temptations to the commission of fraud, and of consequence, the
practice of counterfeiting is coeval with that of coining. No
government can guard its subject 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 least effectual where the coins are so numerous,
that the knowledge of them being 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 everybody'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 anywhere 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 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 expenses 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 twentyone 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, 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, or 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.
Although 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 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 that 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 purchases fifteen ounces 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. 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 a half
of silver for one of gold, although the legal standard might still be
in the one place fifteen and in the other fourteen.
The demand which commerce might make for any 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 was paid in the coin of greater or less
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 lose 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 show, that the scale by which everything
is to be measured ought to be as fixed as the nature of things will
admit 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 its trade,
although 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 everything 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 reflections 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 be preponderate, because it weighs
alike against every other metal.
To coin money is a certain expense, and of course it is an expense,
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
expense of coinage is paid by the Crown, and of course 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 per 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 expense 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 it 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
just been 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 to 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
lose proportionably.
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 per cent. When bullion is below ninetytwo, it is carried to the
mint; when above ninetytwo, to the broker, or the silversmith. The
coin still continues fixed, nor will it bear exportation until bullion
rises to a 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 percent coinage, it
would be necessary that the mint price should be ninetytwo. The coin,
therefore, could not long be exported, if at all, but would resume its
value. The price of bullion must float between ninetytwo and a
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 it, just as much 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 coin,
which would involve an unnecessary national expense, and also to
prevent the imitation of it abroad, so as to create a national loss.
For both of which purposes, it is proper that the coinage should only
defray the expense, 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 although it is not absolutely necessary,
yet it is very desirable, that money should be increased in 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 the people.
Wherever such things require much labor, time, and reflection, the
greater number who do not know, are made the dupes of the smaller
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, and in all the other States, excepting South Carolina,
at seven shillings and sixpence, and in South Carolina at thirtytwo
shillings and sixpence. The money unit of a new coin to agree, without
a fraction, with all these different values of a dollar, excepting the
last, will be the fourteen hundred and fortieth part of a dollar,
equal to the sixteen hundredth part of a crown. Of these units,
twentyfour 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,
excepting South Carolina, and fortyeight will be thirteen pence of
South Carolina.
It has already been 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 New 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 twentyfive grains of fine
silver, to which may be added two grains of copper, and the whole
would weigh one pennyweight and three grains. Five of these would make
a _Quint_, or five hundred units, weighing five pennyweight and
fifteen grains; and ten would make a _Mark_, or one thousand units,
weighing eleven pennyweight and six grains.
If the mint price of fine silver be established at twentytwo thousand
two hundred and thirtyseven units per pound, this being coined would
be four times five thousand seven hundred and sixty grains, or
twentythree thousand and forty units. The difference is eight hundred
and three units, and therefore the coinage is eight hundred and three,
or twentythree thousand and forty, or somewhat more than three
fortyeight one hundred per cent, which would be about the expense
attending it. A dollar contains by the assays, which I have been able
to get, about three hundred and seventythree grains of fine silver,
and that at the mint price would be fourteen hundred and forty units.
In like manner, if crowns contain from four hundred and fourteen to
four hundred and fifteen grains of fine silver, they would, at the
mint price, be worth sixteen hundred 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 of one 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 in 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 anything have a greater
tendency to restore public credit; for although 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 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.
These sentiments are submitted, with all possible deference, to the
United States in Congress assembled, in expectation of their further
instructions on the subject.
With great respect, I have the honor to be, &c.
ROBERT MORRIS.
* * * * *
GEORGE WASHINGTON TO ROBERT MORRIS.[3]
Philadelphia, January 25th, 1782.
Sir,
I have received your favor of the 23d respecting Captain Hutchins, and
shall give you a more definitive answer after I have seen that
gentleman.
[3] _January 26th._ In consequence of the information received
from Mr Thomas Paine, of the intentions of some officers to
promote a general application by way of memorial to General
Washington, respecting their pay, I sent for him and had a long
conversation on various matters of a public nature. He observed,
that his services to the public had rather been neglected. I told
him I could wish his pen to be wielded in aid of such measures, as
I might be able to convince him were clearly calculated for the
service of the United States; that I had no views or plans but
what were meant for the public good, and that I should ask no
man's assistance on any other ground; that it was true I had
nothing in my power at present to offer, as a compensation for his
services, but that something might turn up, and that I should have
him in my mind.--_Diary._
* * * * *
The following record is also contained among Mr Morris's papers,
in his own hand writing, dated February, 1782.
