The Americans used French gold coins to fund the revolution. By the time the smoke had cleared, Congress decided the country needed its own currency. Oliver Hoover reports
The American Revolution (1776-1783) and its immediate aftermath were devastating to the finances of Congress and individual Americans alike. Public faith in paper money, which tended to rapidly lose its value, was completely shattered and the states continued to suffer from a dearth of coined money, just as they had under British rule. Some states attempted to fill the void with their own copper coins and Congress tried to find a source that would produce a new federal copper coin. But all of these schemes collapsed in the great Copper Panic of 1789-1790. The United States seemed to be quickly spiralling towards economic ruin.
The young nation was saved from imminent economic disaster by Alexander Hamilton, who was appointed the first United States Secretary of the Treasury in 1788. After studying the problem, he concluded that American coinage woes could be solved by the establishment of a federal mint. Following his recommendations, on April 2, 1792, Congress passed the Coinage Act, which created the first United States Mint in Philadelphia.
The Mint's first order of business was to strike federal copper cents and half-cents to begin replacing the much-distrusted halfpence and state coppers in circulation. Up to this point, the American circulation pool had been tainted by the overwhelming presence of lightweight counterfeit halfpence imported from Great Britain or locally produced, as well as by counterfeit state coppers often struck by unscrupulous individuals employed by the state
The quality of gold coins circulating in America was not corrupt like the copper, but all of the coins were Spanish, Portuguese, French, and English imports. There was no truly American gold coinage. Indeed, even when gold was needed to fund the American Revolution, it was necessary to use French gold coins loaned for the purpose by King Louis XVI. Congress was careful to clip the edges of these coins before spending them in order to get the biggest bang for Louis' buck.
Foreign gold coins had long been acceptable to American merchants and continued to be preferred by many banks of the United States into the early 19th century. Nevertheless, it came as some embarrassment to national pride that there was as yet no gold coin for Americans to call their own. This situation was addressed on September 22, 1795, when the United States Mint struck its first gold coins.
The iconography of the new coins, known as the eagle (worth $10) and the half eagle (worth $5), was intended to represent the ideals of the young country both to its own people and to foreign powers who would see the coins in international trade. Both denominations featured the head of Liberty wearing a form of pileus, or liberty cap, and an eagle holding a wreath in its beak. This classicising treatment of the eagle was derived from ancient Roman coins, apparently with the intent of casting the US as the most recent embodiment of the principles of the Roman Republic. Ironically, the model for the eagle comes from coins struck more than a century after Rome had exchanged its republican constitution for autocratic emperors. It may be no accident that this form of the eagle was discontinued in 1797 and replaced by a new reverse copying the more appropriate heraldic eagle and shield device found on the Great Seal of the United States.
From 1797 until the dramatic redesign of United States coinage in the early 20th century, gold eagles and their several fractions and multiples featured the same basic typology: the head of Liberty on the obverse and some variant of the heraldic eagle of the Great Seal on the reverse. Until 1834, Liberty regularly wears a pileus, although it is often rather inexpertly rendered. After this date she increasingly looks like the diademed goddess Venus as depicted on coins of the Roman Republic. Just as Venus was the mythological progenitor of the Roman people, Liberty was the parent
of the American Republic.
Much as the gold coinage served to symbolically represent the United States to itself and others, it also reflected the turbulent political and economic times in which it evolved. For example, the now well-known motto, IN GOD WE TRUST, began to appear on gold coins in 1866 as an indicator of the belief of many Unionists that God had supported their cause in the Civil War which raged between 1861-1865. Although the motto was employed on the gold only after the conflict had ended, a preacher, Rev. M. R. Watkinson, had already petitioned for the motto to be used on the coins after the fighting had begun. It was felt that in this way the very money used to pay for the conflict would become a talisman of divine providence and bring the Union victory more quickly.
Sometimes new denominations were proposed in response to extraordinary events. In 1879-1880, the Mint briefly experimented with four-dollar coins (called 'stellas' for their prominent star reverse type) in response to public concerns over the fluctuation of the value of silver to gold on the international market. It was argued that the 'stella' would solve the valuation problem because its gold content was alloyed with 10 per cent silver. However, because the alloy was indistinguishable from pure gold the plan was quickly scrapped. Remaining 'stellas' were sold to Congressmen at cost. The coins became a source of scandal some years later when they began to appear on necklaces worn by the madams of Washington's more prominent bordellos.
Although the coin designs featuring various forms of Liberty's head and the heraldic eagle had been appropriate for the Neoclassical and Romantic art milieus of the late 18th and 19th centuries, by the beginning of the 20th century they were beginning to look a little old fashioned. Considering the old types to be unbefitting of a great nation, President Theodore Roosevelt himself commissioned new designs infused with the vibrancy of the new Beaux Arts movement. The design revolution that took place in 1907-1908 was largely the work of Augustus Saint-Gaudens – arguably the very greatest of the American practitioners of the Beaux Arts. His $20 double eagle, which features a full-figure of Liberty shedding light from her torch as she advances towards the viewer and a majestic eagle flying as the sun rises, is probably one of the most iconic American coins of the 20th century.
Unfortunately, the new lease on artistic life afforded to US gold coins by Saint-Gaudens was doomed to be cut short by historical events. In order to free up gold desperately needed to deal with the crisis of the Great Depression, on April 5, 1933, President Franklin D. Roosevelt made it illegal for a private person to have more than $100 in gold coin and he permanently ended the production of gold coins for circulation by the United States Mint. It is perhaps only fitting that federal gold coinage, which was born from emergency, should also die amid crisis. Nevertheless, the latter-day mourners of Alexander Hamilton's golden dream are many and the relics of the 140-year experiment in U.S. gold coinage remain highly sought-after.
Oliver Hoover is a curator of the American Numismatic Society.