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130-625: The Panic of 1819 unleashed a wave of popular resentment against the Second Bank of the United States (the "national bank"), which handled various fiscal duties for the U.S. government after its establishment in 1816. In addition to storing all government funds, the bank also made loans and acted as a regulator of other banks by periodically presenting banknotes for redemption. In 1829, a group of influential Philadelphians , including William Duane , editor William M. Gouge , and members of

260-399: A mint in order to facilitate trade. They are most often issued by a government . Coins often have images, numerals, or text on them. The faces of coins or medals are sometimes called the obverse and the reverse , referring to the front and back sides, respectively. The obverse of a coin is commonly called heads , because it often depicts the head of a prominent person, and the reverse

390-669: A "shilling" and twenty shillings a "pound": consistent with e.g. France. Debasement of coin was widespread. There were periods of significant debasement in 1340–60 and 1417–29, when no small coins were minted, and by the 15th century the issuance of small coin was further restricted by government restrictions and even prohibitions. With the exception of the Great Debasement , England's coins were consistently minted from sterling silver (silver content of 92.5%). A lower quality of silver with more copper mixed in, used in Barcelona,

520-456: A banker. Financier and co-director Stephen Girard was troubled at Jones' promotion, concerned that he could never provide disinterested leadership for the bank, and businessman John Jacob Astor doubted Jones' ability to wield the bank's regulatory powers effectively. Jones extended the institution's resources liberally in accordance with the post-war "national exuberance", generating large dividends for its stockholders. His administration of

650-742: A chronology that would leave out the contribution of the Greeks of Magna Graecia and attribute to the Etruscans the burden of introducing the coin in Italy. In this work, constant reference is made to classical sources, and credit is given to the origin of the Etruscan Lydia, a source supported by Herodotus, and also to the invention of coin in Lydia. Charlemagne , in 800 AD, implemented a series of reforms upon becoming " Holy Roman Emperor ", including

780-588: A day's subsistence, would have been too valuable for buying a loaf of bread. Maybe the first coins to be used for retailing on a large-scale basis were likely small silver fractions, Hemiobol, Ancient Greek coinage minted by the Ionian Greeks in the late sixth century BC. In contrast Herodotus mentioned the innovation made by the Lydians: So far as we have any knowledge, they [the Lydians] were

910-450: A down payment of one-fourth of the total cost and the balance in four annual payments. Failure to pay in full in five years meant forfeiture. Public land debt ballooned from $ 3 million in 1815 to $ 17 million in 1818. The U.S. Treasury accepted land payments in the form of banknotes issued by western and southern state banks. These institutions often lacked sufficient specie reserves to back up their vastly over-extended credit. As long as

1040-599: A general collapse of the American economy that persisted through 1821. The Panic heralded the transition of the nation from its colonial commercial status with Europe toward an independent economy. Though the downturn was driven by global market adjustments in the aftermath of the Napoleonic Wars , its severity was compounded by excessive speculation in public lands, fueled by the unrestrained issue of paper money from banks and business concerns. The Second Bank of

1170-518: A general publication, including the Etruscan coinage, attributing it the beginning to c.  560 BC in Populonia , a chronology that would leave out the contribution of the Greeks of Magna Graecia and attribute to the Etruscans the burden of introducing the coin in Italy. In this work, constant reference is made to classical sources, and credit is given to the origin of the Etruscan Lydia,

1300-659: A hero in a stereotypical manner, showing a bust or the full body but never an actual portrait, on their Sigloi and Daric coinage from c. 500 BC. A slightly earlier candidate for the first portrait-coin is Themistocles the Athenian general, who became a Governor of Magnesia on the Meander , c. 465–459 BC, for the Achaemenid Empire, although there is some question as to whether his coins may have represented Zeus rather than himself. Themistocles may have been in

1430-437: A legend. The most ancient inscribed coin known is from nearby Caria . This coin has a Greek legend reading phaenos emi sema interpreted variously as "I am the badge of Phanes", or "I am the sign of light". The Phanes coins are among the earliest of Greek coins; a hemihekte of the issue was found in the foundation deposit of the temple of Artemis at Ephesos (the oldest deposit of electrum coins discovered). One assumption

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1560-402: A little tin, zinc and especially nickel for their anti-corrosive, ductile and anti-fouling properties. Most coins presently are made of a base metal , and their value comes from their status as fiat money . This means that the value of the coin is established by law, and thus is determined by the free market only in as much as national currencies are used in domestic trade and also traded in

1690-498: A means to avoid purchasing the high-priced U.S. cotton. India enjoyed not only a longer growing season and lower cost of freight to Britain, but also more cotton-devoted land than the entire Louisiana Purchase. Tench Coxe , a Pennsylvanian political economist and delegate to the Continental Congress, warned of the "substantial evil" exhibited in the rivalry created by foreign competition. Coxe has been dubbed by many as

1820-535: A measure to prevent a future crisis. Banking regulation was seen as primarily a state responsibility, and several states passed regulations in the years following the panic that required banks to maintain certain fixed ratios of capital to ensure their ability to convert to specie. A further effect of the Panic of 1819 was increased support for protective tariffs for American industry. Vocal protectionists, such as Philadelphia printer Mathew Carey , blamed free trade for

1950-527: A proliferation of paper money . This practice tended to shift specie into the more conservatively lending New England banking apparatus, depleting the newer banks of their hard money reserves. In response, the U.S. government acquiesced in a suspension of specie payments from state banks in order to prolong the liberal wartime lending. The arrangement persisted in the war's aftermath, allowing old and new banks to profitably lend without regard to their hard money currency reserves. A speculative bubble formed as

2080-525: A result of these inflationary practices, threatening the health of the economy. By 1814, calls for a new central bank and a resumption of regulatory controls were heard from powerful capitalists and economic nationalists in the Republican party leadership. The Democratic-Republican party found itself in control of the national government with the collapse of the Federalist party at the end of

