Creators Podcast
Episode #9
09.27.2024
I decided to do a podcast episode on the creation of the amazing 1794 silver dollars, but I quickly found out there were only a few good books on the subject.
The key would be locating the best book on the 1794 flowing hair silver dollars, then verifying the information is still current and up to date.
I was completely blown away when I discovered that E.H. Bolender, one of the most famous coin collectors of all-time, had published a great book on the subject nearly 75 years ago!
Not only did Milferd Henry Bolender, who they called, “The Dean of American Numismatics,” publish an incredible book on the 1794 silver dollars, but he spent nearly 40 years of his life compiling all the information for his great book!
The Amazing 1794 Silver Dollars
He called it the climax of his career, and thoughtfully assembled the authority guide for collecting silver dollars dated 1794 to 1803. I didn’t have to worry too much about the legitimacy of his findings, Bolender was considered one of the most thorough collectors to ever live.
In Bolender’s incredible 70-year long coin collecting career, he bought and sold over one million coins. He knew a thing or two about the silver dollars, and what made each one unique.
But the beginning of his book caught my attention. Bolender gives a brief history of the founding of the U.S. Mint, and how the actions by the Founding Fathers of the United States swiftly created the coins and currency that we all know well to this day.
The First U.S. Silver Dollars
Not only did the Founding Fathers create the system of U.S. currency within just a few years of drafting the Declaration of Independence, but they named the unit of money the, “dollar.”
After all the struggle and hard work to succeed from England, win their independence, and then set up the nation’s framework, the leaders of the new country were wise enough to specifically describe how the laws would apply to coinage through very detailed written reports.
Let’s take a closer look at the years leading up to the minting of the very first 1794 silver dollars.
The Historic First Silver Dollar Coin
One of my favorite things about the 1794 silver dollar is the story and amazing events leading right up to the creation of the coins.
It’s not just a beautiful, old, silver coin, but just to get this silver dollar created, so many historic events had to play out.
1776 Declaration of Independence
Thomas Jefferson was only 33 years old when he was called on to draft the Declaration of Independence. He referred to his draft as an expression of “the American mind.” This was the document that would set in motion so many events that would lead to the creation of the U.S. Mint, then the first silver dollar coin.
By 1787, Congress received a draft of the United States Constitution for approval. Inside this document, there were very specific articles mentioning how the United States would coin money, regulate it, and how it would be made.
The Constitution was agreed on, then in the very first session of Congress on March 4, 1789, diligent work began to carry out the orders described in the documents.
Minting Money
There was one big question that was debated at the time. Where, and how should the newly formed United States produce it’s coinage?
I’m sure it was tempting to outsource the job. You know the feeling, when everyone is sitting around the conference room table looking at just how expensive a new endeavor is going to be. I’m not sure about your business, but many times, in my experience, the solution is quickly decided – “outsource it.”
And that’s exactly what’s initially proposed here in 1789. There’s a foreigner named, John H. Mitchell, who proposes that he can supply the United States with copper coinage from overseas.
This is a great example of the Founding Fathers wisdom and methodical thought process on every important issue. It seems that Thomas Jefferson had already been working on the problem of minting coinage for 2 years prior to the John H. Mitchell proposal.
You could say, Thomas Jefferson was way ahead of the game. Two years before he wrote a letter describing a machine to mint coinage using only one press to strike both the face and the edge of a coin.
Thomas Jefferson’s Proposal
Thomas Jefferson would quickly decline John H. Mitchell’s request to supply the U.S. with coinage from a foreign country. But the request is significant because Jefferson writes a very detailed letter why the U.S. should not produce coinage in another country.
Here are his thoughtful reasons in his letter –
- Transporting coinage across the ocean would expose them to piracy.
- The U.S. would lose it’s ability to recall and re-coin the money, once it’s in circulation.
- The U.S. should not give up the option of producing coinage in times of crisis.
- Jefferson did not want to lose control of the artists who designed the coins, and who would succeed them in future designs.
- Finally, a foreign country producing coinage for another was just simply without example.
After Thomas Jefferson’s thoughtful reply as to why the U.S. should produce coinage at home, the next obvious step was to propose the creation of the very first United States Mint.
Mr. Drost, the Inventor
There’s one guy who continues to pop up during this entire saga to create the first U.S. Mint, and produce the very first silver dollars.
His name is Mr. Drost, and he’s a Swiss inventor who was very experienced in the methods and machinery to produce coins.
I think Thomas Jefferson makes at least two or three separate proposals to Mr. Drost to kindly come to the U.S. and assist in setting up the U.S. Mint.
However, Mr. Drost declines the request from Thomas Jefferson every single time. But throughout the story, Jefferson is very persistent to request the services of Mr. Drost, but to no avail.
The First Secretary of the Treasury
With congress moving quickly to authorize the establishment of the first U.S. Mint, luckily Thomas Jefferson had a wise partner to keep things moving. None other than Alexander Hamilton, the very first Secretary of the Treasury.
And Hamilton gets right to work. He writes a full report on each step required to get the Mint up-and-running quickly.
Alexander Hamilton presents his report to congress, and he poses a few very important questions and clarifications to guide the steps going forward.
- What should be the “nature of the money unit.”
- Hamilton defines the proportions between gold and silver.
- How should the U.S. pay for the cost of creating coinage?
- Each coin denomination is defined.
