Coin Rarities & Related Topics: News and Analysis regarding scarce coins, markets, and coin collecting #404
A Weekly Column by Greg Reynolds …..
Research for this discussion began with the idea that there are many 18th-century copper coins that now cost from $500 to $1,500 each. Indeed, a neat set of major varieties of Fugio Coppers may be built without spending more than $1,500 on any one coin. As I investigated Fugio Coppers, however, I became fascinated by the circumstances surrounding their minting and the role of governments in regard to coinage at the time.
Contrary to the views of most pertinent researchers, evidence indicates that Fugio Coppers are not one-cent coins. Their meaning is unusually complicated and Fugio Coppers had political implications far beyond the scandalous aspects of their production.
What are Fugio Coppers?
Although many members of the Confederation Congress in 1787 would have liked for Fugio Coppers to be one-cent coins, and some hoped to broadcast the idea of a one-cent coin, Fugio Coppers were destined to circulate with the monetary value of British halfpennies, the standard for coppers in the U.S. for decades before 1793. The legal status and meaning of Fugio Coppers were clouded by the complexity of the Articles of Confederation, wishful thinking on the part of congressmen, poor planning and wrongdoing.
All Fugio Coppers are dated 1787, though none exhibit a denomination. They are referred to in government documents and in contracts by weight. Did the national government under the Confederation ever really attain the authority to issue these as coins? Did many members of Congress really believe that Fugio Coppers could practically and consistently been accepted in commerce as pieces that had the value of 1/100 of a Spanish Milled Dollar or of 1/100 of a U.S. silver dollar to be initiated in the future?
In an article in Krause Publications that was first published on November 21, 2017, R. W. Julian emphasized that Fugio Coppers might be the first U.S. coins. Though this may be so, I have so far not found convincing evidence that Fugio Coppers were legitimate coins and there are logical reasons to cast doubt on their status.
Although Bob’s interpretation of Fugio Coppers is much different from the theme here, Julian clearly recognizes that there were serious circumstantial and legal problems relating to the production of Fugio Coppers.
“One would think that a contract coinage [for Fugio Coppers], under the circumstances, was the best that could be done, but in reality it was the worst of choices. The contract was obtained by bribery and the coiners proved to be little better than counterfeiters, using [government-supplied] copper obtained for little or nothing,” R. W. Julian declares!
The U.S. Congress, through the Treasury Board, contracted with James Jarvis to mint Fugio Coppers. At least some members of Congress intended for them to circulate widely, though the fate of most of those minted is a mystery. Overall mintage figures have never been documented.
According to Don Taxay in The U.S. Mint and Coinage (NY: Arco, 1966, p. 21), on July 6, 1787, the U.S. Congress resolved that the Board of Treasury dictate to Jarvis the design elements that were to appear on the Fugio Coppers. Jarvis followed instructions in this regard. The design elements on the 1787 Fugio Coppers were copied by Congressmen in 1786 or 1787 from fractional notes in the February 17, 1776 emission of Continental paper money.
If the intention or the purpose were to make one-cent coins, with each being worth 1/100 of a Spanish Milled Dollar, why not indicate that in some way on each Fugio? In my view, some Congressmen wanted to believe that a one-cent coin was viable in 1787 and many Congressmen wanted U.S. citizens to think about one-cent coins. The primary purpose in 1787, however, must have been to produce coins that were roughly equivalent to British halfpennies, as one-cent pieces would not have been widely understood or accepted. It is relevant that Massachusetts Coppers of 1787 and 1788 did not circulate at the face values stated in the legislation that authorized them.
The formal approval of nine state governments would then have been legally required for the U.S. Congress to arrange for the production of U.S. coins under the Articles of Confederation. Was the topic even discussed in state legislatures? There was very little contemporary discussion of Fugio Coppers outside of Congress. It is likely that Jarvis misled the U.S. Congress by providing the impression that far more Fugio Coppers entered circulation than were ever really struck.