2210-467: A significant creditor and deplete their specie reserves. Failing this, the Second Bank of the United States would, in theory, cease to honor the banknotes of those financial institutions that refused to promptly settle their government accounts with hard money—a recipe for bankruptcy. The central bank's direct influence on inflationary lending was limited to those chartered banks whose paper currency

2340-535: A sound currency. In order to prosecute the Civil War, Congress passed the acts of 1863 and 1864 creating national banks. Exceptions were made to the prohibition against depositing government funds in private banks, and in certain cases payments to the government could be made in national bank notes. After the Civil War, the independent Treasury continued in modified form, as each successive administration tried to cope with its weaknesses in various ways. Secretary of

2470-407: A source supported by Herodotus, and also to the invention of coin in Lydia. Although many of the first coins illustrated the images of various gods, the first portraiture of actual rulers appears with the coinage of Lycia in the 5th century BC. No ruler had dared illustrating his own portrait on coinage until that time. The Achaemenids had been the first to illustrate the person of their king or

2600-536: A span of four years from 1816 to 1820. Employing these "stern procedures", Cheves placed the bank on sound footing in early 1819. A leading critic of the Second Bank of the United States during the Bank War would observe: "The bank was saved, and the people were ruined." Despite the Second Bank of the United States' inept management under the Jones-Cheves administrations, it was not the causative agent in

2730-518: A speculative agrarian land boom ensued in the South and West United States, encouraged by liberal terms for government public land sales. "The entire postwar American economy", observed historian George Dangerfield , was "based on a land boom". The inflationary bubble grew from 1815 to 1818, obscuring the general deflationary trends in world prices. With the failure to recharter the First Bank of

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2860-515: A suspension in 1914. Widespread suspensions were forestalled through coordinated actions during both the 1884 and the 1890 panics. A bank crisis in 1896 , in which there was a perceived need for coordination, is also sometimes classified as a panic. When the Panic of 1907 once again highlighted the inability of the system to stabilize the money market, Congress established the National Monetary Commission to investigate

2990-431: A tendency to issue too many bank notes , thereby triggering speculative booms and contributing to inequality. Gouge and Condy Raguet proposed the creation of an independent treasury system, whereby the federal government would store its funds as specie in government-controlled vaults, rather than relying on state banks or the national bank. During his second term, President Andrew Jackson removed federal deposits from

3120-515: A unique position in which he could transfer the notion of individual portraiture , already current in the Greek world, and at the same time wield the dynastic power of an Achaemenid dynasty who could issue his own coins and illustrate them as he wished. From the time of Alexander the Great , portraiture of the issuing ruler would then become a standard, generalized, feature of coinage. The Karshapana

3250-662: A while, the copper in US pennies was worth more than one cent, so people would hoard pennies and then melt them down for their metal value. It cost more than face value to manufacture pennies or nickels, so any widespread loss of the coins in circulation could be expensive for the US Treasury . This was more of a problem when coins were still made of precious metals like silver and gold, so strict laws against alteration make more sense historically. 31 CFR § 82.2(b) goes on to state that: "The prohibition contained in § 82.1 against

3380-890: Is also influenced to some extent by those factors, but is largely based on the value of their gold, silver, or platinum content. Sometimes non-monetized bullion coins such as the Canadian Maple Leaf and the American Gold Eagle are minted with nominal face values less than the value of the metal in them, but as such coins are never intended for circulation, these face values have no relevance. Collector catalogs often include information about coins to assists collectors with identifying and grading. Additional resources can be found online for collectors These are collector clubs, collection management tools, marketplaces, trading platforms, and forums, Coins can be used as creative media of expression – from fine art sculpture to

3510-484: Is evident that some were official state issues. The earliest inscribed coins are those of Phanes , dated to 625–600 BC from Ephesus in Ionia , with the legend ΦΑΕΝΟΣ ΕΜΙ ΣHΜΑ (or similar) ("I am the badge/sign/mark of Phanes/light") or just bearing the name ΦΑΝΕΟΣ ("of Phanes"). The first electrum coins issued by a monarch are those minted by king Alyattes of Lydia (died c.  560 BC ), for which reason this king

3640-491: Is known as tails . The first metal coins – invented in the ancient Greek world and disseminated during the Hellenistic period – were precious metal –based, and were invented in order to simplify and regularize the task of measuring and weighing bullion (bulk metal) carried around for the purpose of transactions. They carried their value within the coins themselves, but the stampings also induced manipulations, such as

3770-410: Is seen as a "critical precedent for democratic action". On a more contemporary note, many economic historians today agree that the Panic of 1819 marked the United States' entrance into the modern business cycle. Coin A coin is a small object, usually round and flat, used primarily as a medium of exchange or legal tender . They are standardized in weight, and produced in large quantities at

3900-489: Is sometimes mentioned as the originator of coinage. The successor of Alyattes, king Croesus (r. c. 560–546 BC), became associated with great wealth in Greek historiography. He is credited with issuing the Croeseid , the first true gold coins with a standardized purity for general circulation. and the world's first bimetallic monetary system c. 550 BC. Coins spread rapidly in the 6th and 5th centuries BC, leading to

4030-562: Is that Phanes was a mercenary mentioned by Herodotus, another that this coin is associated with the primeval god Phanes or "Phanes" might have been an epithet of the local goddess identified with Artemis. Barclay V. Head found these suggestions unlikely and thought it more probably "the name of some prominent citizen of Ephesus". Another candidate for the site of the earliest coins is Aegina , where Chelone ("turtle") coins were first minted c. 700 BC. Coins from Athens and Corinth appeared shortly thereafter, known to exist at least since

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4160-776: Is the earliest punch-marked coin found in India, produced from at least the mid-4th century BC, and possibly as early as 575 BC, influenced by similar coins produced in Gandhara under the Achaemenid empire, such as those of the Kabul hoard , or other examples found at Pushkalavati and in Bhir Mound . In China , early round coins appeared in the 4th century BC and were adopted for all China by Emperor Qin Shi Huang Di at

