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Interest grows for quarters minted from 1796 to 1807

 The United States quarter dollar was based on the Spanish coin of 2 reales.

The United States quarter dollar was based on the Spanish coin of 2 reales.

With the introduction in 1999 of the State quarter dollars and the later America the Beautiful series, there has been a gradual but continuing growth of interest in the earlier dates of this denomination. The fine series of Seated Liberty quarters has always created interest, but at present this increased demand is more focused on the earlier pieces, dating back to the first quarter dollars of 1796.

It is well known that the quarter dollar created by the 1792 Coinage Act was originally based on the Spanish silver coin of 2 reales. There were 8 reales in the Spanish dollar, making the 2 reales exactly one-quarter of the larger coin. During the 18th century, American colonists along the East Coast used these 2-reales pieces to purchase the necessities of life.

During the American Revolution, there was little coined money to be seen because of widespread hoarding. The ever-present paper currency soured the public on this kind of money, but there was little choice as long as the war lasted. Victory came in 1781 at Yorktown, but it was not until 1783 that a formal peace treaty was signed.

The American government in 1783 was a far cry from that of today. The Confederation Congress, as it was known after 1778, had little real power and was chronically in debt, barely able to pay the few employees that it had. The Treasury, under Finance Minister Robert Morris, made an attempt to create a monetary system but failed because the government was unable to fund the project.

During the 1780s, the Spanish silver coin once more came to dominate the American marketplace, although the poverty of the nation meant that less coinage was seen than before the Revolution. This led to public demands for a stable monetary system, but little was done; laws were passed in 1786 to create a mint and coinage but were a dead letter once the ink had dried. There was no money in the public treasury.

The creation of the new federal government in early 1789, with George Washington as first president and Alexander Hamilton at the Treasury helm, meant that in due course there would be an American monetary system. However, Hamilton had more pressing problems in that he needed to borrow large amounts of money to fund the new government, and until there was a reasonable supply of ready funds, little could be done about other serious problems.

Hamilton obtained his loans in Holland, about the only country with bankers willing to take a chance on the new republic. There was little chance of obtaining money in Great Britain, as that entity did not wish the American experiment to succeed, while France was even then teetering on the verge of bankruptcy.

In March 1790, Congress asked the Treasury for a comprehensive report on a mint and coinage. Hamilton firmly believed that the United States needed a stable currency to create conditions for the rise of business and industry. To this end, he spent several months preparing his 15,000-word report that was presented to Congress in January 1791.

At first Congress did nothing and merely asked the President to create a mint and to begin coinage on the basis of the Hamilton report. Washington tried to do just that but finally realized the futility of the effort without a detailed law and made pointed remarks to legislators to this end in the fall of 1791.

The Senate took the hint and, within a short time, a special committee chaired by Robert Morris was appointed to write the necessary draft legislation. Morris and his fellow Senators were independently minded and struck out on their own for some of the coinage regulations, ignoring what Hamilton had to say in certain cases.

In particular, the Treasury secretary had suggested only two silver coins, the dollar and the dime. (During the 1780s, when the Confederation was considering a monetary system, that body had enacted a 20-cent piece into law rather than a quarter dollar. There had been good reasons for doing so in 1786, but in 1791 the Senate committee thought otherwise, and the quarter dollar was created by some long-forgotten member of that group.)

By the end of 1791, the proposed bill had been finished and presented to the Senate. That body adopted the committee legislation virtually intact, but the House of Representatives disagreed with several provisions, including the use of the president’s portrait on the gold and silver coins. At length, in early April 1792, there was final agreement between the two bodies, and the President signed the bill into law. The quarter dollar was now part of the monetary system.

The rest of 1792 would see the government organizing the new mint and preparing for coinage. David Rittenhouse, the foremost scientist in America, was appointed the first director, and he in turn chose Henry Voight to be the chief coiner. Voight oversaw the construction work on the new mint in the summer and fall of 1792.

