CoinClinic: Foreign Coins Circulating in the U.S.

Prior to 1857, it was commonplace to receive foreign coins in financial transactions. Was this simply accepted as the way business was conducted, or were these foreign coins legal to use in the United States?

The Act of Feb. 9, 1793, made French silver crowns and gold coins of France, Great Britain, Portugal, Spain, and Spanish colonial America legal tender and receivable in payment for government debts. Since there were no domestic silver mines of any consequence at that time, once these coins arrived at the mint, they were melted and re-coined into U.S. coinage.

Was the use of foreign coins in circulation seen as being a problem by the government, or was it just business as usual?

In a Jan. 11, 1830, U.S. Senate report, it was observed: “To depend on foreign coins for our ordinary domestic use is unworthy of ourselves and our condition. We have all the reasons of policy which induce nations to establish and coin money for themselves; we have all the means for coining our own money; our own system of money; our own mint and our own coins, are no longer in their infancy, and the just pride of national character should now discard the foreign coins which were from necessity, adopted and used in the country in its colonial state.”

Is there any documentation of just how much foreign coinage was recycled into U.S. coins during this period?

Annual reports of the director of the mint address the fact that much of our domestic gold and silver coinage from the pre-1857 period was produced from bullion from these various foreign coins.

Foreign coins were no longer legal tender in the United States after 1857. Did this bring their circulation to a screeching halt, or did they continue to circulate for some time?

Silver 8-reale coins minted in Mexico were being accumulated and sold at a premium to merchants involved in exporting to China by bullion dealers throughout the 1860s and 1870s. Some western banks were still paying out and receiving both checks and drafts denominated in Mexican dollars as late as the 1870s.

Was there a scandal involving the initial distribution of the desirable 1935 Old Spanish Trail commemorative half dollars?

The Old Spanish Trail half dollars were distributed exclusively by L.W. Hoffecker of El Paso, Texas. Hoffecker wasn’t straightforward about his distributions, admitting in a 1953 letter (18 years later) to coin dealer Abe Kosoff that “we have no trouble selling two or three coins at $15 a piece every week.” Compound this with a letter from his wife to coin dealer B. Max Mehl a year later that states: “We have had 12 of these coins and Mr. Hoffecker decided to keep them for his grandchildren and great-grandchildren,” and the 63 additional coins sold in 1987 from his estate, and it would appear Hoffecker was parceling the coins out as he saw fit. 

Why does it appear to be so challenging to find truly nice $2.50 and $5 Indian gold coins?

The Indian Head design on the quarter and half eagle gold coins was produced on a flat field. A flat field is normally the area in the lowest relief on a coin, but due to the incuse design of these coins, this is the area of the highest relief (The mint mark is even higher!). Having been stored in bags before distribution didn’t help either. The result is that true Gem quality coins are challenging to find.

Images courtesy PCGS.