4290-651: The 2€ commemorative coins and U.S. America the Beautiful quarters . Early metal coinage came into use about the time of the Axial Age in West Asia , in the Greek world, in northern India, and in China. Metal ingots , silver bullion or unmarked bars were probably in use for exchange among many of the civilizations that mastered metallurgy. The weight and purity of bullion would be the key determinant of value. In

4420-702: The Achaemenid Empire in the early 6th century BC, coinage was yet unknown. The barter system, as well as silver bullion were used instead for trade. The practice of using silver bars for currency also seems to have been current in Central Asia from the 6th century BC. Coins were an evolution of "currency" systems of the Late Bronze Age , when various cultures used standard-sized ingots and tokens such as knife money to store and transfer value. Phoenician metal ingots had to be stamped with

4550-492: The Austrian occupation of Genoa in 1746. Variations in the mass of precious metals used in international trade, particularly in imports of spices and textiles into Europe, explain the numerous monetary reforms that occurred in this period. The effect of these transactions on the available reserves of gold and silver was at the origin of the various monetary reforms, which changed the price of silver compared to gold. Faced with

4680-821: The British sovereign minted by the United Kingdom, the American Gold Eagle minted by the United States, the Canadian Gold Maple Leaf minted by Canada, and the Krugerrand , minted by South Africa. While the Eagle and Sovereign coins have nominal (purely symbolic) face values, the Krugerrand does not. Commemorative coins usually serve as collectors items only, although some countries also issue commemorative coins for regular circulation, such as

4810-596: The Venetian sequin , minted from 1284 to 1797, was the most prestigious gold coin in circulation in the commercial centers of the Mediterranean Sea . The Florentine florin was the first European gold coin struck in sufficient quantities since the 7th century to play a significant commercial role. The Florentine florin was used for larger transactions such as those used in dowries, international trade or for tax-related matters. Genoese coins became important in

4940-565: The Walker tariff . The 1846 act provided that the public revenues be retained in the Treasury building and in sub-treasuries in various cities. The Treasury was to pay out its own funds and be completely independent of the banking and financial system of the nation. All payments by and to the government were to be made in either specie or Treasury Notes . The separation of the Treasury from

5070-457: The War of 1812 . The British government effectively relinquished its effort to impose mercantilist policies on the United States, preparing the way for the development of free trade and the opening of America's vast western frontier. Europe was undergoing a period of disorganization as it readjusted to peacetime production and commerce in the aftermath of the Napoleonic Wars . The general effect

5200-465: The Working Men's Party , presented an influential report claiming that banks "laid the foundation of artificial inequality of wealth, and, thereby, artificial inequality of power." In 1833, Gouge published A Short History of Paper Money and Banking in the United States , which became an influential work among hard money advocates. Gouge and others who favored hard money policies held that banks had

5330-594: The presidency of Martin Van Buren , on May 10, 1837, some state banks in New York , running out of hard currency reserves, suddenly refused to convert paper money into gold or silver . Other financial institutions throughout the nation quickly followed suit. This financial crisis , the Panic of 1837 , was followed by a five-year depression in which banks failed and unemployment reached record highs. To deal with

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5460-418: The siege of Pavia in 1524. Auxiliary coins consisted, among the Greeks and Romans as in our modern societies, of coins strongly linked to copper. In particular, the red copper alloy was used for its physical properties, suitable for objects constantly subjected to manipulation: malleability, resistance to impacts, wear and corrosion (only gold has better resistance to corrosion). This alloy was often mixed with

5590-716: The "New Republicans", neofederalists led by Speaker of the House Henry Clay and Congressman John C. Calhoun . A three-part program dubbed the American System , incorporating some of the Hamiltonian projects championed by the Federalists, proposed "to create a stable economy through a centralized banking system, stimulated by an ever widening web of transportation and communication, through which domestic manufactures could eventually reach all parts of

5720-495: The "father of the American cotton industry". Cotton value began to waver in 1818, threatening to burst the speculative bubble. A general contraction in lending was indicated in response to these developments in Europe. In August 1818, with credit dangerously overextended, BUS branch offices began to reject all state-chartered banknotes under the direction of William Jones. Exceptions were made for notes used as revenue payments to

5850-709: The 16th century during the Golden age of Genoese banking , with the Spanish Empire funnelling its massive wealth from Spanish America through the Bank of Saint George . With the decline in the fortunes of the Genoese banks and the Spanish Empire in the 17th century, however, the Genoese lira also depreciated substantially. The silver scudo's value increased to 6.5 lire in 1646, 7.4 lire in 1671, and 8.74 lire just before

5980-459: The 5th and 4th centuries BC. The deposit of the hoard is dated to the Achaemenid period, in approximately 380 BC. The hoard also contained many locally produced silver coins, minted by local authorities under Achaemenid rule. Several of these issues follow the "western designs" of the facing bull heads, a stag, or Persian column capitals on the obverse, and incuse punch on the reverse. According to numismatist Joe Cribb , these finds suggest that

6110-938: The Bank of the United States assumed its regulatory functions. Under these "ominous terms" the bank was launched—its operational success already at risk. The eighteen branch offices of the SBUS in 1817 operated with little oversight from the Philadelphia headquarters, nor from the U.S. Treasury. This policy stemmed in part from a social philosophy that prevailed among Republicans during the Era of Good Feelings , which wished to Republicanize credit practices and encourage westward migration. The United States government encouraged settlement of these lands by offering public land at $ 2 per acre (160-acre minimum), though auctioneering tended to retard sales and raised prices slightly. The terms required

6240-621: The Ephesian Artemision (which would later evolve into one of the Seven Wonders of the Ancient World ). This was the site of the earliest known deposit of electrum coins. Anatolian Artemis was the Πότνια Θηρῶν ( Potnia Thêrôn , "Mistress of Animals"), whose symbol was the stag . It took some time before ancient coins were used for commerce and trade . Even the smallest-denomination electrum coins, perhaps worth about

