In the 1850s, when the coin collecting hobby became a national interest, there were two areas in which collectors tended to specialize. The first was the old copper cents of 1793 to 1807, while the second was the silver dollars struck from 1794 to 1804. The fact that the first dollars of 1794-1795 were struck on an illegal standard makes them even more collectible and interesting.
There had been several attempts in the 1780s to establish a mint, but all came to nothing because the Confederation government was chronically short of money. It was not until the new federal government began operations in April 1789 that thoughts turned once more to the ills of the monetary system. With other more pressing matters in view, however, Congress did little until early 1790 when it asked Treasury Secretary Alexander Hamilton to prepare a report on a mint and coinage.
Hamilton’s 15,000-word document was sent to Congress in January 1791, but the only immediate result was a resolution authorizing the President to take care of the matter. During the summer and fall of 1791, President George Washington, with the help of Secretary of State Thomas Jefferson, made just such an effort but in the end realized that a formal law was needed. The legislators took the hint, and the Senate appointed a special committee to draft the necessary bill.
Hamilton’s report had proposed the Spanish dollar (eight reales) as the basis of our silver coinage, but he had some difficulty in determining the correct weight. The Spanish government had secretly debased its dollar some years before, and thus the coins in use varied in value, according to the date.
Moreover, the Spanish official fineness for silver coins in 1791 was .902 while the actual fineness was closer to .896. The average weight of circulating Spanish dollars was in the range of 416 or 417 grains. Other countries, such as France or Germany, used yet other finenesses and weights for their silver coins.
In writing the draft legislation, the Senate committee under Robert Morris considered the various options available to them and decided that a compromise was in order. Instead of the .917 silver purity suggested by Hamilton, they opted for the curious standard of 1485/1664 (.8924+). The new United States dollar thus weighed 416 grains, of which 371.25 grains was pure silver. It is likely that the committee wanted a silver dollar fully equal in size to the Spanish version. In doing so, however, the Senators failed to take into consideration the problems this odd fineness would create at the Mint.
At any rate, after several months of discussion, Congress passed, and the President signed into law, the basic mint legislation. Once it became law in early April 1792, it was up to the Washington Administration to carry out the provisions and begin coinage as soon as possible.
Within a short time of the bill’s passage, David Rittenhouse accepted Washington’s request that he become Mint director. Rittenhouse, in turn, chose Henry Voight as the first chief coiner. Little was done in 1792, however, other than to erect several buildings and construct the necessary machinery to coin money. (About 2,000 half dismes were coined in 1792 but, due to a quirk in the law, these were actually struck under the direct authority of the President as mintmaster.)
In late February 1793, the new Mint began formal operations by striking the well-known Chain cents but did not strike any gold or silver coins in 1793 because the high bonds set for two key officers, the chief coiner and assayer, could not be met. Each was required to post sureties to the amount of $10,000, an enormous sum for the times. At the end of 1793, Rittenhouse appealed to Congress to lower the bonds to more reasonable levels, and this was done in March 1794. The necessary sureties were soon obtained by Chief Coiner Voight and Assayer Albion Cox.
At first, Rittenhouse planned to begin silver coinage with the half dime, and to this end, Chief Engraver Robert Scot prepared a pair of pattern dies, from which a few pieces in copper were struck for inspection by government officials, especially the President. The mint director then changed his mind and decided to start coinage with the silver dollar instead. One factor that might have influenced him was the question of prestige; it was important for the United States to produce a coin of size and quality that would impress the Europeans.
It is not clear when Scot began work on the new dollar dies, but it was likely no later than mid-August 1794 and perhaps a month or so earlier. In the meantime, word had spread among bankers and importers that the Philadelphia Mint would soon begin coining silver, and deposits began to arrive. The first of these was from the Bank of Maryland, which sent in about $80,000 of French silver coin.
In August, other deposits followed, including several thousand dollars’ worth from the mint director himself. The Bank of North America sent $22,000 worth to the Mint in late August, giving the institution a fair amount of bullion with which to begin coinage.
Because the Bank of Maryland deposit was partially composed of billon coins (billon is a combination of silver and copper in which silver composes less than half of the weight), Rittenhouse decided to begin with his own deposit, which was entirely in ingots already refined to the proper standard. Or was it?
In the summer of 1794, Assayer Albion Cox approached the director with a strange suggestion. Cox claimed that the fineness set by Congress, .8924+, for the silver coinage was too low and coins from this standard would turn black in daily use, thus discrediting the government. Cox thought that .900 ought to be used instead; it had the added convenience of simplifying calculations when preparing the ingots for coinage.
Although Cox’s argument about the coins turning black-bordered on nonsense, his next idea was even worse. Cox asked Rittenhouse to keep the matter a secret by not changing the gross weight of the dollar. This would hide the alteration from the public as well as high government officials, such as the President, who ought to have been told of this hare-brained scheme.
To make matters worse, Rittenhouse accepted the proposals and ordered that they be kept secret. It is probable that only the chief coiner was let in on the change. It was under these conditions that preparations for the first coinage of silver at the Mint were undertaken, but it was not until early October that all was close to readiness.
On Oct. 15, 1794, there was a special ceremony honoring the first regular coinage of silver under the new government. In the hurry to begin coinage, however, it was found that the largest press available was not really powerful enough to strike silver dollars all that well. Moreover, the dies were slightly out of parallel, meaning that struck dollars would have areas, especially on the lower left of the obverse and the corresponding part of the reverse, where the design did not come up properly.
The President was unable to attend this special event, being absent from Philadelphia, but Secretary of State Edmund Randolph did.