There exist pattern quarter dollars dated 1792, but little is known about them except that the dies were engraved by Joseph Wright at the request of his friend, Rittenhouse. Wright died in September 1793, a few weeks after signing on as mint engraver, but just when the dies were cut has remained a mystery. Only a few soft-metal pieces were struck because the dies broke in hardening.

Due to high bond requirements for the chief coiner and assayer (Albion Cox), it was not until October 1794 that the first regular silver coinage of dollars was executed. Congress had lowered bond requirements in early 1794, thus paving the way for a silver and gold coinage as fast as arrangements could be made.

The Mint needed silver and gold bullion to perform its work, and there was no formal government bullion fund until 1837. To encourage deposits, the Mint generally allowed the depositor to determine the denomination of the coin struck from the deposit. For this reason, little else besides dollars and half dollars were struck in silver during 1794 and 1795. The whole aspect of coinage changed in 1796, however, as bullion deposits decreased.

 Mint Director Elias Boudinot

Mint Director Elias Boudinot

 Stuart Gilbert, who designed the Draped Bust head of Liberty.

Stuart Gilbert, who designed the Draped Bust head of Liberty.

Mint Director Elias Boudinot, in office since late October 1795, found himself the subject of increasing criticism from a segment of the population opposed to the Federalist Party and President Washington in particular. Anything that could be found to embarrass the President was used and the Mint, with its high expenses and low output of coin, was an easy target. Yet Boudinot realized that without deposits there was little he could do.

The director was actually faced with twin problems: declining deposits of silver coupled with the need to lay off skilled workmen because of the shortfall in coinage. To get around both difficulties, the director decided that “make-work” mintages were the answer. Rather than coin silver dollars that used up the available bullion too quickly, Boudinot opted for the smaller silver coins, including the quarter dollar.

The director ran the risk of irritating the depositors and thus getting even less bullion. Almost certainly, however, Boudinot explained that they were going to have to do their part in keeping the Mint in operation. If the Congressional critics succeeded in abolishing the institution, there would be no place for merchants and importers to get fresh coinage.

No quarter dollars had been coined in 1794 or 1795 for the simple reason that no one wanted them. This was not due to any defect in the law but rather that a good supply of Spanish 2-reales coins continued to arrive in the United States in the early 1790s and were providing useful service to the public.

 Quarter dollars were first coined in 1796. (Images courtesy of Heritage)

Quarter dollars were first coined in 1796. (Images courtesy of Heritage)

The chief coiner delivered the small number of 1,800 quarter dollars on April 9, 1796. These coins were worth only $450 in all, but in today’s numismatic market, even a well-worn example brings well in excess of that amount. This first delivery was paid out almost completely to Jonas Phillips, a merchant of Philadelphia.

The obverse has one of the most famous designs in American coinage, the Draped Bust head of Liberty. When regular silver coinage commenced in late 1794, the first Liberty Head, now called the Flowing Hair Head, received some criticism, mostly unjustified, but nevertheless there.

According to tradition, first set to print in the late 1850s, famed early American artist Gilbert Stuart was responsible for this new Liberty head. Stuart was a close friend of the President and it seems likely that he offered to redesign the Liberty head on the silver coinage as a service to the country.

The new obverse design was first used on the silver dollar in late September 1795 and then added to the other silver and copper denominations by Chief Engraver Robert Scot as time permitted. The dies for the quarter dollar were probably started in the late winter of 1795–1796, perhaps in February 1796. In line with current Mint practice, Scot added 15 stars to the obverse to indicate the number of states then in the Union.

Scot prepared at least two obverse dies, and perhaps the same number of reverses, for this coinage. It is believed that one of the obverse dies, with the so-called “low 6” in the date, shattered while the 1,800 April coins were being made and was replaced with the second obverse die.

An additional 3,894 quarters were coined in May and June and then nothing until February 1797, when a mere 252 pieces were delivered. The total coinage of the 1796 quarter dollar was thus only 6,146 pieces, small even by standards of the 1790s. Because of the special nature of this first coinage, quite a number of the 1796 quarters were made with a high-quality (prooflike) finish for special purposes, including keeping some on hand at the Mint for tourists and collectors.