6370-586: The Federal Reserve, and a 1920 act of the 66th Congress (The Independent Treasury Act of 1920) mandated the closing of the last subtreasuries in the following year, thus bringing the system to an end. Panic of 1819 The Panic of 1819 was the first widespread and durable financial crisis in the United States that slowed westward expansion in the Cotton Belt and was followed by

6500-556: The Greek city states of the classical period, their coins tended to be more mass-produced, as well as larger, and more frequently in gold. They often lacked the aesthetic delicacy of coins of the earlier period. Still, some of the Greco-Bactrian coins, and those of their successors in India, the Indo-Greeks , are considered the finest examples of Greek numismatic art with "a nice blend of realism and idealization", including

6630-419: The Greek word for rose is rhodon . The use of inscriptions on coins also began, usually the name of the issuing city. The wealthy cities of Sicily produced some especially fine coins. The large silver decadrachm (10-drachm) coin from Syracuse is regarded by many collectors as the finest coin produced in the ancient world, perhaps ever. Syracusan issues were rather standard in their imprints, one side bearing

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6760-596: The Lydian coinage as such, and continued to strike Lydia's lion-and-bull coinage. Original coins of the Achaemenid Empire were issued from 520 BC – 450 BC to 330 BC. The Persian Daric was the first truly Achaemenid gold coin which, along with a similar silver coin, the Siglos , represented the bimetallic monetary standard of the Achaemenid Persian Empire . The Achaemenid Empire already reached

6890-783: The Mediterranean and soon after to North Africa (including Egypt), Syria, Persia, and the Balkans. Coins came late to the Roman Republic compared with the rest of the Mediterranean , especially Greece and Asia Minor where coins were invented in the 7th century BC. The currency of central Italy was influenced by its natural resources, with bronze being abundant (the Etruscans were famous metal workers in bronze and iron) and silver ore being scarce. The coinage of

7020-733: The Mexican Mint was established on May 11, 1535, by order of the Spanish king following the Spanish colonization of the Americas . Opened in April 1536, this mint had the right to mint silver Spanish real which became the basis of the monetary system of the Spanish Empire . Louis XIII had the Louis d'or minted in 1640 to compete with these coins. The first attested siege coins appeared at

7150-420: The Panic of 1819 or its aftermath. The historical processes contributing to the panic and depression, which were beyond the bank's control, included the European market fluctuations, obstruction from the numerous private banks to federal regulations and the widespread ignorance among lenders and borrowers as to the new financial mechanisms that made possible the credit expansion and land boom. The bank's role

7280-433: The Panic, these precarious economic conditions—a manifestation of "rapid expansion, speculation and wildcat banking " —prevailed in the South and West, where the economic collapse would be most severe. By July 1818, the Second Bank of the United States had demand liabilities exceeding $ 22.4 million, whereas its specie fund stood at $ 2.4 million—a 10:1 ratio and double the 5:1 ratio considered sustainable. The onset of

7410-438: The Persian Empire after 546 BC, following his conquest of Lydia and the defeat of its king Croesus , who had put in place the first coinage in history. With his conquest of Lydia, Cyrus acquired a region in which coinage was invented, developed through advanced metallurgy, and had already been in circulation for about 50 years, making the Lydian Kingdom one of the leading trade powers of the time. It seems Cyrus initially adopted

7540-524: The Relief for Public Land Debtors Act. The bill allowed debtors who owed money on land purchased from the government to keep the part of land they had already paid for and relinquish the remaining amount. It further extended the schedule of payments by several years, with a discount for quick payment. With the exception of New England states, most of the country strongly supported the measure. Many state legislatures, particularly in rural western states, passed extra relief measures for debtors. Another response to

7670-423: The Roman Republic started with a few silver coins apparently devised for trade with Celtic in northern Italy and the Greek colonies in Southern Italy, and heavy cast bronze pieces for use in Central Italy. The first Roman coins , which were crude, heavy cast bronzes, were issued c. 289 BC. Amisano, in a general publication, including the Etruscan coinage, attributing it the beginning to about 550 BC in Populonia ,

7800-439: The SBUS branch offices in the North and East, to fuel another cycle of excessive lending. The SBUS branch banks, emulating their wildcat counterparts, injected so much of their own paper money into circulation that they negated their regulatory capacity: they could not with impunity demand specie payments from state banks that held public deposits without being presented with their own script for convertibility in return. Prior to

7930-401: The South and West joined with monied interests in the mid-Atlantic states. Pro-SBUS Congressman John C. Calhoun argued forcefully that the federal government had a constitutional obligation to regulate bank credit as part of the national money supply. In January 1816, he introduced a bill of incorporation in the House of Representatives for a government bank (which would become the Second Bank of

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8060-449: The Treasury Leslie M. Shaw (1902–1907) made many innovations; he attempted to use Treasury funds to expand and contract the money supply according to the nation's credit needs. Nonetheless, during this period the United States experienced several economic panics of varying severity. Economists Charles Calomiris and Gary Gorton rate the worst panics as those leading to widespread bank suspensions—the panics of 1873 , 1893 , and 1907 , and

8190-407: The U.S. Treasury with its own metallic reserves. The SBUS, in turn, anticipated that the state banks which had issued the paper money would, upon demand, redeem their currency with gold and silver—"convertibility"—reimbursing the government bank. In order to remain solvent, the state banks would, ideally, constrain their lending of paper money—however profitable—so as not to allow the SBUS to become

8320-420: The U.S. Treasury. In October 1818, the U.S. Treasury demanded a transfer of $ 2 million in specie from the BUS to redeem bonds on the Louisiana Purchase . State banks in the West and South, unable to provide the required specie, began to call in their loans on the heavily mortgaged lands they had financed. Cash-poor farmers and speculators found their land values dropping 50% to 75%. Banks began foreclosing on

