treasury secretary to prepare a comprehensive report on a mint and coinage. The report was finished in mid-January 1791 and presented to the legislators at the end of the month.

Hamilton and his advisors studied the world’s monetary systems very carefully and decided that the bimetallic standard, where gold and silver are of equal importance, was the best way to proceed. The Amsterdam money market, then the most important in Europe, indicated that the current ratio of silver to gold was 15 to 1, meaning that one ounce of gold was worth 15 ounces of silver.

Using this ratio as a basis, Hamilton then devised the coinage system presented to Congress. He actually suggested only a small number of silver and gold coins. For silver it was to be the dime and dollar while the gold was also to be a dollar as well as a $10 piece (eagle). To have both a gold and silver dollar was an odd choice and one which, in the end, was ignored.

Congress reacted to the report by asking President George Washington to carry out the provisions suggested by Hamilton. The president attempted to do just that but the lack of a written law created problems and in October 1791 he dropped some rather pointed hints to the legislators and the upper chamber responded by appointing a special committee under Sen. Robert Morris to draft the necessary legislation.

Due to some controversial matters in the Senate bill, the House of Representatives proposed alternative language and by March 1792 the latter had carried the day. The compromise bill was signed into law by the president in early April 1792 and the Mint was now well on its way to becoming a reality.

In the end there were three gold coins created by the new law, the eagle ($10), half eagle ($5), and quarter eagle ($2.50). No new denominations would be added to this list until 1849 when the double eagle ($20) and gold dollar were mandated by Congress. That three denominations were created indicates that the solons expected gold to circulate widely in this country under the new coinage law but this did not prove out in practice.

The first year of operations, 1792, was spent in erecting the necessary buildings and obtaining machinery to create the coins. Only a handful of silver coins, all half dismes, were struck in that year. As the year 1793 came ever closer, Mint Director David Rittenhouse understood that gold and silver coins were out of the question for the time being due to the high bonds demanded of the chief coiner and assayer.

Because of the bond requirements Rittenhouse had little choice except to coin only copper in 1793 but the growing criticism over failure to coin the precious metals led him to appeal to Congress to lower the bonds to more reasonable levels. Congress saw the problem and in March 1794 did as Rittenhouse had asked.

As a result of the congressional action, silver coinage began in October 1794 but gold was delayed until a fair amount of silver had been struck. By early 1795, however, the director was able to notify banks and businesses that gold bullion would be accepted for coinage. The first gold deposit, worth about $2,300, was brought to the Mint in February 1795 by Moses Brown, a Boston merchant/importer.

By early June 1795 Rittenhouse was overseeing the work of chief engraver Robert Scot in preparing the first gold coinage dies, for the half eagle. Because the workers had not yet handled gold for coinage the work went slowly and Rittenhouse was not to see the fruits of his labor in gold while he was still in office; he resigned at the end of June 1795 and was replaced by Henry William DeSaussure of South Carolina.

DeSaussure, at the request of the president, expedited the coinage of gold and was able to oversee the delivery of 744 half eagles on July 31. According to a family tradition, DeSaussure kept for himself the first gold piece struck, but a granddaughter later had it made into a ring. (Once the half eagles had been struck in reasonable numbers, the chief coiner used newly made eagle dies to coin the gold $10 pieces stipulated in the law.)

Although the dies were engraved by Scot, little is known about the origin of the designs on both sides. Liberty wears a cap but this is not a Liberty Cap—suggesting a freed slave—but merely a fashionable ladies’ headdress from the 1790s. Some researchers think that the small eagle on the reverse came from an illustration of an ancient Roman coin but this is speculative.

The half eagle of 1795 also exists, in a rare handful of coins, with the heraldic eagle reverse, first used on the gold coinage in 1796. This particular combination of dies, however, was probably not used until 1798 when a shortage of obverse dies forced the coiner to use older dies for a short period of time.

The third of the gold coins in the 1792 law, the quarter eagle, was first struck in late 1796. The reverse of this coin, however, was new to the coinage in that an heraldic eagle is used, taken directly—or nearly so—from the Great Seal of the United States. This was done on the initiative of Mint Director Elias Boudinot, who had succeeded DeSaussure in late October 1795.

The first quarter eagles had no stars on the obverse, an oddity for early U.S. gold and silver coins, but this was rectified with the next obverse die (also dated 1796), used in late 1796 and early 1797. No further significant obverse changes were made, however, through the end of the design in 1807.

The reverse is somewhat more special than it first appears to be. The Great Seal eagle has of course appeared on U.S. coins from time to time, including the Kennedy half dollars, for example, but in 1796 there was an interesting variation.

Part of the reason for the Great Seal being used on the gold—and later the silver—was the normal European practice of putting the national coat of arms on the gold and silver coins. On this level the United States was merely adhering to standard practice.