"Having lately had several meetings with Mr Thomas Paine, the
writer of a pamphlet, styled _Common Sense_, and of many other
well known political pieces, which, in the opinion of many
respectable characters have been of service to the cause of
America, I thought this gentleman might become far more
serviceable to the United States by being engaged to write in the
public newspapers in support of the measures of Congress and their
Ministers. My assistant, Mr Gouverneur Morris, is clearly of the
same opinion, and in all our conferences with him, we have
pointedly declared, that we sought the aid of his pen only in
support of upright measures and a faithful administration in the
service of our country. We disclaim private or partial views,
selfish schemes or plans of any and every kind. We wish to draw
the resources and powers of the country into action. We wish to
bring into the field an army equal to the object for which we are
at war. We wish to feed, clothe, move, and pay that army as they
ought to be done, but we wish also to effect these on such terms
as may be least burdensome to the people, at the same time that
the operations shall be every way effective.
"Having these for our objects we want the aid of an able pen to
urge the Legislatures of the several States to grant sufficient
taxes; to grant those taxes separate and distinct from those
levied for State purposes; to put such taxes, or rather the money
arising from them, in the power of Congress, from the moment of
collection;
"To grant permanent revenues for discharging the interest on debts
already contracted, or that may be contracted;
"To extend by a new confederation the powers of Congress, so that
they may be competent to the government of the United States and
the management of their affairs;
"To prepare the minds of the people for such restraints and such
taxes and imposts, as are absolutely necessary for their own
welfare;
"To comment from time to time on military transactions, so as to
place in a proper point of view the bravery, good conduct, and
soldiership of our officers and troops, when they deserve
applause, and to do the same on such conduct of such civil
officers or citizens, as act conspicuously for the service of
their country.
"Finding Mr Paine well disposed to the undertaking, and observing
that General Washington had twice in my company expressed his
wishes, that some provision could be made for that gentleman, I
took an opportunity to explain my design to the General, who
agreed entirely in the plan. I then communicated the same to Mr
Robert R. Livingston, Secretary of Foreign Affairs, and proposed
that he should join me in this business, by furnishing from his
department such intelligence, as might be necessary from time to
time to answer such useful purposes for which Mr Paine is to
write; and in order to reward this gentleman for his labors, and
enable him to devote his time to the service of the United States,
it was agreed to allow him eight hundred dollars a year, to be
paid quarterly. But it was also agreed, that this allowance should
not be known to any other persons than those already mentioned,
lest the publications might lose their force if it were known that
the author is paid for them by government."
By a letter, which General Lincoln addressed, to me before he went to
the eastward, I find that you approve of my plan of sending officers
to the four New England States particularly, with the returns of their
deficiencies of troops, and with instructions to attend upon the
Legislatures, and to endeavor to impress them with the expediency, and
indeed necessity, of filling their battalions previous to the opening
of the campaign. He informed me also, that you would be glad to give
the same officers some instructions relative to the business of your
department. If so, I could wish you would have your letters ready to
go by the next post, by which time I expect to have the returns
prepared. I have not yet fixed upon the gentlemen who will be proper,
but you can leave blanks for the insertion of the names of those who
may be chosen.
As we may reasonably expect to hear soon again from Sir Henry Clinton,
on the subject of the meeting of commissioners, I think it would be
well to be preparing the substance of the powers to be delegated to
the gentlemen to whom the transaction of the proposed business will be
committed. What I would wish you to prepare particularly, is so much
as will relate to the liquidation of the former accounts of prisoners,
and making provision for their maintenance in future.
I have the honor to be, &c.
GEORGE WASHINGTON.
* * * * *
TO THE PRESIDENT OF CONGRESS.
Office of Finance, February 11th, 1782.
Sir,
The situation of my department makes it necessary to lay some matters
of importance before the United States in Congress, and I shall
endeavor to do so with as much precision, as possible.