8450-605: The Union". Advocates of the American System called for a protective tariff to encourage manufacturing, a federally funded program for internal improvements and a revival of the First Bank of the United States to regulate finance. In the crucible of the War of 1812 , the Treasury of the United States had been compelled to offer $ 16 million in government war bonds in order to stave off bankruptcy due to military costs and wartime loss of revenue. Financier Stephen Girard , business magnate John Jacob Astor and merchant David Parish bought up these government securities and rescued

8580-421: The United States (SBUS), itself deeply enmeshed in these inflationary practices, sought to compensate for its laxness in regulating the state bank credit market by initiating a sharp curtailment in loans by its western branches, beginning in 1818. Failing to provide gold specie from their reserves when presented with their own banknotes for redemption by the SBUS, the state-chartered banks began foreclosing on

8710-404: The United States in 1811, regulatory influence over state banks ceased. Credit-friendly Republicans—entrepreneurs, bankers, farmers—adapted laissez-faire financial principles to the precepts of Jeffersonian political libertarianism —equating land speculation with "rugged individualism" and the frontier spirit. Private banking interests and their allies sought to evade or resist any threat to

8840-504: The United States was not immune to the chaos that afflicted Europe, which contributed to the Panic of 1819. American manufacturers faced U.S. markets swamped with British products, produced by low-paid workers and priced well below competitive rates and forcing many factories out of business. Continental Europe, its agrarian output crippled by the recent war, offered new markets for American staple crops, particularly cotton, wheat, corn and tobacco. As prices soared for agricultural goods,

8970-570: The United States). The measure was passed by Congress and signed by President James Madison in April 1816. Opposition to the Bank came from two fronts: the orthodox Tertium quids (or "Old Republicans") who reflexively regarded an enlargement of the central government as an assault on personal liberty and a violation of Jeffersonian agrarianism, and state-chartered private banking interests, who favored paper money but considered federal regulation of local banking operations to be anti-Republican. These ideologies and interests would be arrayed against

9100-407: The War of 1812. Some of the traditional Jeffersonian agrarian precepts—especially strict construction of the Constitution—had softened due to difficulties during the war arising from a lack of infrastructure, unregulated banking and a shortage of manufactured material, as well as the prospect of developing the vast natural resources with westward expansion. A mild nationalist outlook took hold among

9230-435: The Zhou coins are divided up into categories of knives, spades, and round coins, it is apparent from archaeological finds that most of the various kinds circulated together. A hoard found in 1981, near Hebi in north Henan province, consisted of: 3,537 Gong spades, 3 Anyi arched foot spades, 8 Liang Dang Lie spades, 18 Liang square foot spades and 1,180 Yuan round coins, all contained in three clay jars. The Hellenistic period

9360-546: The amount of copper in each penny. Since mid-1982, United States pennies are made of 97.5% zinc, with the remaining 2.5% being a coating of copper. Extreme differences between face values and metal values of coins cause coins to be hoarded or removed from circulation by illicit smelters in order to realize the value of their metal content. This is an example of Gresham's law . The United States Mint , in an attempt to avoid this, implemented new interim rules on December 14, 2006, subject to public comment for 30 days, which criminalized

9490-719: The ancient city Guanzhuang in Henan province in China . The factory produced shovel-shaped bronze coins between 640 B.C. and 550 B.C., making it the oldest securely-dated minting-site. The earliest coins are mostly associated with Iron Age Anatolia of the late 7th century BC, and especially with the kingdom of Lydia . Early electrum coins (an alluvial alloy of gold and silver, varying wildly in proportion, and usually about 40–55% gold) were not standardized in weight, and in their earliest stage may have been ritual objects, such as badges or medals, issued by priests. The unpredictability of

9620-735: The bank resonated with Secretary Crawford's lenient policy with regard to public land receipts in the form of chartered-bank script when specie was scarce nationally. The Second Bank of the United States began operations in January 1817 as fiscal agent of the United States Treasury. After February 20, 1817, the SBUS was scheduled to begin to receive all government revenue in legal tender as required by its charter. Hard money shortages prevailed because U.S. imports exceeded exports and Peruvian and Mexican gold and silver sources failed to replenish specie reserves. Due to this scarcity,

9750-668: The banking system was never completed, however; the Treasury's operations continued to influence the money market, as specie payments to and from the government affected the amount of hard money in circulation. Although the Independent Treasury did restrict the expansion of credit, it also posed a new set of economic problems. In periods of prosperity, revenue surpluses accumulated in the Treasury, reducing hard money circulation, tightening credit, and restraining inflation of trade and production. In periods of depression and panic, when banks suspended specie payments and hard money

9880-528: The central bank during the Andrew Jackson administration (1829–1837), erupting in a Bank War that would destroy the institution by 1833. The Second Bank of the United States began operations in January 1817 under a twenty-year charter. The revival of the Bank of the United States had two primary objectives: first, to reverse the post-war inflationary practices of state-chartered banks by inducing resumption of convertibility , and second, to expand

10010-415: The clipping of coins to remove some of the precious metal. Most modern coinage metals are base metal , and their value comes from their status as fiat money — the value of the coin is established by law. In the last hundred years, the face value of circulated coins has occasionally been lower than the value of the metal they contain, primarily due to inflation . If the difference becomes significant,

10140-488: The composition of naturally occurring electrum implied that it had a variable value, which greatly hampered its development. Most of the early Lydian coins include no writing ("myth" or "inscription"), only an image of a symbolic animal. Therefore, the dating of these coins relies primarily on archaeological evidence, with the most commonly cited evidence coming from excavations at the Temple of Artemis at Ephesus , also called

10270-473: The crisis, Van Buren proposed the establishment of an independent U.S. treasury. Such a system would, he asserted, take the politics out of the nation's money supply: the government would hold all of its money balances in the form of gold or silver and would be restricted from printing paper money at will, a measure designed to prevent inflation . Van Buren announced his proposal in September 1837; but that

10400-418: The depression and argued that tariffs would protect American prosperity. In general, support for tariffs was strongest in the mid-Atlantic states and was opposed by export-heavy southern states. The Panic brought attention, for the first time, to issues regarding debt-relief policy, as well as poor relief. City and state governments began to more effectively approach the public policy reform issues surrounding

