DECIEAL COINAGE : TICE UNITED STATES SYSTEM.
British Huecum, let January 1856. Stn—In a former letter, I gave a short account of the introduction of the present system of coinage and accounts into France : I shall now proceed to give an outline of the history of the change of system which took place in the United States of America shortly after their separation from Great Britain.
At the period immediately preceding the separation, although accounts were kept in pounds, shillings, and pence, as in England, there were scarcely any English coins in circulation, and the few that actually passed current were either local coins or dollars, and other smaller Spanish coins. The chief currency was in notes of a greatly depreciated value; and the en- tire circulation of Spanish coins, local coins, and notes, differed extremely in value, " both as to time and place, seldom being the same in two differ- ent provinces at a time and often changing in value at the same place." I may cite, as one instance of this depreciation that "the currency of Rhode Island between the years 1744 and 1752 fell from 450/. currency to 2000/. currency for 100/. sterling." But, with all this variation and depreciation, Wright, in his American Negotiator, observes—" It may be of use to some readers to note that, whatever degree the depreciation of the currencies of the Colonies may have been at, the denominations of pounds, shillings, pence, and farthings, have been retained, although they have none of the money among them of these denominations."
To remedy this most unsatisfactory and utterly confused state of their coinage and accounts, which was in no degree improved during the Revolu- tionary war Thomas Jefferson, afterwards President, prepared for Congress, in 1784, " Notee on the establishment of a Money Unit of a Coinage for the United States" ; in which he says, "My proposition is, that our notation of money shall be decimal, descending ad libitum of the person noting ; that the unit of this notation shall he the dollar; that coins shall be accommo- dated to it from ten dollars to the hundredth of a dollar." He founds this proposal on the fact of " the dollar" being " a known coin, and the most familiar of all to the minds of the people : it is already adopted from South to North, has identified our currency, and therefore happily offers itself as a unit already introduced." " Happily, the dollar is familiar to them all, the different provinces,) and it is already as much referred to as a measure of value as their respective provincial pounds. The tenth "is a coin (the half pistoreen) perfectly familiar to us all ; the hundredth or copper will differ little from the copper" or penny now in use. It may be observed, although it does not appear to have been noticed at the time, that the coin- age here recommended is identical with that which had long been and still is in use at &me.
In 1785, Congress declared—" The denominations of money of accounts as they are by law required to be used in the public offices and in all judi- cial proceedings in the United States are dollars, (the dollar being the unit,) dimes or tenths, cents or hundredths, and mills or thousandths of a dollar." "For the time being, the gold and silver coins of Great Britain, France, Spain, and Portugal, are allowed to be legal tenders in payment of all debts and demands within the United States at the several rates following." Such was the inauguration of the new system, and such were the grounds on which it was justified and proposed.
In his "Report on Money, Weights, and Measures," presented to Con- gress in 1790, Mr. Jefferson observes—" The experiment made by Congress in 1786, by declaring that there should be one currency of accounts and pay- ments throughout the United States, and that its parts and multiples should be in a decimal ratio, has obtained such general approbation, both at home and abroad, that nothing seems wanting but the actual coinage to banish the discordant pounds, shillings, pence, and farthings of the different States, and to establish in their stead the new denominations." In 1794 half-dol- lars were issued, and in 1795 the gold and silver coins required to complete the series ; and they were reissued in the next and subsequent years. But the progress of the system does not appear to have been rapid even after the issue of the coins, and the confusion still seems to have been very great. Thus, in a report presented to Congress in 1821 recommending the intro- duction of decimal weights and measures, Mr. John Quincy Adams gives the following account of the state of the coinage—" At the close of the war of Independence, we found ourselves with four English words, pounds, ehillings„penc ,e and farthings, to signify all our moneys of account ; but though English words, they were not English things, They were nowhere sterling, and scarcely in any of the States of the Union were they the representatives of the same sum. It was a Babel of confusion by the use of four words." " It is now nearly thirty years since our new money of account, our coins, and our mint, have been established. The dollar, under its new stamp, has preserved its name and circulation ; the cent has become tolerablyy familiarized to the tongue, wherever it has been made by
work of absolute necessity. 2. That they chose for the unit of their new system the dollar, "a known coin, the most familiar of all to the minds of the pece)le," and "identified with their currency" • retaining as its mallet division the copper coin that was most universally current in the States. 3. That with these great apparent advantages, and in spite of the slight- ness of the change, at the end of thirty-five years from the adoption of the "experiment" by Congress, and of thirty years from the actual issue of the new coinage, although accounts seem to have been generally kept in accordance with the new system, the circulation was still in a most confused and unsatisfactory condition, varying in value in the different States ; and that some of the denominations of the new system (the dime and the mill) had not come into use. We know further, that five-and-thirty years later, that is to say seventy years after the adoption of the system, these two coins, which were proposed to make the system " theoretically perfect," had not been brought either into accounts or into circulation ; and that shillings and sixpences are still spoken of as the current prices of articles in the different States, although no English coins of those denominations have been in cir- culation for nearly a century, and the names are applied to coins of very different value from the English. For a long period the people of Canada laboured under similar evils to those which afflicted the United States. To remedy these, the English Go- vernment made an effort to induce them to coin pounds sterling, and Sir John Herschell recommended them to adopt a pound of two hundred Eng- lish pence. But their intimate commercial relationship with the United States prevailed over all other considerations, and, shortly after their great political outbreak, they adopted the American system ; this change being greatly facilitated by the circumstance that the pound currency of Canada was of less value than the pound sterling in the proportion of 11. 4s. 6d. currency to 1/. sterling, and consequently the 11. currency was nearly equal to four United States gold dollars.
