What Happened When Hamilton Lost the Mint

 

A unique painting hangs in the US Mint in Philadelphia; an intimate group scene, painted by John Dunsmore, shows several Founding Fathers and other figures gathered around a seated Martha Washington. Mrs. Washington is examining the first coins minted by the new United States, made with silver from her own personal housewares (about 1,200 half dismes and a smaller number of dismes, the predecessor of the modern dime. One such disme coin sold for $998,750 in May 2016, while a half disme sold for $176,250, according to Heritage Auctions). In the group behind her, you can see Alexander Hamilton and his wife, Eliza, while Thomas Jefferson stands on Washington’s other side, waiting to inspect the new coins.

 

If you’re familiar with the “Hamilton” musical, or just know your American history, you know that Jefferson and Hamilton butted heads during their time on Washington’s Cabinet, and the founding of the Mint became another source of conflict.

 

After having a great deal of difficulty producing money that held its value during the war, America was slow to adopt new currency. Many areas relied on stable foreign currency, like the Spanish silver peso, for trade; in some places, businessmen valued foreign coins differently than in others. Many gold and silver coins had been mixed with base metals, causing merchants to fear using them lest they be cheated. In fact, though the dollar had been established by Congress as the standard currency unit, President Washington’s daily expense reports still used British denominations.

 

Naturally, Hamilton approached this issue in his usual manner: reading everything he could on the subject of coinage and minting. He studied the notes that Sir Isaac Newton had created during his post as master of the mint; these notes included details on the exact value of specific coins. Hamilton insisted on special assays of coins from other nations, trying to determine the metals used in each.

 

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In the interest of improving the economy, as well as making common necessities more available to those with lower income, Hamilton recommended the creation of a range of coins, from dollars minted with precious metals down to half-cents made from copper. He believed this would help the less fortunate “by enabling them to purchase in small portions and at a more reasonable rate the necessaries of which they stand in need.” He also championed the use of beautifully-crafted and intricate designs on the coins, both to inspire patriotism and to deter counterfeiters: “It is a just observation that ‘The perfection of the coins is a great safeguard against counterfeits.’”

 

When Hamilton first began studying and reporting on the need for a mint, he and Jefferson were still civil, if not close friends. Politics and rivalry soon divided them, which was only made worse when Washington decided that his Secretary of the Treasury was too busy for another undertaking, and put the US Mint under Jefferson’s much-smaller State department.

 

Ron Chernow, Hamilton biographer, writes, “Hamilton long regretted that when the U.S. Mint was finally established by Congress in spring 1792 and began to produce the first federal coins, Washington lodged it under Jefferson’s jurisdiction at State. […] Unfortunately, Jefferson ran the mint poorly. Hamilton later tried, in vain, to arrange a swap whereby the post office would go to State in exchange for the mint coming under Treasury control, where it belonged.”

 

Hamilton stepped down from the Treasury in 1795, but kept in contact with President Washington (later writing the bulk of Washington’s farewell address) and gave advice to Oliver Wolcott, who succeeded Hamilton as Secretary of the Treasury. The Mint became an independent agency in 1799, and turned precious metals into coins for anyone, without charging for seigniorage. It finally joined the Treasury department with the Coinage Act of 1873, nearly 70 years after Hamilton’s death.

 

(Unless otherwise stated and linked, the information in this story is sourced from Ron Chernow’s excellent book Alexander Hamilton, pages 354-356 of the Kindle edition.)

All About the Hamiltons

One of the most popular names in America today was overlooked for decades until an unlikely pop culture sensation revived his legacy: Alexander Hamilton. In fact, our first Secretary of the Treasury was due to be removed from the $10 bill until his resurgence in popularity following the 2015 debut of the eponymous Broadway hit. The faces on United States bills have remained the same since 1929 (see a bill from that year here), when it was decided that faces of “permanent familiarity” should be the ones depicted. But that is about to change.

On Wednesday, April 20, 2016, the Treasury announced their intention to keep Hamilton on the $10, and replace Jackson with Harriet Tubman on the $20 instead. How did a Secretary of the Treasury become so popular, and how has Hamilton’s life shaped America’s money?

As anyone familiar with the hit musical and Grammy-winning cast album can tell you, Alexander Hamilton was born out of wedlock “in the middle of a forgotten spot in the Caribbean,” only to leave his humble beginnings behind to pursue education on the mainland. Finding himself caught up in the revolutionary whirl of 1770’s New York, Hamilton soon distinguished himself through military strategy and oratory, eventually becoming Washington’s trusted aide-de-camp. During the war, Hamilton also devoted himself to the study of finance, developing a wealth of knowledge that quickly made him the forerunner for the new office of Secretary of the Treasury in the up-and-coming United States. Hamilton’s daring plan to have the new Federal government assume the states’ war debts put him at odds with Thomas Jefferson, James Madison, and several other Founding Fathers, though his ideas won out in the end. Hamilton did not live to see the long-term effects of his financial plan; on July 12, 1804, the 49-year-old Hamilton was killed in a duel with Aaron Burr. While strongly opinionated and prone to argument, Hamilton was nonetheless beloved by many Americans; his death was widely mourned.

Not mentioned in the musical is the fact that Hamilton also founded the U.S. Mint, and oversaw the first coins made for the new country after the acceptance of the Constitution. He is one of only two non-Presidents on American currency (the other being Franklin, on the $100 bill), and the only person depicted on American currency who was not born in the United States. He has been depicted on 8 types of US currency, in 7 different denominations: the 1862 $2 Note; the 1861 $5 Demand Note and $5 1862 United States Note; the $10 Federal Reserve Note, Gold Certificate, and Silver Certificate since 1928; the $20 US Note beginning in 1869; the $50 denomination of 1862-69 US Notes, 1862-64 Interest-Bearing Notes, 1907 Certificates of Indebtedness, and 1863-63 Compound Interest Treasury Notes; the 1864 $500 Interest Bearing Note, and the 1918 Series $1000 Federal Reserve Note.

Hamilton has been a part of American finance and currency from the very beginning; he has been a constant presence in our wallets, even if not in our minds. It’s fitting that the bombastic first Secretary of the Treasury should retain his place due to an uproarious musical that speaks to the heart of his beloved America.
Did you know? Women, including Martha Washington, Pocahontas, and Lady Liberty, have been on American currency before. You can read all about that history hereThis isn’t the first time a woman on currency has sparked intense debate, either! Do you know the story of the 1891 Silver Certificate scandal?