Spring 2001 |
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When Foreign Coins
|
Eagles | $10.00 |
Old Eagles (1834) | $10.50 |
Carolina and Georgia $5 pieces, each | $4.75 |
Sovereigns | $4.80 |
Dragon Sovereign | $4.80 |
Guineas English Gold by Act March 3, 1843, legal tender at 94¢, 6 mills per pennyweight |
$5.00 |
Doubloons (should weigh as a good dollar) Spanish gold legal tender at 89¢, 3 mills per pennyweight. |
$16.00 |
Napoleons ( 20 franc) | $3.83 |
Louis d'Or French gold legal tender at 92¢, 9 mills per pennyweight. |
$4.50 |
Doubloons Mexican gold legal tender at 89¢, 9 mills per penny weight. |
$15.50< |
Ten Thalers (all dates) | $7.80 |
FR d'Or Denmark or Prussia | $3.90 |
10 Guilders | $4.00 |
Johannes, John V (but since most Johannes and 1/2 Joes are light they should be taken at a rate of 80¢ for the weight of each 5¢ piece) |
$17.00 |
Moidore (Brazil) | $4.87 |
Ducat (Netherlands, Denmark,, Prussia) | $2.20 |
Crown (Portugal) Maria II | $5.80 |
Zervonitz (Russia) | $2.00 |
Xeriff (Turkey | $2.30 |
Pistole (Italy) | $3.25 |
Unblemished Spanish Pillar Dollars | 2 % premium |
Spanish halves, quarters, etc. | at par or 1/2% discount if worn |
Mexican Dollars | 1/2 to 1/4 premium depending on wear |
Five Franc (France) | $0.93 |
Two Franc | $0.36 |
One Franc | $0.18 |
French Crowns | $1.06 |
English Crown | $1.15 |
Half Crown | $0.57 |
English Shilling | $0.23 |
Thalers | $0.65 |
Postareens (with Head) | $0.18 |
Pistareens (with Cross) | $0.16 |
One Guilder | $0.36 |
Each merchant would have to be a numismatist to recognize each of these foreign coins. To make things a bit easier, merchants could buy coin-weighing scales with the counter weights in the shape of, and bearing the same devices as, the actual foreign coins they were to be weighing. It is also odd to note that Carolina and Georgia five dollar gold coins would only be accepted at $4.75 as they were known to be of full weight and purity even though they were struck by private companies.
The English gold sovereigns also had two prices quoted-the coinage from early 1600s (with dragon) being quoted less because of wear. Oddly the older silver dollar-sized foreign coins received a greater premium than newer pieces. The older unblemished (no Chinese chop marks) Spanish pillar dollars passed at a 2% premium while the Mexican 8-reales only received a ¼ to ½ per cent premium depending on wear. Many of these large pieces stayed in bank vaults and only moved by the bag-full when large transactions were to be made; why spend a more valuable currency when the fractions of the Spanish and Mexican coins were trading at par or up to a 2% discount.
Where foreign coins circulated freely and where almost no one could be an expert on all types or design it was inevitable that counterfeiting would become common. The first recorded case in western New York came in 1811 when Rochester's first white settler Ebenezer Allan was acquitted of making Spanish Pillar Dollars in a "mint" just across the border in Canada and then spending them in his former homeland.
In 1845 another rash of counterfeit Spanish fractional coins were turning up in eastern suburbs of Rochester. So bad did it become that the citizens of Palmyra formed a committee to find and stop the bogus money changers. Six months passed with no clues and yet the Spanish coins kept turning up. Finally federal marshals from Buffalo were called in only to discover that two members of the committee to stop counterfeiters were actually members of the gang itself. Soon the gang was behind bars although one member did escape with dies for Spanish 8-reale pieces. Perhaps he set up his mint elsewhere. The Palmyra product was of fairly good quality, the coin die-struck on brass blanks and then plated with actual silver.