There is strong pressure from serious numismatists on this first coinage. Not only type collectors need one for a complete set, but those who acquire quarter dollars by date also want a high-grade specimen. Book value, according to the price guide that appears monthly in Coins Magazine, is a strong $10,750 even in Good 4, but in nearly uncirculated the value will exceed $60,000, a price not for the faint of heart.

In late 1797, when part of the 1796 quarter dollar mintage was yet on hand for distribution, the quantity of silver arriving at the Mint began to climb. During 1798 and 1799, there was a strong coinage of silver dollars that kept the Mint fully occupied. Director Boudinot had no need of make-work coinages under such circumstances, and no quarter dollars were therefore struck for several years after 1796.

 1804 quarter dollar. (Images courtesy of Goldberg)

1804 quarter dollar. (Images courtesy of Goldberg)

During 1800, the amount of silver bullion brought to the Mint once more began to decline. This time, director Boudinot met the problem with both an old and a new solution. He started to again coin the smaller denominations, except for the quarter. He also put $10,000 of his own money into a revolving fund to be used to buy bullion for the Mint. As soon as Boudinot obtained his coins, usually silver dollars, he would go into the market and buy additional bullion.

Between the two solutions, Boudinot almost single-handedly kept the doors of the Mint open. However, in 1803, it became obvious that the silver dollars coined at the Mint were straying overseas, especially to China, never to return. Fresh steps were now necessary to keep the silver at home.

In late March 1804, the coinage of silver dollars was interdicted to end their export. Half dollars now took their place as the favored coin for depositors. At the same time, due to the fall in silver bullion deposits, the director ordered the resumption of quarter dollar mintage. It was rather small, only 6,738 pieces coming from the press in that year, and most of these went to the Bank of North America in New York City.

In 1804, there was little real demand for quarter dollars, as there was still a good supply of Spanish 2 reales arriving from Mexico and the Caribbean. There may have been a temporary shortage in New York, but it is more likely that Boudinot persuaded bank officials to take these particular coins.

The renewed coinage of 1804 was matched by a new reverse design for the quarter, although the obverse was unchanged. Here we find the famous Heraldic Eagle, first seen on the gold quarter eagle in 1796. It appears that Boudinot suggested this change to meet European ideas of coinage; most countries on the continent had their coat-of-arms for the reverse design, and here the United States was merely echoing international usage.

For 1805, there was an about-face in quarter dollar coinage, with more than 120,000 pieces being struck. As this went well beyond any mere make-work project, it seems likely that the supply of 2-reales coins had been interrupted. Whatever the exact reason, coinage was up dramatically.

 The last Draped Bust quarter dollars were struck in 1807. (Images courtesy Stack’s Bowers)

The last Draped Bust quarter dollars were struck in 1807. (Images courtesy Stack’s Bowers)

The mintage for 1806 was significantly larger (at just over 200,000 pieces) than that for 1805, and this coinage includes the first overdate (1806/5) in the quarter dollar series. As with the 1805 issue, collectors wanting a type coin of the 1804-1807 coinage can easily find one if they avoid the scarce 1804 coins.

In 1807, mintage was again strong, even topping the 1806 record. However, the 220,000 coins of 1807 ran into stiff resistance when the new Mint director, Robert Patterson, tried to persuade depositors to accept them. The public demand for United States quarters had vanished as quickly as it had come, meaning that the Mint would have the 1807 quarters on hand for several years.

At the same time as this last coinage of Draped Bust quarter dollars, director Patterson undertook the redesign of all gold, silver, and copper coins of the United States. Several denominations were soon changed to the new artwork by assistant engraver John Reich, but the turn of the quarter dollar did not come until 1815, when a fresh demand arose for such coins.

This article was originally printed in Coins Magazine. >> Subscribe today.

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