Coinage Act of 1792

The Coinage Act or the Mint Act, passed by the United States Congress on April 2, 1792, established the United States Mint and regulated the coinage of the United States. The long title of the legislation is An act establishing a mint, and regulating the Coins of the United States. This act established the dollar as the unit of money in the United States, declared it to be lawful tender, and created a decimal system for U.S. currency.

By the Act, the Mint was to be situated at the seat of government of the United States. The five original officers of the U.S. Mint were a Director, an Assayer, a Chief Coiner, an Engraver, and a Treasurer (not the same as the Secretary of the Treasury). The Act allowed that one person could perform the functions of Chief Coiner and Engraver. The Assayer, Chief Coiner and Treasurer were required to post a $10,000 bond with the Secretary of the Treasury.

History
Although some of the provisions in the 1792 Coinage Act were adjusted as time went by, the majority of the rules specified in this Act remained in effect for many decades. Essentially, it provided the basic framework on which all subsequent coinage production was based. While the first draft of the Act stipulated that all coins would employ a portrait of the president on the obverse, the final version called for an image emblematic of liberty. The Act also authorized construction of a mint building in Philadelphia, the nation's capital. This was the first federal building erected under the United States Constitution. Mint director David Rittenhouse laid the building's cornerstone on July 31.

On May 8, 1792 An Act to Provide For a Copper Coinage was signed into law by President George Washington. This legislation resulted in the birth of the copper penny, from which descends today's one cent piece. The Act also stipulated that "the director of the mint... be authorized to contract for and purchase a quantity of copper, not exceeding one hundred and fifty tons... to be coined at the mint into cents and half-cents... and be paid into the treasury of the United States, thence to issue into circulation." Furthermore, "no copper coins or pieces whatsoever except the said cents and half-cents, shall pass current as money, or shall be paid, or offered to be paid or received in payment for any debt, demand, claims, matter or thing whatsoever."

Authorization
The Act authorized production of the following coins:

The coins were to contain the following markings:
 * One side was to have an impression emblematic of liberty, with the inscription "Liberty," and the year of the coinage.
 * The reverse side of each of the gold and silver coins was to have the figure or representation of an eagle with the inscription "U NITED S TATES OF A MERICA ."
 * The reverse of the copper coins was to have an inscription expressing the denomination.

The Act defined the proportional value of gold and silver as 15 units of pure silver to 1 unit of pure gold. Standard gold was defined as 11 parts pure gold to one part alloy composed of silver and copper. Standard silver was defined as 1485 parts pure silver to 179 parts copper alloy.

Any person could bring gold or silver bullion and have it coined free of charge or for a nominal fee exchange it immediately for equivalent value of coin.

Quality control measures were implemented in that from each separate mass of gold or silver used to produce coins, three coins were set aside by the treasurer. Each year on the last Monday in July, under the inspection of the Chief Justice, the Secretary and Comptroller of the Treasury, the Secretary of State, and the Attorney General, the coins were to be assayed and if the coins did not meet established standards, the officers were disqualified from office. Further, the penalty for fraud or embezzlement by officers or employees of the mint was death.

The Act also specified the dollar as the "money of account" of the United States, and directed that all accounts of the federal government be kept in dollars, "dismes," cents, and "milles," a mille being one-tenth of a cent or one-thousandth of a dollar.

The silver content of a dollar under this act was almost exactly equal to 1/5 of the silver content of the contemporary British pound sterling, or 4 British shillings.