10530-424: The development of Ancient Greek coinage and Achaemenid coinage , and further to Illyrian coinage . When Cyrus the Great (550–530 BC) came to power, coinage was unfamiliar in his realm. Barter and to some extent silver bullion was used instead for trade. The practice of using silver bars for currency also seems to have been current in Central Asia from the 6th century. Cyrus the Great introduced coins to

10660-465: The distinct monetary systems developed by Genoa , Venice or Florence , the widespread use in the 15th century of the silver thaler , of constant size and mass, allowed conversion operations to be limited and therefore exchanges facilitated. The thaler was the monetary unit of the Germanic countries until the 19th century and is considered the ancestor of the United States dollar . At the same time,

10790-606: The doors of India during the original expansion of Cyrus the Great , and the Achaemenid conquest of the Indus Valley is dated to c. 515 BC under Darius I . An Achaemenid administration was established in the area. The Kabul hoard , also called the Chaman Hazouri hoard, is a coin hoard discovered in the vicinity of Kabul , Afghanistan , containing numerous Achaemenid coins as well as many Greek coins from

10920-562: The end of 3rd century BC. The round coin, the precursor of the familiar cash coin , circulated in both the spade and knife money areas in the Zhou period, from around 350 BC. Apart from two small and presumably late coins from the State of Qin, coins from the spade money area have a round hole and refer to the jin and liang units. Those from the knife money area have a square hole and are denominated in hua (化). Although for discussion purposes

11050-469: The epicenters of numismatic art during the classical period. Led by the engravers Kimon and Euainetos, Syracuse produced some of the finest coin designs of antiquity. Amongst the first centers to produce coins during the Greek colonization of Southern Italy (the so-called " Magna Graecia ") were Paestum , Crotone , Sybaris , Caulonia , Metapontum , and Taranto . These ancient cities started producing coins from 550 BC to 510 BC. Amisano, in

11180-526: The financial disaster—had the effect of deepening the depression, undermining the recovery that was already underway. Through public land debt relief legislation, Cheves managed to reduce the bank's land debt by $ 6 million within a year of assuming his position as BUS President. Specie was also replenished to a great extent, increasing from $ 2.5 million in 1819 to $ 3.4 million by 1820 and further rising to $ 8 million by 1821. As an added consequence, banknotes in circulation were reduced by about $ 23 million within

11310-484: The financial panic has been variously described as "triggered", "pricked", or "precipitated" by the Second Bank of the United States when it initiated a sharp credit contraction beginning in the summer of 1818. The eruption of Mount Tambora in 1815 had created the Year Without a Summer , causing European agriculture to fail that year. The link between the frontier land boom and overseas markets for staple goods

11440-456: The first people to introduce the use of gold and silver coins, and the first who sold goods by retail. And both Aristotle (fr. 611,37, ed. V. Rose) and Pollux (Onamastikon IX.83), mention that the first issuer of coinage was Hermodike/Demodike of Cyme . Cyme was a city in Aeolia , nearby Lydia. Another example of local pride is the dispute about coinage, whether the first one to strike it

11570-461: The head of the nymph Arethusa and the other usually a victorious quadriga . The tyrants of Syracuse were fabulously rich, and part of their public relations policy was to fund quadrigas for the Olympic chariot race , a very expensive undertaking. As they were often able to finance more than one quadriga at a time, they were frequent victors in this highly prestigious event. Syracuse was one of

11700-466: The heavily mortgaged farms and business properties they had financed. The ensuing financial panic, in conjunction with a sudden recovery in European agricultural production in 1817, led to widespread bankruptcies and mass unemployment. The financial disaster and recession provoked popular resentment against banking and business enterprise, along with a general belief that federal government economic policy

11830-476: The idea of coinage and the use of punch-marked techniques was introduced to India from the Achaemenid Empire during the 4th century BC. More Achaemenid coins were also found in Pushkalavati and in Bhir Mound . According to Aristotle (fr. 611,37, ed. V. Rose) and Pollux (Onamastikon IX.83), the first issuer of Greek coinage was Hermodike of Kyme . A small percentage of early Lydian/Greek coins have

11960-435: The international market. Thus, these coins are monetary tokens , just as paper currency is: their value is usually not backed by metal, but rather by some form of government guarantee. Thus, there is very little economic difference between notes and coins of equivalent face value. Coins may be in circulation with face values lower than the value of their component metals, but they are never initially issued with such value, and

12090-517: The issuance of a standard coin, the silver penny. Between 794 and 1200 the penny was the only denomination of coin in Western Europe. Minted without oversight by bishops, cities, feudal lords and fiefdoms , by 1160, coins in Venice contained only 0.05g of silver, while England's coins were minted at 1.3g. Large coins were introduced in the mid-13th century. In England, a dozen pennies was called

12220-415: The issuing authority may decide to withdraw these coins from circulation, possibly issuing new equivalents with a different composition, or the public may decide to melt the coins down or hoard them (see Gresham's law ). Currently coins are used as money in everyday transactions, circulating alongside banknotes . Usually, the highest value coin in circulation (excluding bullion coins ) is worth less than

12350-559: The land boom continued, the Treasury Department was compelled to accept depreciated banknotes for its public land sales, undermining government efforts to pay down the war debt, but serving to stave off private bank failures. As the branch offices in the West and Southwest over-issued their SBUS notes to land boom farmers and speculators, they sought to restock their specie reserves by redeeming their own notes for hard money at

12480-651: The largest coins to be minted in the Hellenistic world: the largest gold coin was minted by Eucratides (reigned 171–145 BC), the largest silver coin by the Indo-Greek king Amyntas Nikator (reigned c. 95–90 BC). The portraits "show a degree of individuality never matched by the often bland depictions of their royal contemporaries further West" (Roger Ling, "Greece and the Hellenistic World"). Coinage followed Greek colonization and influence first around