The United States of America, France, and Canada, are, as far as I ant aware, the only countries which have voluntarily changed their system of coinage and accounts from a mixed to a decimal system ; for in Holland, Belgium, Switzerland, and the part of Italy in which such a change has taken place, it must be regarded (however beneficial it may have been in some of these instances in replacing confused, conflicting, or depreciated local coinages) as a badge of conquest enforced by the despotic will of the elder Napoleon. In America and France the alteration took place name- diately after their Revolutions, when the minds of the people were prepared for great changes in their habits and customs ; and it was at the same time justified and facilitated by the confused state of the cm-rency, the coins of account having almost wholly disappeared from circulation, and their place being supplied by paper of a very depreciated character, or (as in America) by local and exotic coins. Yet with all these advantages of urgency, facility, and preparation of men's minds for change, and although more than half a century has elapsed since the change was completed, we find a large por- tion of the people of both countries still wedded to the old names and the old ideas. Let me here observe, as a matter of considerable importance, which has not received its due weight in the consideration of the question, that practically there is very little difference between the American and the French system of decimal coinage ; for, although in France, Belgium, Switzerland, and Sardinia, accounts are kept in francs or lire, yet in all these countries the most important coin of commerce, the five-franc or five- lira piece, is nearly equivalent to the American dollar; and it is this coin which is most carefully preserved of its full weight, and attended to with the same care as the weight of the .gold coin among ourselves. Again, the choice of the American unit seems to have been most wise, when we consider the important position which the Spanish dollar has con- stantly held in commerce, apparently on account of its abundance, the uni- form purity of its silver, and the convenience of its size as a medium of ex- change, which, as Sir John Bowring justly observes, "gives it the best claim to be adopted as the groundwork of any general legislation with respect to a general system of coinage and accounts." This has been, I think, suf- ficiently proved by the experience of other nations ; almost all having adopted a coin nearly similar in value, whatever in other respects may have been their special system of coinage or accounts. Thus, according to the official report of the United States Assayers—
The Roman seeds and the Brazilian piece of 1200 rees are nearly identical in value.
The Baden crown is 7, the Bavarian crown 61, the Tuscan Leopoldine, and Norwegian rix-dollar 5, the Danish species-dollar 44:, and the Swedish species-dollar 4 per cent more valuable ;
The Austrian rix-dollar is 3, the Egyptian 21-piastre piece 4, the Saxon species-dollar 4, the French, Belgian, and Swiss 5-franc and Sardinian 5- lira piece 7 per cent less valuable than the American dollar. Such being the case, and the Spanish and American dollar being of the average value of fifty pence sterling, this latter relation gives a peculiar value to the penny and tenpenny system of decimal coinage and accounts, inasmuch as it places the English coinage in direct international harmony or relationship with the decimal coinages of France and America, and also with the most important non-decimal commercial coins of the North of Europe, Germany, and other countries.
In conclusion, I may observe that it has been repeatedly stated by the advocates of the pound and mil scheme of decimal coinage, that the intro- duction of a decimal system with a smaller unit than a pound would tend to introduce a silver standard, and thus to endanger our present gold stand- ard. . Now, although France has at the present moment a silver standard of value, and at the same time a low unit of accounts, yet gold is daily becom- ing more abundant and gradually displacing a large portion of the silver coin. To such an extent has this change been carried, that we may ere long expect to hear of gold becoming the standard in France; and it must be remembered, too, that France has gold coins, not only of smaller value than any current in Great Britain, namely, the gold piece of five francs, but also of much higher values, as the piece of 100 francs. We may hence conclude without hesitation, that the greater or less value of the unit has nothing whatever to do with the metal employed as the standard of value ; and that as a country increases its commerce, it naturally finds the more valuable and least fluctuating metal to be the best standard of value. It is well known, that not only foreign countries, but even some of our own depend- encies in the East and West Indies, now have and always have had a silver standard, and that England had a silver or mixed standard up to the year 1717. The change was brought about Pith us by the increase of our com- merce ; and I have little doubt that we shall ere long see France, for the same reason, follow in our steps, and adopt gold as the standard of value.
Since this letter was written, I perceive that the gentleman who first charged the advocates of a small unit with the desire thereby to effect an alteration in the standard, has himself, in a communication to the Journal of the Society of Arts, expressed an opinion that not only France, but Ger- many also, whose monetary transactions are conducted by a small silver unit, are rapidly approaching to a gold standard. It is to be hoped, there- fore, that he has ceased to be haunted by the idea of a necessary connexion between a small unit and a silver standard.
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