It is generally believed that James Jarvis obtained his contracts for Fugio Coppers through bribery and shenanigans. Jarvis received a large quantity of copper from William Duer, Secretary of the Board of Treasury, months before the contracts were signed. Duer was a corrupt public servant and a dishonest businessman, who was alleged to have been involved in several noteworthy scandals and slimy schemes.
Legal documents survive that conclusively demonstrate that Jarvis breached contracts with the U.S. Congress and that Jarvis accused Duer of racketeering. Were the government contracts with Jarvis legal? In Anglo-American legal systems, contracts that are judged to be in violation of laws are often voided or modified.
As the focus in legal proceedings was on Jarvis’s failure to abide by the terms of the contracts, there may not have been any consideration of whether the contracts themselves were legal in the framework of the Articles of Confederation and laws at the time. No one involved in the legal proceedings that followed production of Fugio Coppers had a motive to demonstrate that the contracts and the Fugio Coppers themselves may have been illegal. In financial terms, the U.S. government obtained a substantial judgment against Jarvis, which he never paid.
On May 21, 1787, the Board of Treasury acknowledged that 8,968 pounds of Fugio Coppers had been delivered by Jarvis’s firm. According to Taxay (p. 35), the Board of Treasury acknowledged then that “it would probably be impossible to circulate the Fugio coins as cents,” meaning it was unrealistic to value each Fugio Copper at 1/100 of a Spanish Milled Dollar. The board suggested a revaluation, “making the Fugios three-quarter cent pieces.”
This suggestion for a revaluation was just a bureaucratic formality, in my view. Duer and other dishonest public servants profited from the support of Congressmen for their schemes. One reason that Duer and Jarvis benefitted financially is that some congressmen honestly wished to publicize a sincere plan for a decimal monetary system, and talk about a one-cent coin drew attention.
Most people involved must have known that it would not have been practical for Fugio Coppers to circulate as one-cent coins. In the 1780s or earlier in the 18th century, there was no significant decimal system regarding coinage in North America or Western Europe. Merchants and consumers in the U.S. thought of coppers in terms of the British system and silver coins in terms of the Spanish system.
The British and Spanish monetary systems were inconsistent. The general use of multiples of three and five by the British was at odds with the Spanish focus on eighths and multiples of eight. There were not 1/100 dollar or 1/100 crown denominations in either system.
In Britain, one penny was worth 1/60 of a British Silver Crown, the British denomination that is closest to the concept of a silver dollar or taler. In the Spanish system, a quarter-real, which was silver, was 1/32 of a dollar. There was not a significant role for a one-cent coin anywhere in 1787. Massachusetts “Cents” were really cents in commerce; they were valued as British halfpennies.
All or almost all Fugio Coppers were produced in New Haven, Connecticut on the premises that were also used for minting Connecticut Coppers. During 1787, Jarvis acquired controlling interest in that minting company.
Each Connecticut Copper was specified to weigh 144 grains (9.33 grams). There are 480 grains in a Troy ounce, though copper is not typically measured in Troy ounces. There are 7,000 grains in a pound.
Connecticut Coppers were intended to circulate alongside British halfpennies and similar coppers found in the U.S. Connecticut Coppers, however, were noticeably lighter than most British halfpennies.
During this time period British halfpennies weighed, on average, between 152 and 153 grains each, though weights varied considerably. Research by C. Wilson Peck is cited at length by Louis Jordan of the University of Notre Dame in Jordan’s online book. Among British halfpennies dating from 1770 to 1775 that were in the British Museum circa 1960, the average weight was 153.4 grains, with a range of 140.9 to 167.9! Presumably, Peck and Jordan are referring to uncirculated coins.
A central point is that any copper coin, pattern for copper coinage, pertinent token, imitation, counterfeit or fantasy that weighs between 140 and 165 grains would likely have been accepted at par with a British halfpenny by many businesses in the U.S. Small change was sorely needed, and it would not have made sense for merchants to analyze each copper every time it was spent.
