Mint Act

MINT ACT

The U. S. Congress passed the Mint Act on April 2, 1792, to establish the country's first mint at Philadelphia, Pennsylvania. The ineffectual Articles of Confederation (1781) had given each state the right to mint its own coins. To ensure the stability of the monetary system, the U.S. Constitution (adopted in 1788) revoked that right, declaring the federal government the sole issuer of currency in the nation (metal or paper money). The Mint Act was the necessary follow-up to the Constitution's proclamation that the federal government alone would "coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures." The Congressional legislation made the dollar the basic unit of money and adopted the bimetallic standard, meaning that both gold and silver became legal tender (an official medium of payment) in the United States. Laws fixed the value of each metal in relation to the other.

American inventor David Rittenhouse (1732–96) was appointed the first director of the U.S. Mint, an office he held from 1792 to 1795. Rittenhouse had been active in state politics and served as treasurer of Pennsylvania (1777–89). The Mint Act authorized coins in three denominations—the copper cent (or penny), the silver dollar, and the gold eagle. The coinage was based on Thomas Jefferson's (1743–1826) decimal system, which he had proposed when he was a member of the Continental Congress (1783–85).

For decades after the Mint Act, U.S. coins circulated along with foreign coins in the states. The federal government determined the exchange rate based on how much precious metal was present in foreign coins. But in 1857 Congress approved a law removing foreign coins from circulation.

For many years the $10 gold eagle was the highest denomination of U.S. coin. In 1933 the government took gold out of circulation; the precious metals present in other coins was also reduced through later Congressional legislation. Today gold and silver coins are minted as commemorative issues for collectors. Silver and gold bullion (bars or ingots) are minted for sale to investors.

See also: Bank of the United States (First National Bank), Currency, Thomas Jefferson, Money