After the U.S. Civil War, two things were happening:   US mines were producing enormous amounts of silver, and fears of the economy meant precious-metal coins were being hoarded and weren’t in circulation.  As a growing nation in an international market, the U.S. wanted to engage in trade with foreign nations.   At the time, however, the standard coin for international trade, due to its high silver content, was the Mexican Peso.   This created a huge opportunity for the United States:  an excess of valuable silver, growing international trade, and a potential advantage in coinage led to the Trade Dollar.

The U.S. already had a silver dollar at the time, but Mexico was producing a silver peso with a higher silver purity, making their coins more valuable by weight than the U.S. dollar.   To even the field, the mint developed a slightly heavier coin, using the same purity metal as the previous dollar, which brought it on par with the peso.   To differentiate the more-valuable coin from the regular dollar, the U.S. marked its weight and purity on the reverse — “420 grains, .900 fine” — and identified them as a “Trade Dollar”, a coin for international trade rather than domestic commerce.   The U.S. Mint performed more direct service to citizens at the time, and anyone who produced a silver ingot could have it “converted” to Trade Dollars for a small fee.   Operators of silver mines found themselves with the ability to place their silver on the international market without a middle-man, which resulted in a quick increase in the U.S.’ trade wealth.    Millions of Trade Dollars were minted and were sent overseas; however, some didn’t make it.   The coin, as a precious metal, had a intrinsic value and people began using them in stateside transactions as well.

By 1876, however, the Trade Dollar ran into trouble.  Silver continued to flow into the market, both from domestic and foreign sources, which led to a drop in silver’s value as a precious metal.    There were hundreds of thousands of the coin in circulation in the U.S., being transferred at face value, while the actual metal value was far less.  This imbalance had been the source of much of the U.S.’ banking troubles in one way or another for decades, wobbling between devaluation and hoarding, and the Trade Dollar was now worth far less than its transactions.   For the one and only time in U.S. history, the Mint demonetized a circulating coin, declaring all Trade Dollars only as valuable as the precious metals inside as of July 1876.    For a short time, unscrupulous people bought the Trade Dollar at scrap value — pennies on the dollar — and spent them with whoever would take them.   Banks, however, wouldn’t accept them as deposits, and the declining silver market continued to reduce their value to a mere fraction of what they had been worth when backed by the Mint.  Foreign trade still used the silver coin so the Mint continued to produce them until 1878.   After that time, small numbers of the coin were produced as proofs for collectors.

Most Trade Dollars went into the furnaces of precious metal dealers, and those that ended up back at the Mint met a similar fate.   Many examples, however, did survive, especially in the coffers of those overseas traders who chose to accept the Trade Dollar in commerce.   The proofs produced from 1876 to 1885 have the most firmly-placed values, because there were a specific number produced and they are quite scarce.   There is no way to know how many pre-1876 coins are still in circulation, because it is likely many that went overseas were melted for their metal as well.    The majority of Trade Dollars that still exist bear the marks of the Far East traders who accepted them, called “chop marks”.   The traders cut the coins, or struck them deeply with an identifying character, to ensure that the metal was of the right softness and there wasn’t a copper layer beneath the silver.   As such, most coins in the collector’s market today have these chopmarks, while the unmarked ones tend to be proofs.  The proofs, due to their scarcity, sell for hundreds of dollars, while the rarer proofs from the 1880s are worth thousands.  Marked and circulated coins may sell for $50-$100, which is still far more than the value of the silver as a precious metal.   Much of that value is purely the collector’s market, due to this unique coin’s rarity and history.

Last week’s Hawaii quarter may have been the first time the island state has appeared on U.S. currency, but there were far more coins minted in Hawaii’s honor than most people know.  The Hawaiian dollar existed for only a short time, but reflects a unique time in the U.S.’ influence in the South Pacific.

Hawaii’s first modern government was established in the early 19th century, but it wasn’t until 1847 that they established a modern treasury and issued currency.   Prior to this time, the native currency of traders and visiting ships was used, and the local economy was so small it was not difficult to trade in foreign money.   As the economy and population grew, it became more difficult to exchange disparate monies, so a new, local money was established. The 1847 Kamehameha penny was the first coin issued by the Hawaiian government.  The penny was just the smallest denomination, with one “dala” (or dollar) was the largest, and several coins in between paralelling the structure and value of the U.S. dollar of the time, and all were minted in copper.   These coins were produced in small numbers, just enough for the small population on the island, by a private U.S. mint known for producing Hard Times tokens. The public didn’t completely take to the money, so the local banks had plenty to use, and no more coins were produced until the reign of King Kalakaua.

