If you could design the coinage system of the United States from scratch, what would it look like?
We currently have a system that was based on the Spanish Empire’s 8 reales coin, which is often called the Spanish milled dollar.
Ever practical, the first Treasury Secretary, Alexander Hamilton, took a number of the Spanish milled dollars and weighed them, assayed them and came up with a dollar coin that was supposed to be the equivalent, but instead was a little bit off.
Good enough. We stuck with it. It proved to be a pretty good decision because we are still using the dollar unit and all those first coins of the 1790s are still legal tender.
With the dollar picked out, our coinage was again a victory of practical versus visionary. Congress approved a decimal system where everything was based on tens, but much of the coinage was based on something else.
When early Americans wanted change, they cut 8 reales coins into pieces. Cut the coin in two and you get two halves. The American half dollar concept was born this way.
Cut the halves into halves again and you have four quarters. The American quarter was born.
Sure, there is no 12-1/2 cent piece, so this is where the Founding Fathers stopped and moved over to decimals and settled on what became the dime.
When the European Union countries entered the euro project together in 2002, they didn’t have to base their new coinage on anything tangible as the U.S. did.
Instead, they reached for convenient sizes. The euro is a tad smaller in diameter than a quarter and a bit heavier. The other coins range from 1, 2, 5, 10, 20 and 50 euro cents to the larger 2 euro.
Where our coinage sizes were determined by what made sense when the dime, quarter, half dollar and dollar coins were made of silver and had proportional value relationships, the Europeans again bowed more to convenience than to relational sizes. The 50 euro cent is almost identical in size to the euro, and it is brass rather than bimetallic. Weight is actually a bit heavier, but the concept of brass being a lesser denomination is an ancient one.
So liberated from historical roots, what coin denominations should the U.S. have in the future? What sizes should coins be? Let your imagination run.
Years ago I once suggested that considering all the inflation that had occurred since 1933, the cent and nickel should be abolished and the new system should start with the dime as the lowest denomination and physically smallest coin, with coins of 25 cents, dollar, $2.50 and $5 added in. The $10 would be the lowest paper money denomination.
The late James Benfield, who promoted Anthony dollar use with his Coin Coalition, wrote that change for more transactions could be given if we kept the nickel and abolished the cent and the dime. Be that as it may, what coins would you like to see?