To see what circulated in the 1850s in Rochester, and by analogy in other mid-sized cities, it is well to look at what the local newspapers of the time were saying. The following comments appeared in the Rochester Daily Democrat:
April, 1851Twenty-five and fifty-cent pieces were scarce and no bank checks in those denominations were circulating. February, 1856The editor pleas to get rid of the U. S. half-cent piece. March, 1858Most business was being done in Spanish coins and a few English coins have come over from Canada. They are accepted as bullion and are requoted monthly. July 1, 1858Spanish quarter (2-reales) are taken as twenty-five cents. July 13, 1858Spanish coins have disappeared from circulation. July 14, 1858Canadian "sous" and bank tokens circulate. |
Soon a premium was being paid for any coin that could be turned in to local merchants. But, little hard cash was forthcoming and, it stayed scarce until after the Civil War.
In 1857 Congress finally repealed the laws giving legal tender status to any foreign coins then circulating in the United States. The Mint agreed to accept for exchange any Spanish or Mexican coins at the rate of 25¢,12½¢, and 6¼¢ for 2 reales, one-reale, and half-reales regardless of wear. Coins could be turned in for that rate only at the mints or sub-reasury offices. One catch, however, was that these worn silver coins could only be exchanged for two years, and only for the new copper-nickel 1857 or 1858 flying eagle one-cent pieces. the mint thus made and sold over 75,000,000 one-cent pieces and recoined over two million dollars worth of Spanish coins into American dimes and quarters. The seigniorage profit on striking and exchanging copper-nickel coins for silver covered the loss involved in buying extremely worn Spanish coins. The exchange of copper for silver also paid the entire operation of the mint for 1858.
Since banks and post offices were only paying 20¢, 10¢ and 5¢ for Spanish fractional silver of 2R, 1R, and ½R. there was profit to be made for anyone getting these coins to the Mint in Philadelphia.
The great foreign coin silver bullion rush was on. Wall Street brokers began advertising as much as 23¢ for a 2-reale coin. Thus a profit of between 8% and 20% was to be made and many dealers were out to make it. Still many Spanish coins were merely sold as bullion or turned in at the lower rate at the Post Office.
With so much foreign silver being exchanged for one-cent pieces commercial markets became flooded with the new small cents. (Cents before 1857 were approximately the size of a half-dollar but in pure copper.) Since this was a period before 7% sales taxes, before the time P. T. Barnum introduced prices always one or two cents below the next decimal number (i.e. 29¢, 39¢, 98¢), and since the A&P food markets only began pricing in units of less than a nickel, the one-cent coins had limited usefulness. They also had limited legal tender status and so banks would not accept unlimited quantities of them. By 1859 banks were discounting the flying eagle cents between 4% and 5%!
The Coinage Act of 1857 did a good job removing foreign coin from circulation with one blatant exception. In the 1880s unscrupulous employers bought Spanish "dollars" from brokers at a discount and then used them to pay out as wages at "face value" of 100 cents. Many were paid to miners in northern Pennsylvania and to factory workers in border towns in New York just over the Pennsylvania line. Retailers were forced to accept these foreign coins but raised their prices to make up for any loss. Since banks refused them, the merchants sold them to brokers at a discount and the cycle began all over. The bullion value of a Spanish dollar or piece of eight in 1883 was at about 85¢ . Thus the coal boss could pocket a profit of near 15% on his dealings. Soon, however the falling price of silver and the ever-increasing volume of coins shipped from the various American mints drove all foreign coin from circulation.
A colorful era had ended—one though, which few Americans would want to repeat.
Charles II of England half Crown coin. Though struck in the 1660s, worn copies circulated in the U. S. They are about the size of the half dollar.
After Mexico won its independence, it issued 8-Reale coins to the same standard as did Spain. The design now portrayed the Mexican Eagle.
United States 1803 $5 gold piece. Representing about 2 weeks labor, these coins seldom circulated.
1827 U. S. Mint issue 50¢ piece. This coin represented a good day's work at the time. They seldom circulated, however, and were kept by banks to back up paper notes they issued in higher denominations.
Counterfeit coins circulated and copper examples were
accepted by merchants as long as they were about the size and weight of
official coins.
Upper - Silver-plated brass Spanish 2-reale piece, perhaps made in Penn
Yan.
Lower - 2 British halfpennies struck in Kingstown, New York.