King Kalakaua was much more a product of Victorian times than his predecessors, and wished to make Hawaii a power in the South Pacific.  He increased trade with the United States, bringing more income to his small nation, and as such needed new money to improve his country’s economy.  The old coins were eliminated from circulation, and a new set of money was commissioned.

The U.S. Mint (as it still does today for other countries) produced this new coinage for Hawaii, and in 1883 they came up with Hawaii’s four requested coins: 1 dollar, 1/2 dollar, 1/4 dollar, and 1/8 dollar.  The first three matched U.S. coins of the same size and value, but the 1/8 dollar was a sticking point.   Coming up with a custom coin size would require a significant amount of mint re-working and new planchettes just for Hawaii, so a compromise was made:  Hawaii would have a dime instead.   While the 1/8 Dollar never reached regular circulation, in 1884 20 ‘proof’ sets of Hawaiian currency were produced by the Mint in Philadelphia…and the 1/8 dollar was included.    These 1/8th dollar coins are the most rare coin from Hawaii’s kingdom age, nearly impossible to find aside from private collections.    Pre-1880s coins are also extremely rare, due to their destruction and unlikeliness of leaving the islands at the time.   The Kamehameha pennies were slightly more common, because the lack of a penny denomination in the Kalakua era meant some people still circulated the old pennies for making change between the dime and the quarter-dollar coins.  Larger denominations were also produced as paper currency, up to a $500 bill, in the allegorical style of most Western Hemisphere money of the time.

In 1898, Hawaii officially became a territory of the  United States, and eventually the U.S. dollar supplanted their local currency.   Because the Hawaiian dollar was already based on U.S. dollar parity, it required no significant effort.   This wasn’t the end of special Hawaiian money, though.    In anticipation of World War II spreading throughout the South Pacific, the U.S. Treasury came up with a plan to avoid inadvertently financing Japan’s war.   Money distributed to Hawaiian banks was stamped with the word “HAWAII” on the front and back.    As long as Hawaii remained under U.S. control, those dollars would be the equivalent of a regular U.S. dollar, but if Japan were to invade and take over Hawaii, raiding their banks for funds, the Hawaii-stamped dollars would become as valuable as Monopoly dollars.  Thankfully, that day never came, but money stamped “Hawaii” remained in circulation for a short amount of time, a few returning in the pockets of sailors and soldiers stationed in the South Pacific.  These do not appear to have been minted specifically for Hawaii, but were stamps added to regular-circulation dollars in preparation for shipment to Hawaii, and most are of the 1934 and 1935 varieties.    As these eventually went back to the treasury and were destroyed, few still exist today.   While they can be relatively easy to find, they do demand a significant premium, $10-$50 depending on denomination and condition, and appeal to both numismatists and WWII collectors.

Today marks the eighth release, and the final of 2008, of a Presidential Dollar Coin.    Today’s man of honor:  Martin Van Buren.  Van Buren was Andrew Jackson’s secretary of state during his first term, served as Vice President through Jackson’s second term.   Van Buren held the distinction of being the first president born in the post-revolution, independent United States of America.   Van Buren was greatly devoted to Andrew Jackson and his policies, which may have resulted in his difficult presidency.

Elected in 1836,  Van Buren caught the brunt of the banking changes instituted by Jackson, as we learned with the last coin.   Andrew Jackson was opposed to a national banking system, government control over banks, and a national Mint.  This laissez faire attitude toward the young country’s finances resulted in the Panic of 1837, just a few months after Van Buren took office.  Jackson promoted transactions in ’specie’, or actual precious metals, but the lack of government oversight meant banks were underfunded for the currency they issued, and the process encouraged people to hoard precious metals for when the Real Crash happens.   Business-owners, threatened by a lack of currency and unable to secure reliable financing, combined their political complaints with their monetary needs and supported the minting of Hard Times Tokens.