The prevalence of coppers that were similar to British halfpennies is addressed in a discussion of imitation British halfpennies that were struck in New York. New Jersey Coppers were made in large quantities from 1786 to 1788 and were specified to each weigh 150 grains.
A British halfpenny was defined in Britain to be worth 1/24 of a British shilling, which was a silver coin. A sixpence coin was equal to one half of a shilling, and contained half as much silver. Four-and-one-half shillings were then close in silver content to a Spanish Milled Dollar. A British halfpenny (0.5 pence) had a face value equal to 1/108 (0.00926) of such a 4½ shilling amount (4s 6d = 54 pence sterling).
So, by circular reasoning, it could have been concluded that a British halfpenny was worth close to 1/100 of a Spanish Milled Dollar during the mid-1780s (1/108 = 0.00926, almost 1%). This is really a fluke rather than a use of a decimal system for coinage.
The 157.5 grain standard for Fugio Coppers was within the range of weights of coppers that already were circulating on a par with British halfpennies. The Fugio one-cent coin concept was an illusion in 1786, thought the 208-grain Chain cent was a real U.S. one-cent coin in 1793.
Besides, within a matter of weeks after mintage of Fugio Coppers began the exchange rates changed, and the specified weight for a Fugio Copper (157.5 grains) came to be worth an amount closer to 1/150 (0.0075) of a Spanish Milled Dollar. In another words, the value of a Fugio Copper as a fraction of a Spanish Milled Dollar was subject to market conditions and thus never could have been a one-cent coin in 1787. Is there any evidence of merchants in 1787 valuing Fugio Coppers at 1/100 of Spanish Milled Dollar?
There were then no one-cent coins. There was a market-determined price ratio of British halfpennies and their functional equivalents to Spanish Milled Dollars.
From 1793 to ’95, U.S. large cents were each specified to weigh 208 grains each, and this standard was reduced to 168 grains during 1795 as market conditions changed. In the 1780s, few merchants used decimal or decimal calculations for prices or transaction amounts. In sum, Fugio Coppers circulated in 1787, to the extent that they circulated at all, as pieces equivalent to British halfpennies (1/24 shillings) and not as one-cent coins, a denomination which would not have made sense to consumers and merchants at the time.
No National Mint During the 1780s
Each state had the authority to mint coins and authorize private firms to do so under the Articles of Confederation, the predecessor of the United States Constitution. The Articles of Confederation were ratified on March 1, 1781 and legally superseded by the Constitution in 1788. During the period from 1788 to 1790, the nation transitioned from being a loose federation under ‘The Articles’ to being a structured federal system with a mildly powerful central government under ‘The Constitution’.
Under ‘The Articles’, there was no executive branch of government. There were boards and committees that were under the direction of the legislature, the U.S. Congress. This was not, however, a parliamentary system, as the U.S. Congress then had little power. In a parliamentary system, the legislature is dominant and effectively rules the nation. Under ‘The Articles’, the national government needed permission from the states to implement major policies.
OLD CITY HALL – FEDERAL HALL, TRINITY CHURCH AND WALL STREET IN 1789
“The United States in Congress assembled shall never engage in a war,” according to Article IX, “nor coin money, nor regulate the value thereof … nor appropriate money … unless nine States assent,” meaning that at least nine state governments must approve a major measure for it to become law, including legislation relating to money or coinage.
Did nine state governments “assent” to the national government contracting with Jarvis to mint Fugio Coppers? If at least nine state governments did not approve the arrangements for Fugio Coppers, was it not illegal then to represent Fugio Coppers as U.S. coins?
In The Principles of Money (NY: Scribner, 1903, p. 453), economist J. Laurence Laughlin discusses monetary policies under the Articles of Confederation: “For the exercise of the power to coin money, borrow money, and emit bills of credit, the consent of nine states was necessary. The Congress, moreover, could not, of itself, make [coins or paper instruments] legal tender.”