At the end of the day on the 15th, Chief Coiner Voight delivered exactly 1,758 silver dollars to Mint Treasurer Tristam Dalton, who had the legal duty of paying out the coins to the depositors. In this case, however, the coins did not travel very far because they were all given to David Rittenhouse. The director went to some lengths to send specimens to various parts of the country, at his own expense, so that others might see what the Mint was doing.
On the following day, Secretary Randolph penned a note to the President which read in part that, “The silver coin of the U.S. bears upon its face so much neatness and simplicity, that I cannot restrain myself from transmitting a dollar for your inspection.”
Although Voight delivered most of the dollars struck that day, this was not quite the end of the story. Others, perhaps 200 pieces, were judged to be so ill-struck that they ought not to be seen by the public. This would have included light strikes as well as off-center pieces. These were laid back to be used as planchets when dollar coinage resumed.
Director Rittenhouse soon contracted with a local firm to construct a special press that would be powerful enough to coin dollars; it was also to be used for medals, should the need arise. The press was not finished until late April 1795, with the first dollar coinage coming early in the following month.
It is estimated that perhaps 125 of these first dollars exist in modern collections. Whenever one of these is auctioned, there is invariably spirited bidding because of the fact that they represent the first regular silver coinage of the United States in addition to their aura as being made with an illegal alloy.
There is no record of the President responding directly to the dollar coin sent him by Secretary Randolph, but on Nov. 19, 1794, he notified Congress of this coinage in the following words: “The Mint of the United States has entered upon the coinage of the precious metals, and considerable sums of defective coins and bullion have been lodged with the director, by individuals. There is a pleasing prospect this institution will, at no remote day, realize the expectation which was originally formed in its utility.”
Unable to coin any more dollars in 1794, Rittenhouse and Voight turned to the half dollar. At the end of November 1794, a few thousand pieces were struck, but there was then a mechanical impediment of some kind, holding up further silver coinage until early January 1795. Once the difficulty was solved, however, half dollars were struck at a heavy rate for several months.
In the meantime, there were complaints to Congress about the slow pace of coinage at the Mint. In late 1794, a special committee was appointed by the House of Representatives to examine the situation and make a report to the other members. The report was submitted in early February 1795 and today provides insight into the workings of the early Mint. Committee Chairman Elias Boudinot was generally understanding of the difficulties faced by the institution, though there were several minor criticisms.
One of the more interesting sections of the report was the recommendation that the silver fineness be raised to .900. The committee was not told of the secret change but had been asked to raise the standard. Some of the committee recommendations were adopted by Congress, but not this one. The Mint continued to strike silver coins at the illegal standard, however, notwithstanding Congressional refusal to accept the practice.
On the completion of the special press “for dollars and medals,” the Mint resumed coinage of the Flowing Hair silver dollars, the chief coiner delivering 3,810 pieces on May 6. This was the beginning of a flood of dollars that lasted most of the rest of 1795. Much of the bullion for this extensive coinage was deposited by a prominent local merchant/importer named John Vaughn; he was later to regret his help when the illegal standard became known.
In June 1795, David Rittenhouse, due to ill health, resigned as director and was succeeded by Henry William DeSaussure of South Carolina. DeSaussure is known to have been a friend of the President and had reluctantly agreed to the post. DeSaussure later said that he did not favor the illegal standard but did nothing because of the “weighty” precedent set by David Rittenhouse. In September, however, because of family concerns for his health in the Philadelphia climate, DeSaussure notified the President that he would leave at the end of October.
Prior to DeSaussure’s resignation, however, the government had agreed to a redesign of the silver coinage. It is said that famed artist Gilbert Stuart remarked, probably to the President, that the current head of Liberty had a disheveled look and ought to look more refined. He offered to do the artistic work, and this was accepted. By late September, the new dies had been completed, and coinage of Draped Bust dollars began.
DeSaussure’s successor, through an odd quirk, was none other than Elias Boudinot, who had chaired the Mint investigation during the winter of 1794-1795. The former congressman had a reputation for integrity and had also been the president of the United States in 1782-1783, under the Confederation Government.
Boudinot became Director on Oct. 27 and was immediately informed of the secret standard. Given Boudinot’s known sense of public duty and strict adherence to the law, it could not have been one of his better days. The new director ordered that the illegal standard be dropped at once and the proper fineness (.8924+) be used. Boudinot then notified the President of what had happened.
Washington must have been astounded by the information, as were others when the news got out. Within a few weeks, one of the principal depositors, John Vaughn, had discovered that he had been shorted more than $2,000 by the illegal standard. He demanded his money from the Mint and then the Treasury, but both ignored him in the hopes that the scandal would just fade away.
The scandal did not go away and eventually wound up on the floors of Congress where there were acrimonious debates over the Mint, the illegal standard, and the great amounts of money spent with little U.S. coin in circulation. In 1800, after four years of wrangling, Congress ordered Vaughn paid the money rightfully due him.
Because we do not know the exact date that the Draped Bust dies were first used, we are forced to estimate the number of 1795 Flowing Hair dollars issued by the Mint. About 134,000 were made, and of these, a fair number are still in existence. The survivors are under pressure from type collectors, who must have either the 1794 or 1795 dollar for their collections, and the rare first year is beyond the resources of most numismatists.
There are two principal varieties of the 1795 Flowing Hair dollar, depending upon whether two or three leaves are under the eagle’s wings. There is little difference in value, but specimens with a plug inserted (to bring up the weight to the proper level) bring much stronger prices.