With the ease of today’s credit or debit cards and a seemingly endless supply of change collecting in our desk drawers and back pockets, it can be difficult to imagine that early Americans once did not have enough coins in circulation to complete the simplest of transactions. However, the lack of circulating coinage in early America created consistent difficulties for colonial settlers.
From the concerns of not having the correct change when buying bread to the worry of having to use a hodgepodge of foreign currencies as your medium of exchange, daily commerce in the new United States and the colonies that had preceded her was significantly shaped by the relatively late establishment of the first U.S. Mint.
It was not until 1792 that the first U.S. Mint was established in Philadelphia, with the first official coinage not being produced by that facility until 1793. Up until that point, and even for a few years following as the infant Mint slowly ramped up production, a ragtag variety of coinage issued by states or colonies, foreign coins, and tokens circulated with varying degrees of success.
Without a standard system of coinage produced by a central facility, transactions were carried out with whatever was on hand or had been imported from England, Spain, and other trading nations. This included silver dollar-sized Spanish 8 Reals, a wide assortment of English coins, pieces produced by individual states such as New Jersey Coppers, and more. Even with this assortment of coins in circulation, the hard money needed was not always available. Thus, a significant amount of day-to-day business was transacted on a barter basis instead.
These issues began with the earliest colonial settlers and continued on until well after the U.S. Mint first opened its doors. In October 1640, John Winthrop, the first governor of the colony of Massachusetts, wrote:
The scarcity of money made a great change in all commerce. Merchants could sell no wares but for ready money. Men could not pay their debts though they had enough, prices of lands and cattle fell soon to the one half and less, yea to a third, and after one fourth part.”
As you can see, the challenges were significant and even began to affect market prices for various goods. States such as New Jersey and Massachusetts attempted to alleviate this problem somewhat by authorizing the production of their own coinage. Vermont and Connecticut also produced copper coins, but even this was not enough. However, such pieces are highly collectible today and are widely enjoyed by collectors for their historical value, quaint methods of production, and fascinating designs.
It was with great promise, then, that the U.S. Mint began striking the first official American coins in 1793, nearly 20 years after the new country’s independence. Realistically, it took time before the amount of coins produced by that facility was significant enough to assuage the paucity of circulating coinage. However, this important step began what would eventually become a state of relative financial normalcy in the United States, laying the groundwork for the ease of commerce that we have achieved today.
By Sarah Miller