Pennies will buy you so little today that dividing them into even smaller change seems pointless. But back in 1786, the U.S. Continental Congress approved the mill; the “lowest
money of accompt, of which 1,000 shall be equal to the federal dollar.” While the Federal Government never actually produced a coin worth one-tenth of a cent, some states and local governments issued mills made of cheap materials such as tin, aluminum, plastic or paper. By the 1960s, the coins had depreciated so much in value that their production was virtually abandoned.
The Coinage Act of 1792 describes milles and other subdivisions of the dollar:
That the money of account of the United States shall be expressed in dollars or units, dismes or tenths, cents or hundredths, and milles or thousandths, a disme being the tenth part of a dollar, a cent the hundredth part of a dollar, a mille the thousandth part of a dollar, and that all accounts in the public offices and all proceedings in the courts of the United States shall be kept and had in conformity to this regulation.
The mint of Philadelphia made half cents worth 5 mills each from 1793 to 1857. Tokens in this denomination were issued by some states and local governments (and by some private interests) for uses such as payment of sales tax.
But just because mills don’t exist as coins doesn’t mean they don’t exist as units of currency. In most American locales, property taxes are calculated using mills. Counties assess the value of each property in their jurisdiction and apply a millage rate to calculate the amount of tax a landowner owes. For example, a county might assess a piece of property as being worth $250,000. If the tax rate is 5 mills, then the homeowner owes $1,250 in taxes ($250,000 x .005 = $1,250). Mills are also used in a couple other industries: electric power is usually measured internally in mills, and stock brokers often charge their clients in mills rather than percentages.
Outside property taxes, the average American sees the mills most often with gasoline prices. In every US state, gas prices have nine mills tacked on the end, so that gas might cost $3.109 per US gallon. Some say this pricing system came about thanks to a 1933 increase in the gas tax from 1¢ to 1.5¢ per gallon. Others say it’s just “charm pricing”, which is to offer an item for $1.99 instead of $2.00, because our brains process the former as being significantly cheaper than the latter. Still others believe a more likely story: that back when gasoline emerged as a consumer item in the early 1900s, it was sold in such small amounts and at such low prices that mills actually mattered.
But gas prices reveal something else about American culture: the universal dislike of mills. With the exception of property taxes, most every American will discuss small units of currency as fractions of a cent instead of mills. No one ever thinks of a gallon of gas costing $3.10 and 9 mills… it’s $3.10 and 9/10 of a cent. And this might be because of trading stamps.
For almost a century, retailers across the United States offered trading stamps with every purchase. You’d save the stamps and redeem them for things like clocks, toasters and lamps. You may even remember the “54-40 and Fight” episode of The Brady Bunch, in which the kids agree to pool their saved trading stamp books, but chaos breaks out when the boys want to use the stamps to get a “boy’s item” (a row boat) while the girls want to use them for a “girl’s item” (a sewing machine).
Of course, the stamps weren’t free. Companies like Sperry & Hutchinson charged retailers to join their programs, and charged for each roll of stamps the retailer ordered. And retailers, not surprisingly, passed these costs on to consumers as higher prices. In 1904, the state of New York passed a law requiring trading stamp companies to offer cash rebates in addition to housewares and sporting goods. Companies like S&H placed a value of one mill on each stamp, meaning that one could trade a book of 1,000 stamps for a dollar. Almost no one traded for the cash, because it was almost always a better deal to redeem stamps for goods instead.
Most states considered trading stamps and coupons (as in, “Save 50¢ on your next purchase of Tide Detergent”) to be the same thing legally. Three states – Indiana, Utah and Washington – required coupons to declare a cash value. Since it would be a big hassle to make coupons just for those states, companies that offered coupons started printing cash values on them nationally. And they universally used fractions of a cent instead of mills. If you look at any coupon in the US today you’ll see something like “CASH VALUE: 1/60¢” on it.
The mill is a now-abstract unit of currency but was once devised as a way to help citizens buy products in exact amounts. While using currency that is worth less than a penny seems ludicrous now, it used to be a commonplace practice.