Because Van Buren was a supporter of Jackson — going so far as to state his intent to follow in Jackson’s footprints during his inaguration — Van Buren was a solid target for people’s resentment due to the failing economy.   The Hard Times tokens were minted in cheap copper and bronze blends by private businesses and infividuals, and enthusiastically decorated with political satire of all kinds.   Van Buren’s face didn’t adorn many (if any)  of these tokens, although caricatures of Jackson were quite common.   Mostly, Van Buren was mentioned as Bad Things To Come, represented by things such as the ship “Experiment” seen to the left, breaking up in stormy seas, representing the attempt to do without banks, despite the lack of previous evidence that it works.    Van Buren’s inauguration statement, “I follow in the footsteps of my illustrious predecessor” stuck with him — but were combined with a picture of a jackass to show just what his opponents thought of him.   That donkey, originally used as a visual ersatz Andrew Jackson, eventually became the way the public saw the Democrat party, and was revised to be a donkey for today’s Democrat logo.  These Hard Times Tokens were some of the first lasting representations of the Democrats as a donkey.

These tokens weren’t exactly currency, although some businesses accepted them in lieu of actual monies, seeing that due to the bank’s actions and Jackson’s opposition to federal currency these Hard Times tokens had just about as much monetary value as the so-called ‘real thing’.  Mostly, they were passed around like political buttons today, demonstrating political affiliation and making a statement against the government at the time.    They fall under the same umbrella of collectors called ‘exonumia‘, or the collecting of coins that were never legal tender.    As far as the age and time period of these coins, more of these survived than one might think due to their novelty and connection to personal beliefs.    They also are a bit cheaper than pennies of the same area, and are often in a bit better shape because they had not been passed around as much as the currency of the time.  Be careful, though:  true ‘Hard Times’ tokens hail from this specific time period of the mid-1830s to very early 1840s, from just before to just after Van Buren’s presidency, although people will use the term as a way to hook some keyword searchers.   Uninformed or truth-flexing sellers could actually be selling later private-minted tokens unrelated to Van Buren’s “Hard Times”, or coin-like medals with a hole drilled in the top that were popular during presidential elections, but were not exactly used as tokens or currency.

While today’s new Presidential Dollar is the first real currency to bear Van Buren’s name, it won’t be the last.   Van Buren served his presidency without a wife, so his corresponding First Spouse $10 coin, to be released on November 26th,  will have the generic “Liberty” front.   The reverse, however, will have a nicely-carved relief of a young Van Buren reading a book, sitting beneath a tree.  This coin, unlike his presidential dollar, is minted in 1/2 ounce of pure gold — a fitting coin for a president who believed a country’s money should be minted in precious metals.  It only took 170 years to get there.

The U.S. Mint officially started producing the coins last Monday, November 3rd, but today marks the ceremonial release of the last Statehood Quarter in the decade-long series: Hawaii.   On August 21st, 1959, our current 50-state count was made official with the admission of Hawaii into the union, making it the last state admitted, and as such it was the last quarter released.  At noon (local time) today, Governor Linda Lingle and Edmund Moy of the U.S. Mint will  officially launch the state’s quarter at Bishop Square in Honolulu, although some quarters are currently in circulation.    The quarter has been available directly from the U.S. Mint since last Monday, and some banks have already received deliveries of the quarters for normal circulation.

The Statehood Quarter program started out as an idea from the Citizens Commemorative Coin Advisory Committee (now the Citizens Coinage Advisory Committee, in true bureaucratic fashion) in the early 1990s.   The Mint had been producing commemorative and collectible coins for many years, with custom coins commemorating the moon landing and the bicentennial being the most visible coins to make circulation.   The Committee wanted to move forward with a long-term, elaborate coin release for all 50 states, but the scope and cost of such a program seemed unmountable by some.    Momentum built with support of both the House and Senate, and the bill authorizing the monumentous program was signed into law by President Bill Clinton on 1 December 1997.   In just over a year, Delaware’s state quarter would be released, finding its way into Commemorative Quarter Folders, piggy banks, and soda machines all across the United States of American.

