Around the nation's founding
Even in the United States, people used silver coins from other countries.
Spanish dollars minted in Mexico
WORDS
The Coinage Act as a Standard
Even after the United States was born, the silver coins of other countries continued to be legal tender. A law that has the power to define and change a country's monetary system is a coinage act.
The Coinage Act in 3 Minutes
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April 1792
A law set the standard for the country's own dollar.
1 dollar equals 100 cents
1792
The law even specified the weight of silver in 1 dollar.
371 1/4 grains
Since the founding
Foreign silver coins remained legal tender for a long time.
About 70 years
1857
A new law finally removed the status of the Spanish dollar.
1873
With a revision to the law, the silver dollar was quietly removed from the list of coins to be made.
Later called the 'Crime of 1873'
April 8, 1916
In the middle of a war, the Ottoman Empire unified its monetary rules.
1792
The law set the death penalty for any official who secretly reduced the silver content.
2In numbers
371 1/4grains
The weight of silver in 1 dollar, as written in the 1792 law.
About 70years
The period when the Spanish dollar was legal tender in the United States.
3What would you do?
You are a lawmaker in a brand-new country. How would you decide the weight of your country's dollar?
Pick one
Match it to the silver coins everyone is already using.
That's what they actually did. The 1792 law based the dollar standard on the Spanish milled dollars that were currently in circulation.
Create a completely new standard.
The money chosen by the market came before the nation's official money. The new republic's currency was born from the silver coin of a foreign empire.
The law was a measure to create, retire, and remake money.
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Laws Following the Currency Chosen by the Market
Surprisingly, even after the United States was born, the Spanish dollar remained legal tender. The daily money of the people was the silver coin struck at the mints of Mexico.
The currency chosen by the market existed before the nation's own currency. Then, after independence, the Coinage Act of April 1792 based the standard for its own dollar on the 'Spanish milled dollar as the same is now current'. The new republic's currency was thus born as the child of another empire's silver coin. This law established the dollar as the unit of money, adopted a decimal system of one dollar to one hundred cents, and specified its weight as three hundred seventy-one and one-fourth grains of silver.
When Laws Retire a Currency
The Spanish dollar remained legal tender in the United States for about seventy years after the nation's founding. Its status was finally revoked by the Coinage Act of 1857.
Laws also have the power to change the fate of a currency. The revision of the Coinage Act in 1873 quietly removed the standard silver dollar from the list of coins to be minted. This provision would later be renamed the 'Crime of '73'.
Correcting the Standard Amidst the Flames of War
Laws are not only enacted in times of peace. In the midst of war, on April 8, 1916, the Ottoman Empire promulgated the Unification of Coinage Act. This was a law to consolidate the fragmented monetary system.
It may seem strange to impose metallic order at a time when the market was drowning in paper. However, it is precisely in times of chaos that one wishes to keep the ledgers' standard correct. This was also a matter of professional pride for the financial bureaucrats. This law also demonetized all coinage from before the recoinage of 1844.
A Clause Punishing Debasement with Death
Coinage acts, which define the methods and standards for making money, also have a severe side. A certain penalty was written into the provisions of the United States Coinage Act of 1792: if an officer of the mint were to secretly debase the coinage, the punishment was death.
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