- What to do about foreign coins already in use, and future foreign coins inside the U.S.
Should the Dollar be Based on Silver or Gold?
Another important aspect Alexander Hamilton discussed in his outline was if the dollar should be based on silver or gold.
And the conclusion that Hamilton reached is the dollar should not be based on silver or gold, but on it’s own unit.
The reason was if the dollar was attached to gold or silver, it would assume the value of one or the other. Hamilton wanted the dollar to have it’s own value, because it could not be attached to gold or silver without destroying the existing character of each of them, and reducing it to, “mere merchandise.”
Coin Denominations
Next, Alexander Hamilton proposed the new coinage, and the denominations of each.
- A gold piece, called the “eagle,” which would be ten dollar units.
- A gold piece, equal to a tenth of an eagle, or one dollar.
- A silver piece, equal to one dollar.
- A silver piece, equal to one tenth of the silver dollar, or a dime.
- A copper piece, equal to one hundredth of a dollar unit, or one cent.
- A copper piece, equal to half the value of one cent, or half-cent.
Once Alexander Hamilton’s report was submitted to congress on January 28, 1791, it was passed quickly by March 3 of 1791.
Establishing the U.S. Mint
Just about one year after Hamilton’s resolutions were passed, the U.S. Mint was established with the official law declaring exactly how the Mint would be operated.
Next, a very important and specific law was passed called the Coinage Act of 1792 that describes each detail of coin creation moving forward.
The Coinage Act of 1792
Inside the Coinage Act, very specific composition values were given for each coin. Silver dollar units were to contain 3,714 grains of pure silver.
It was just a few short years since the Declaration of Independence, and the U.S. now had a new Mint and laws in place to govern it’s money supply.
The First Silver Dollars
Now that we know exactly what the composition will be for the newly created silver dollars, it’s time for the Mint to strike a few coins and see how they look.
Nearly 2,000 silver dollars were struck dated 1794, but a few hundred coins did not pass the quality control test, so they were immediately disposed.
That leaves 1,758 silver dollars from the very first year of the Mint.
The most valuable coins that sill remain are traced back to the very first few strikes. Somehow, and someway, coin collecting experts were able to pinpoint which silver dollars were struck first, and a few of those same coins remain today.
And they are a few of the most valuable coins in the world. The highest graded, MS-66 silver dollars from 1794 are valued at over $10 to $12 million.
Troubles at the Mint
Once the U.S. Mint was up and running, it was not clear sailing. Not even close. Just as the first silver dollars were rolling off the mint presses, the struggle began.
How to maintain the quality that the public expected in each coin? How to operate the Mint efficiently and effectively where the costs were not out of control? And who should be hired to oversee all of these important daily operating decisions?
Reality soon set in at the Mint. It was one thing to plan, write, and pass laws on how to create new currency, but it was entirely another ordeal to actually put all this talk and planning into daily practice.
Over the next few years, public outcry grew intense. It was just eight to ten years later there was a vote to abolish the Coinage Act of 1792, and go back to the drawing board on the Mint and the nation’s currency. But the vote did not pass, and the Mint endured.
The ‘Dollar’ Money Unit
There was another fascinating piece of this story that I could not think about as I studied the 1794 silver dollars. It was the term “dollar,” itself. The money unit the Founding Fathers decided to call the “dollar.”
I walked up to my bookshelf and tried to find a book I remember reading on this exact subject. Sure enough, there it was, ‘The History of Money,” by Jack Weatherford. A great book.
The book left an impression when I read it a few years ago. A super easy read, and very informative. Weatherford’s book covers exactly what you would imagine, literally the entire world history of our money as we all know it.
From the Aztecs all the way up to modern day life, and everything in between. The history of money is full of twists and turns, I would strongly recommend you read the entire book when you have the chance.
The History of the Word Dollar
But inside this great book one chapter stuck in my mind. The history of the word, “dollar.”
All the way back in 1520, a huge silver mine was discovered near the Czech Republic and Germany border. A place called, “Jachymov.” Pronounced, “ya-hee-mov.”
At this town was a nobleman named Count Schlick, who decided not to simply mine the silver and sell it, but to mine the silver and produce coins.
One of the keys to this story is a 22-letter word. The word was the name of the valley where this town was located. The name of the valley was, “Joachimsthalergroschen.”
The name is impossible to pronounce, so everyone shortened it to, “Groschen.”
Then they named the silver coins after the shortened name.
Initially, the silver coins were called, “Groschen,” but then over time, the silver coins were shortened to be called, “Talers.” You can see the “Talers” word right in the middle of the long name of the valley.
Now you can start to see what’s happening here. The silver coins, “Talers,” were dispersed around the world, and since this silver mine was apparently much larger than anyone could imagine, there were over 12 million Talers minted from this single silver cache.
Talers to Dollars
But the story doesn’t stop there. While the silver “Taler” coins were dispersed around the world, some countries morphed the word into “Dollars.” From “Talers,” to “Dollars.” Especially in England, the used the, dollars slang for these coins.
Then! It keeps going, there was another popular variation of Talers minted called, “Maria Theresa Talers,” which were produced in incredible amounts. Over 800 million “Maria Theresa Taler” coins were minted and dispersed around the world.
So now, over the next few hundred years, everyone has at least a few silver “dollars,” or Talers laying around, but it wasn’t until the sixteenth century that a the United States, a major country, adopted the word for it’s official currency for the first time.