The one cent coin was the first official coin struck by the United States Mint in 1793, but by the 1840s, it was an increasingly unpopular denomination. Because the copper cents contained no gold or silver and were not legal tender for trade, many merchants would not accept them or only accepted them at a discount. These “large cents,” produced until 1857, were indeed large and awkward – modeled after the British pennies, they were about the same size of a modern-day Susan B Anthony or Sacagawea dollar.
Due to increases in the cost of copper in the 1850s, the US Mint reduced the size of its one-cent coin. The Flying Eagle cent, officially introduced in 1857, was the first “small cent.” It replaced the original “large cent,” which was nearly the size of a contemporary half dollar. However, the design of the Flying Eagle cent did not strike well in the hard 88% copper, 12% nickel alloy. Mint Director James Ross Snowden ordered a new design, which became the Indian Head cent in 1859.
The Coinage Act of 1792 established the United States Mint and provided for the construction of a facility in Philadelphia, the new nation’s first federal building. The same law also established a decimal-based currency system in the United States, with the dollar as its cornerstone and “money of account.” The Mint building was constructed in 1792 and began production the following year.
The Money Project is an ongoing collaboration between Visual Capitalist and Texas Precious Metals that seeks to use intuitive visualizations to explore the origins, nature, and use of money.
The value of money is not static. In the short term, it may ebb and flow against other currencies on the market. In the long-term, a currency tends to lose buying power over time through inflation, and as more currency units are created.
Inflation is a result of too much money chasing too few goods – and it is often influenced by government policies, central banks, and other factors. In this short timeline of monetary history in the 20th century, we look at major events, the change in money supply, and the buying power of the U.S. dollar in each decade.
The Draped Bust dollar was the second silver dollar produced by the United States Mint. The design replaced the Flowing Hair dollar, which was only produced for a short time in 1794 and 1795. The Draped Bust design was part of a wholesale redesign of US coinage; all United States coins from 1795 to approximately 1807 bear a variation of this design motif. Only later would it become more common for different denominations to bear unrelated designs.
During the depths of the Great Depression, the newly-ascendant administration of Franklin D. Roosevelt took the United States off the gold standard. This was accomplished with Executive Order 6102 in April 1933, which criminalized the possession of gold by US citizens. The Gold Reserve Act passed the following year, and ratified the provisions of the Executive Order and also devalued the dollar. US gold coinage was to be melted into bars and stored at the new Fort Knox in Kentucky. The intent of the Executive Order and the subsequent legislation was to remove constraints on the Federal Reserve in its efforts to resolve the ongoing banking crisis.
In the early 1970s, rising prices of copper forced the US Mint to consider alternative metals for the one cent coin. The Mint was spending more than one cent to produce each one cent, and as the coins were in high demand (over seven billion were produced in 1973), the Mint stood to lose a great deal should copper prices continue their ascent.
In 2015, Texas Governor Greg Abbott in 2015 signed into law an act establishing a state bullion depository at no cost to taxpayers. He intends to enter into a public-private partnership with a qualified company to provide a secure, physical depository and an agency of innovation.
A non-banking financial facility will provide Texans with secure resources for a wide range of gold-backed financial services privately sponsored and publicly supervised by the state of Texas.
Here is coverage from the Forth Worth Star-Telegram:
Although gold has a bigger reputation today as a monetary metal, it was often deemed too valuable for everyday transactions throughout history.
For the most part, common people in places like Ancient Rome used silver to buy daily staples like grain or wine. As a result, silver has a strong reputation through monetary history as the “people’s money”.
Even today, silver is still much more widely accessible. With one ounce of gold being 70x more expensive than an ounce of silver, it’s difficult for someone who is just starting to accumulate wealth to own gold.
The economic turmoil of the Civil War drove most small-denomination coinage out of circulation. Even one cent coins were hoarded, perhaps because they were the only remaining federal coin that had not been totally driven out of circulation. Various substitute forms of currency served in everyday commerce, including small-denomination paper currency notes and privately-issued bronze tokens. In 1864, in an effort to get the cent to circulate once more, Congress changed its composition from a copper-nickel alloy to bronze, which was easier to strike into coinage, and reduced its weight, making it less valuable.