12610-400: The late 6th century BC. The Classical period saw Greek coinage reach a high level of technical and aesthetic quality. Larger cities now produced a range of fine silver and gold coins, most bearing a portrait of their patron god or goddess or a legendary hero on one side, and a symbol of the city on the other. Some coins employed a visual pun: some coins from Rhodes featured a rose , since

12740-527: The law. The Democrats took back their congressional majority and the presidency in the 1844 elections, re-establishing the dominant position the party had lost four years earlier. President James K. Polk made the revival of the independent treasury and a reduction of the tariff the two pillars of his domestic economic program, and pushed both through Congress. He signed the Independent Treasury Act on August 6, 1846, one week after signing

12870-492: The lowest-value note. Coins are usually more efficient than banknotes because they last longer: banknotes last only about four years, compared with 30 years for a coin. Exceptions to the rule of face value being higher than content value currently occur for bullion coins made of copper , silver , or gold (and rarely other metals, such as platinum or palladium ), intended for collectors or investors in precious metals. Examples of modern gold collector/investor coins include

13000-438: The melting and export of pennies and nickels. Violators can be fined up to $ 10,000 and/or imprisoned for up to five years. A coin's value as a collector's item or as an investment generally depends on its condition, specific historical significance, rarity, quality, beauty of the design and general popularity with collectors. If a coin is greatly lacking in all of these, it is unlikely to be worth much. The value of bullion coins

13130-519: The name of a current ruler to guarantee their worth and value, which is probably how stamping busts and designs began, although political advertising – glorification of a state or of a ruler – may also play a role. In the late Chinese Bronze Age , standardized cast tokens were made, such as those discovered in a tomb near Anyang . These were replicas in bronze of earlier Chinese currency , cowrie shells, so they were named "Bronze Shell" . The world's oldest known coin factory has been excavated in

13260-488: The narrow monetary terms then current, limited governmental action to economizing and ensuring fiscal stability. He acquiesced in suspending specie payments to bank depositors, setting a precedent for the Panics of 1837 and 1857 . Although Monroe agreed that improved transportation facilities were needed, he refused to approve appropriations for internal improvements without constitutional amendments. In 1821, Congress passed

13390-494: The nation's credit. Through their influence, and in alliance with Republican Congressmen John C. Calhoun and Henry Clay, they sought to augment their investment by proposing that the securities be exchangeable for stock in a new central bank, the Second Bank of the United States (SBUS). Secretary of State James Monroe supported the new bank initiative, wishing to bind these highly regarded and pro-Republican business figures to government financial operations. Republicans in

13520-410: The national bank and shifted them to state-chartered banks that became known as " pet banks ". The Jackson administration also banned the pet banks from issuing banknotes of denominations of less than $ 20. The federal charter of the national bank had expired by the end of Jackson's second term, but many hard money advocates still favored the removal of all federal deposits from all banks. Two months into

13650-461: The opportunities for the common man to acquire bank credit, promoting enterprise and an orderly and profitable westward expansion. The regulatory mechanism of the SBUS resided in its fiscal duties as depository for the U.S. Department of the Treasury. As such, the bank accepted circulating state bank paper money from individuals, businesses and importers when they paid taxes or custom duty fees. The central bank immediately credited these payments to

13780-656: The panic and to propose legislation to regulate banking. The commission's work culminated in the Federal Reserve Act of 1913, and the demise of the Independent Treasury System. As a result, the Federal Reserve Act established the current U.S. Federal Reserve System and authorized the printing of Federal Reserve Notes (now commonly known as the U.S. Dollar ). Government funds were gradually transferred from subtreasuries to

13910-416: The panic was monetary expansion, primarily at the state level. In Tennessee, Kentucky and Illinois, state banks suspended specie payments and issued large amounts of inconvertible notes. However, most other states avoided inflationist policies and enforced the payment of specie. Every state witnessed vigorous debate on the merits of each policy. Treasury Secretary Crawford advocated restricting bank credit as

14040-570: The penny machines that can be found in most amusement parks. In the Code of Federal Regulations (CFR) in the United States there are some regulations specific to nickels and pennies that are informative on this topic. 31 CFR § 82.1 forbids unauthorized persons from exporting, melting, or treating any 5 or 1 cent coins. This has been a particular problem with nickels and dimes (and with some comparable coins in other currencies) because of their relatively low face value and unstable commodity prices. For

14170-483: The poor; a classification system was also created (able-bodied vs. disabled, temporary vs. long-term, etc.). Public attention to solving poverty issues consequently led to public education systems. Public support was great once again for protective tariffs. However, when the " Tariff of Abominations " was implemented in 1828, regional discontent led to the outbreak of the Nullification Crisis . The Crisis

14300-419: The post-war years, the collapse of the export market after the bumper crop of 1817 in Europe, low prices of imports from Europe which forced American manufacturers to close, financial instability resulting from both the excessive expansion of state banking after 1811 and the unsound policies of the Second Bank of the United States, and widespread unemployment." President Monroe, interpreting the economic crisis in

14430-476: The private banks. The directors of the SBUS, with Secretary Crawford's imprimatur, promised to refrain from collecting public deposits held in state banks until July 1, 1817. Moreover, they agreed to greatly expand the bank's credit—at a discount of $ 6 million—before proceeding to collect public debt from the state institutions. In effect, the central bank transformed the private banks into its creditors, inviting them to draw specie from SBUS reserves months before

14560-436: The profitability of their local enterprises, including the regulatory influence of a government bank limiting easy credit. There followed an enormous expansion in state-chartered banking, with chartered institutions increasing from 88 in 1811 to 208 in 1815, mostly in the mid-Atlantic states. During the War of 1812 (1812–1815) with the United Kingdom, the American government turned to these new banks for loans, encouraging

14690-424: The properties and transferring them to their creditor: the Second Bank of the United States. When news arrived in January 1819 that the value of cotton had broken—dropping 25% in a single day—the ensuing panic drove the country into recession. Williams Jones resigned from his position as BUS president and was replaced by South Carolinian Langdon Cheves . The limited curtailment policy initiated by William Jones