On the U.S. version, however, the arrows and olive branch are transposed. In peacetime the arrows are in the eagle’s left claw (to the viewer’s right) and the olive branch in the right claw. In 1796, however, perhaps at the suggestion of the president, the arrows and olive branch were switched, indicating preparation for war.

This alteration could not have been an error by chief engraver Scot as Director Boudinot was well versed in heraldry and was president of the Confederation Government when the Great Seal was adopted in June 1782. (Boudinot was also on the special select committee which finalized the Great Seal design.)

The European government leaders were equally well acquainted with heraldry and the message would have been clearly understood. In particular Great Britain, in open defiance of the Treaty ending the Revolutionary War, had kept control of the upper Midwest until the mid-1790s and even in 1796 was still reluctantly withdrawing some of its troops and Indian agents from that area.

Boudinot was something of a strict taskmaster when it came to the quality of the coinage. On June 20, 1796, he posted a notice reading as follows: “The Director having had frequent complaints that the coin, both gold and silver lately struck in the mint, have been done in a very slovenly, unworkman-like manner, has examined a number of them and is sorry to find that the complaints have not been without foundation, and great negligence and inattention is charged on the coinage department, with regard to the late deliveries of coin. He therefore expects that in the future greater care will be taken that no coin is passed through the mint without being executed in a more perfect manner, as a comparison of the former and latter coin does great discredit to the officers of the mint concerned with the coinage.”

As time allowed, engraver Scot prepared heraldic eagle dies for the gold eagle and half eagle denominations. Die were not made as at present, however, but rather with a small series of hubs. The eagle’s tail feathers, for example, were on one hub, the head on another, and so on. Obverse dies were also made from a series of small hubs.

It is interesting to note that the hubs used for the dies were also meant for other denominations. The half eagle dies, for example, shared these reverse hubs with the quarter dollar dies starting in 1804 while the eagle hubs were also used for reverses of half dollars struck after 1800. Finishing the trio, the quarter eagle reverses matched up with the dime.

Gold coinage was anemic in 1796 and 1797, as merchants and importers had little gold to bring to the Mint but this situation improved in 1798. The director persuaded the Bank of the United States, the semi-official central bank for this country, to bring foreign gold and silver coins to the Mint for recoinage into American monies. This agreement was not as difficult to obtain as might be thought, as Boudinot was an influential director of this bank.

Although gold coinage remained reasonably strong after 1800, it was concentrated primarily in eagles and half eagles. By 1802 Boudinot had become concerned about the gold eagles and silver dollars leaving our shores, never to return. (The gold went to Europe, the silver to the Orient, especially China.)

By 1803 Boudinot was sufficiently alarmed to suggest to the government that coinage of the eagle and the silver dollar be stopped, thus ending the exportation of these two denominations. In 1804, apparently on his own authority, the director did just that.

In order to make this decision more palatable, Boudinot persuaded the Bank of the United States to formally request this cessation of coinage. On that basis Secretary of State James Madison later (1806) issued a formal proclamation.

Because of low demand—and equally low mintages, the quarter eagles of 1796 through 1807 are relatively difficult to find and fairly expensive, especially in the higher grades. In some years (1802 and 1804) reverse dies from the dime coinage were also used for the quarter eagle, the sizes being virtually the same. The scarcest issue of this short-lived series is the 1804 with 13 stars above the eagle. (The 14-star reverse of this date is the more common of the two varieties.)

In general, though there are rare dates, the eagles and half eagles with the heraldic eagle reverses can be obtained without too much trouble, though far from inexpensive. For the eagle the dates of 1799 and 1801 are the easiest to obtain while for the half eagle collectors will have little trouble purchasing several dates, including those from 1802 to 1807.

The halt in eagle coinage did not solve the problem of gold leaving the country. Half eagles left just as fast and by 1805 even Boudinot realized that there was little more that could be done. The problem was made worse by the fact that the international ratio of gold to silver, which had been 15 to 1 in 1792, had moved to about 15.5 to 1 after 1800, meaning that American gold was undervalued with respect to silver and thus in constant demand for export.

The only real solution to this problem was for Congress to change the ratio of gold to silver by amending the 1792 law. Despite constant complaints by knowledgeable people about the situation nothing was done until June 1834, thirty years after Boudinot tried to stop the outflow of gold by halting the coinage of eagles.

A new mint director, Robert Patterson, was appointed by President Thomas Jefferson in 1805 and one of his pet peeves was the artwork on the coins. It had been approved by the administrations of George Washington and John Adams and Patterson felt that Jefferson’s new government deserved a different style of coinage design. To this end he persuaded Jefferson to hire John Reich as an assistant engraver and the result was a new face for Liberty and a revised eagle, both for the gold and silver.

The old Federalist designs of the 1790s were no more after 1807 but modern collectors are still able to appreciate the beauty of our early coinage.