The general public has also been enormously proactive in collecting the quarters:  nearly half of the U.S. population has kept them as collectibles.   Through the arbitrage between the currency market versus the collectibles market, each quarter held as a collectible is a twenty-two cent profit for the U.S. Government, meaning billions have been saved by the Mint’s action in making this collectible series.   The numerous variety of collectible quarters has also helped produce a new generation of numismatists in kids who have grown up with a decade of watching their pockets for the missing member of their collection — and setting them in motion with the ongoing US Presidential Dollar series and a variety of other commemorative coins like last year’s Jefferson Nickel variations and next year’s Lincoln Penny variations.   An accounting windfall isn’t the only way that these statehood quarters have had a place in our economy:  the collector’s market has used the quarter as a basis for their own profit-making, such as the identification and sale of minting errors.  Creating a collectible series of legal-tender coins has produced a ten-year span that has benefitted coin dealers, collectors, and the government itself.

The new Hawaii quarter, however, has a short-term profit to those who have it:  the opportunity to fill in that last free ‘hole’ in the Statehood Quarter folder.  Having a complete collection provides the profit of satisfaction, knowing that you’re done and you have every single one.   I’m sure most people are like me, and still have a number of open holes for a few states that have still slipped through your fingers.   Eventually they’ll be filled, but coming up next year, there will be something new.   In 2007, long after most of us had started our quarter collection, the U.S. Mint decided to add another 6 coins at the end, representing Washington D.C. and 5 other U.S. Territories.   The ending of the U.S. State Quarter series should not be a sign that you’re done collecting — the U.S. Mint has demonstrated it will continue to give coin collectors new designs to work with for many years to come.

I’ve been amused by the names of American money for quite a while. Of course, we acquired the practice from the British, but it’s what I know, so I’m entitled to be entertained the fact that the dime doesn’t even say what it’s worth on the back. We did better with the penny and the nickel, though — they both list their value instead of their common name, which helps unfamiliar people make change easier. The dime and the penny have their name origins rooted in history, the ‘dime’ has the same root as ‘decimal’, or a tenth part, and the penny has been the name for a copper one-cent coin for centuries. A nickel, however, is named after its manufacturing material, so having “five cents” written underneath Monticello on the reverse is a necessary move to identify the coin’s value. This gulf between value and name makes for an interesting historical sidenote, and we can blame the Civil War for these collectible coins.

Leading up to the Civil War, people foresaw the financial ruin due to the war and began to hoard coins that contained precious metals like silver, gold, and copper. Small-denomination coins had never used much precious metals to begin with, to avoid what we’re seeing today where the metal in a coin is worth more than its face value. However, due to the reduced amount of precious metals in circulation, in 1859 a new penny was minted that was 1/8th nickel. These “Indian Head” cents weren’t the rich, dark bronzey color of a full-copper penny, having a paler, whitish-goldish hue due to the nickel content. Because they were the only coin with a significant nickel content, and to distinguish them from the other ‘penny’ coins, they got the nickname “nickel” or “nick”. The War continued to build, and eventually even nickel became valuable enough as a precious metal that the Mint turned to bronze for pennies in 1864.

The next year in 1865, however, the US Government was still struggling to straighten out its coinage problem. In addition to coins, a variety of fractional currency were used. These were essentially paper versions of the common coins of the time, ranging from dollar-bill sized paper worth a few cents, to using 3-cent postage stamps as currency. Merchants disliked the small-denomination paper because it wore out quickly and was harder to manage in volume compared to pennies and dimes. Nickel was brought to the forefront again, much due to the ‘nickel lobby’ in Congress, this time as part of a three-cent piece. A three-cent silver coin had been minted since 1851, but had encountered the hoarding along with other silver pieces. The three-cent nickel was still mostly copper, but the percentage was now 25% nickel, twice as much as the nickel cent and the same as our current five-cent nickel. These lasted for twenty-five years, until the US Coinage Act of 1890 called for revisions for several US coins. It was determined at that time that a three-cent coin was not necessary, so it was removed from the Mint’s circulation list. The coin was recalled and was melted to produce a new coin: a five-cent coin, composed of the same 75% copper - 25% nickel alloy as the three-cent coin. Five-cent nickels had been around since 1866, with the Shield Nickel minted of the same metal as the three-cent nickel, but as of 1890, the only ‘nickel’ coin was the Liberty Nickel.

Since 1890, our coin denominations and format haven’t changed significantly, despite redesigns and new president’s heads. While our Civil War-era friends might not have readily answered ‘five cents’ when asked how much a nickel was worth, the variety of coins during the mid-19th-century has created an abundance of interesting coinage to collect — even if you stick to just nickels.