14820-635: The regulated banking system, especially in the regions of wildcat banking . President of the United States James Madison and Secretary of the Treasury Alexander Dallas fully approved the elevation of William Jones —one of the federally appointed Bank directors—to SBUS President in October 1816. Jones, formerly a member of Madison's cabinet, owed his promotion more to his political acumen than his skills as

14950-493: The regulatory influence of the central bank—and diminish the large profits derived from the issue of unredeemable paper. On February 1, 1817, an association of bankers from Pennsylvania, New York, Maryland and Virginia met with the new Secretary of the Treasury William H. Crawford and SBUS President William Jones, arranging a compromise which undermined the ability of the central bank to assert its role as creditor to

15080-415: The shortfall only arises over time due to inflation , as market values for the metal overtake the face value of the coin. Examples are the pre-1965 US dime, quarter, half dollar, and dollar (containing slightly less than a tenth, quarter, half, and full ounce of silver, respectively), US nickel , and pre-1982 US penny . As a result of the increase in the value of copper , the United States greatly reduced

15210-441: The terms of the bank's incorporation provided for private subscribers to invest with a combination of metallic currency and government stock. Further, they were granted an indulgence by Bank directors that effectively waived the specie requirement: ultimately, investors were allowed to purchase Bank shares on the security of the stock itself. Under its charter guidelines, the SBUS was expected to acquire specie totaling $ 28 million by

15340-516: The time it opened for business; but with only $ 2 million secured when it commenced operations, the bank was compelled to purchase specie at usurious rates from the London financial markets in 1817 and 1818, overburdening SBUS credit. As the February 20 deadline approached to resume convertibility , the private (i.e. state-chartered) banks withheld cooperation from SBUS officials, loath to submit to

15470-587: Was Pheidon of Argos, or Demodike of Kyme (who was wife of Midas the Phrygian and daughter of King Agammemnon of Kyme), or Erichthonios and Lycos of Athens, or the Lydians (as Xenophanes says) or the Naxians (as Anglosthenes thought). Many early Lydian and Greek coins were minted under the authority of private individuals and are thus more akin to tokens or badges than to modern coins, though due to their numbers it

15600-476: Was a decline in prices throughout the Western world, due to a scarcity of gold and silver specie . Britain had advanced its industrial capacity to fully meet its wartime demands, but post-war continental Europe was temporarily too devastated to absorb Britain's surplus manufactured goods. Moreover, European agriculture production, exhausted by years of warfare, was unable to feed its own population. The economy of

15730-530: Was able to pay its debts, and met every liability without trouble. In his December 7, 1857 State of the Union message, President James Buchanan said: Thanks to the independent treasury, the government has not suspended [specie] payments, as it was compelled to do by the failure of the banks in 1837 . It will continue to discharge its liabilities to the people in gold and silver. Its disbursements in coin pass into circulation and materially assist in restoring

15860-573: Was called billon . The first European coin to use Arabic numerals to date the year in which the coin was minted was the St. Gall silver Plappart of 1424. Italy has been influential at a coinage point of view : the Florentine florin , one of the most used coinage types in European history and one of the most important coins in Western history, was struck in Florence in the 13th century , while

15990-530: Was characterized by the spread of Greek culture across a large part of the known world. Greek-speaking kingdoms were established in Egypt and Syria , and for a time also in Iran and as far east as what is now Afghanistan and northwestern India . Greek traders spread Greek coins across this vast area, and the new kingdoms soon began to produce their own coins. Because these kingdoms were much larger and wealthier than

16120-419: Was dramatically revealed in 1817, when Europe finally recovered from its post- war harvest shortages and began producing bumper crops. American planters and farmers, who had expanded production to exploit the European demand, discovered agricultural prices declining by half, even as production increased. Southwestern plantations were devastated when Britain began to increase its imports of East India cotton as

16250-417: Was extensively used to remit funds to the government (i.e. tax and duty payments). The SBUS and its branches had little or no direct control over commercial paper emitted by unchartered lending outfits: "All that was necessary to start a bank…was plates, presses and paper; 'a church, a tavern, a blacksmith shop' would be a suitable site." These unregulated credit operations would "to some extent interpenetrate"

16380-515: Was fundamentally flawed. Americans, many for the first time, became politically engaged so as to defend their local economic interests. The New Republicans and their American System —tariff protection, internal improvements , and the SBUS—were exposed to sharp criticism, eliciting a vigorous defense. The United States and the United Kingdom signed the Treaty of Ghent on December 24, 1814, ending

16510-426: Was hoarded, the government's insistence on being paid in specie tended to aggravate economic difficulties by limiting the amount of specie available for private credit. In 1857, another panic hit the money market. However, whereas the failure of banks during the Panic of 1837 caused the government great embarrassment, bank failures during the Panic of 1857 did not, as the government, having its money in its own hands,

16640-501: Was properly one of restraint, so as to automatically suppress the volatility in financial markets—but not to prevent these boom-bust episodes. "If the [Second Bank of the United States] had been wisely managed from the beginning" writes historian George Dangerfield, "it could not have prevented the panic; it could only have modified its effects." "The Panic of 1819 … was compounded by many factors—overexpansion of credit during

16770-399: Was rigorously applied by his successor, former Congressman from South Carolina, Langdon Cheves . Among his promoters were U.S. President James Monroe, BUS directors Stephen Girard and Nicholas Biddle and those stockholders who wanted Bank leadership that was fiscally conservative and immune to political influence. The tight money policy Cheves implemented—a principled effort to cope with

16900-473: Was too much for state banking interests, and an alliance of conservative Democrats and Whigs prevented it from becoming law until 1840, when the 26th Congress passed the Independent Treasury Act of 1840 (ch. 41, 5  Stat.   385 ). Although signed into law on July 4, 1840, it lasted only one year; for the Whigs, who won a congressional majority and the presidency in the 1840 elections, promptly repealed

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