Did the Treasury Board really have the authority to contract with Jarvis? Did any state recognize a Fugio Copper as a coin? If it was against the highest law of the land at the time, ‘The Articles’, for a Fugio Copper to be a coin, then Fugio Coppers are not U.S. coins. Did anyone assert that Fugio Coppers were legal tender? Are Fugio Coppers merely byproducts of a failed project? Further research is required for all such questions to be fairly answered.
J. Laurence Laughlin was one of the foremost economists from 1880 until the 1920s. He was then the leading analyst and theorist of the monetary history of the U.S. I am not agreeing or disagreeing with Laughlin’s political views. The immediate point is that Laughlin fairly analyzed the monetary order in the U.S. during the 1770s and ’80s.
“Although a mint was [called] for by a resolution of October 16, 1786, no coins were ever issued by the Confederation,” declares Laughlin (p. 456).
Given the volume, depth and subject matter of Laughlin’s writings and research, it is almost certain that he was familiar with Fugio Coppers. Clearly he is implying that Fugio Coppers were not coins, as Laughlin maintains that no U.S. coins were issued from 1781 to 1788 while ‘the Articles of Confederation’ were in effect. It is also important that he maintains that the congressional resolutions in 1786 and 1787 pertaining to a mint, coinage and monetary system “had no practical significance”!
The Morris Plan for a new coinage system failed to generate much support in 1783. Just a few patterns were made and coins never materialized. In 1784, though, Thomas Jefferson strongly argued for a decimal system of U.S. coinage, a bizarre and radical idea at the time.
Regarding the establishment of a national mint, a resolutions and a bill passed the U.S. Congress on September 20, 1786 and on October 16, 1786. The respective texts of each are easy to find on the Library of Congress web site. These are extremely similar in wording and scope. Both deal in general terms with the occupational positions in a mint and the logistics of its operation. Such reports, though, far from amounted to a detailed plan for a mint.
Earlier in 1786, members of Congress were focused on the details of a coinage system. In April 1786, the Board of Treasury issued an amazing report to the U.S. Congress, which outlines suggested systems for U.S. coinage. Elements of British, Spanish and French systems were considered as components or benchmarks.
The Resolution of August 8, 1786
On August 8, 1786, the U.S. Congress passed a resolution, perhaps stemming from the Treasury Board’s April report. The most pathbreaking aspect of this resolution was a bold and thorough plan for a decimal system of coinage.
Like the Mint Act of 1792 later, this resolution of August 8, 1786 called for copper half cent and copper one cent coins. An earlier resolution, passed on July 6, 1785, is very short and expresses support for a decimal system based upon “one dollar”–presumably similar to a Spanish Milled Dollar. A 1/200 copper coin was advocated in 1785.
The resolution of August 8, 1786, actually lists denominations with specifications. There was no mention of half dimes or quarters. Dimes, half dollars and silver dollars were explicitly featured, as were “Double Dimes” (20 cent pieces).
If the pertinent documents now on the Library of Congress web site are precisely reflective of the text of the resolution passed by the U.S. Congress in August 1786, dime was spelled as it has been for a very long time, with four letters – not ‘disme’!
Was this the spelling of ‘dimes’ in the original document of August 8, 1786 or did a printing company later change ‘disme’ to ‘dime’ so that the text would be easier to read? I consulted another source, Journals of The American Congress, 1774 to 1778: Volume IV, which was published by the Federal Government in 1823. For this same resolution, on August 8, dimes and “Double Dimes” are spelled the same way as they are in the documents found on the Library of Congress site.
Regardless of spellings in 1786, the spelling with an ‘s’ in 1792 relates to the function of half dismes and dismes as patterns, which were used to draw attention and make political statements. Disme was a pseudo-French word, which was understood on the European continent, as part of the translation of the title of an epic work on the decimal system.
This August 1786 resolution also calls for half eagles and eagles ($5 and $10 gold coins, respectively). While the silver and gold standards are similar to those in the Mint Act of 1792, the copper standard is much different. This resolution stipulates that 2.25 pounds (avoirdupois), equal to 15,750 grains, of copper coins shall equal one silver dollar.
Therefore, according to this resolution, a one-cent copper coin should weigh 157.5 grains.
This 157.5 grain standard was the requirement in the arrangements with James Jarvis for production of Fugio Coppers. It is understandable that many founding fathers and others would figure that there should be a copper coin that is worth one percent of the value of a Spanish Milled Dollar, on which the U.S. silver dollar would be based.
Since the 1600s, the Spanish Milled Dollar (Eight Reales coin) was the leader among silver crowns throughout the Western hemisphere. The concept in the U.S. of basing a decimal coinage system on the Spanish Milled Dollar was radical and unique. This concept was not codified until the Mint Act of 1792 and was not fully actualized until the 1840s when Spanish coins were no longer dominant among silver coins circulating in the U.S.
Apparently, the legislators in Massachusetts who authorized Massachusetts Coppers in 1786 were thinking along the same lines as many U.S. Congressmen. As far as I know, the Massachusetts “Cent” was the first in North America to feature the word ‘cent’ in the design of the coin, and ‘half cent’ was stated on Massachusetts half cents. Like Fugio Coppers, Massachusetts “cents” were specified to each weigh 157.5 grains. They were not accepted, however, as one-cent coins.
“Massachusetts was the only mint to conform to the federal resolution of July 6, 1785, establishing a decimal ratio of 100 cents to the Spanish Milled Dollar,” declares Louis Jordan. He probably meant to refer to the resolution of August 8, 1786, to which the authorizing act in Massachusetts did conform. Note, though, that Jordan is not referring to Fugio Coppers as cents in accordance with Congressional resolutions.
More importantly, Jordan notes that Massachusetts Cents “actually circulated at the same rate as Connecticut Coppers,” which weighed 144 grains each. Massachusetts Coppers “actually circulated at less than their stated value,” Jordan emphasizes. So, as Massachusetts Cents did not and could not circulate as one-cent coins, are they truly one-cent coins? There is not a clear answer to this question, but Massachusetts Cents have a stronger claim to being true one-cent claims than Fugio Coppers, which were of questionable legality and status from the moment that they were struck.
While a small number of citizens then kept abreast of Congressional resolutions and debates among the founding fathers, most people who spent Fugio Coppers or Massachusetts “Cents” were unaware of the meaning of the word ‘cent’! It was not part of the prevailing monetary order.
The 157.5 grain specification for Fugio Coppers likewise is consistent with the just-mentioned resolution of August 8, 1786. If nine state governments did not approve the production of Fugio Coppers, however, the whole arrangement with Jarvis might have been illegal. Even if nine state governments did “assent”, the bribery, fraud and racketeering pertaining to the arrangement to mint Fugios casts doubt upon the whole issue.
As it has been demonstrated that Fugio Coppers could not have circulated as one-cent coins, and that even many non-coins circulated at par with British halfpennies, the argument that Fugio Coppers are U.S. one-cent coins is not tenable. A Congressional resolution is a political position not a law.
There was no national coinage system under the Articles of Confederation. There were coinage reports, legislation and resolutions – essentially data, political statements and requests.
Market forces, availability of coins, a lack of relevant coppers in the Spanish system, and post-colonial realities altogether resulted in the British halfpenny being the standard copper during the 18th century. A farthing had half the value of a halfpenny, a quarter-penny.
There were no one-cent coins until 1793, partly because merchants and consumers were not thinking in terms of a decimal system, which was radical and inconsistent with traditions. In some ways, Fugio Coppers and Massachusetts Coppers were announcements and patterns that had practical uses because of their shape and the copper they contained; they circulated as British halfpennies while embodying clues that major politicians were attempting to start a new monetary order in the U.S that would be decimal in nature.
© 2017 Greg Reynolds
