In 1873 the nation took steps to battle an unexpected problem with the money supply in the United States. Officials initiated the Fourth Coinage Act.

Prior to the Fourth Coinage Act, citizens were permitted to bring their silver to the mint and have the metal pressed into coins for use as legal tender. This service, which carried a fee, created problems when the intrinsic value of silver fell below the face value of the coin minted. The difference in these two values presented opportunities for fast, easy wealth to silver holders. This practice created inflation problems, which led officials to revise the laws pertaining to the US Mint.

Changing these laws had an enormous impact on the US economy because it ended the monetary standard known as bimetallism. Under bimetallism the value of currency is defined in terms of its equivalent value in one of two metals. Commonly, these two metals are gold and silver. Some were happy to see bimetallism disappear, citing problems with the system, like Gresham’s Law. This principle, in its simplest form, states that “bad money drives out good.” That is, in time, the more valuable of the two metals will eventually disappear from circulation because people will horde the more valuable commodity.

However, in the same year of Fourth Coinage Act the United States and Europe suffered from a period of economic depression known as the Panic of 1873. There were numerous causes. Inflation, speculative investments, and massive property losses from the Chicago and Boston fires all contributed. Soon, the nation took steps to resume the free coinage of silver with the Bland-Allison Act. As a result, the Treasury would purchase two to four million dollars worth of silver on a monthly basis for the purpose of minting what became the Morgan Dollar. The decision was the result of a contentious period in US history, but the controversy was just beginning.

The original design featured an eagle on one side with eight tail feathers. This detail was a departure from all previous U.S. coins in which the eagle had an uneven number of tail feathers. Eventually, officials decided to change the design back the customary seven feathers. The Philadelphia Mint was the only facility issuing the Morgan Dollar at the time, therefore, they re-cast the dies. As a result, a few rare Morgan Dollars have seven tail feathers superimposed over the original eight.

Once the design was corrected, the Mint began issuing the Morgan Dollar in vast quantities. Much of the pressure to mint so many came from silver miners who wanted a stable and predictable demand for their metal. With so many on hand, millions of coins were stored in U.S. vaults. Eventually, the government found a use for the coins when World War I demanded more resources for the war effort. The Mint melted every Morgan Dollar they had – or so they thought.

In the early 1960s officials conducted an audit of the Treasury’s holdings. To everyone’s surprise, there was a forgotten stockpile of Morgan Dollars sealed, and abandoned in the main building of the Treasury in Washington, D.C. The government decided to sell them to the public.

The demand was insatiable. More than 400,00 orders came through with approximately half turned away due to limited availability.

Today, the coin remains popular with collectors because it represents such a diversity of story lines, from bimetallism, to tail feathers, to a forgotten cache.

The United States of America was still in its infancy in the early 1790’s.  The Founding Fathers signed the Constitution just a few years before in 1787 and many landmark events that shaped the country we are today occurred in the years that followed.

Up until this time, American colonists were forced to use European coins for everyday purchases. The Spanish dollar was a popular method of transactions at that time.

The nation faced a shortage of small change and it was clear that America needed its own system of currency. America needed its own coinage, especially small change, and they needed it fast.

The first Secretary of the Treasury – Alexander Hamilton – began outlining a system for America’s coins in 1790.

First coin struck by U.S. government

Out of that plan, the Half Disme, or half a dime, was the first coin ever struck by the authority of Congress under the April 1792 Mint Act.

The story of how the Half Disme got its name traces back to both Hamilton and Thomas Jefferson. They advocated the use of the decimal system as the standard in U.S. money.

Jefferson explained: “The most easy ratio of multiplication and division is that of ten.”

Just over 100 years earlier, a French mathematician invented the decimal system in a book called “La Disme” or “The Tenth.” The 10-cent piece represented 1/10 of a dollar and was thus named the disme. Most Americans pronounced the French word “dime” and the “s” was later dropped.

Silver coins signaled strength to the world

In the 18^th century, the minting of silver coins was considered an indicator of a country’s economic strength. Some historians believe this was behind President Washington’s push to create the Half Dismes as quickly as possible.

As the Half Disme was the smallest silver coin, it enabled the largest minting from the limited supply of available silver. In fact, President Washington brought $100 worth of his own bullion and coin to the Mint to use in the first strike.

The old name, for the Half Dismes, sometimes seen in 19th century writings, calls the first coin the “Washington Half Dismes.”

The Philadelphia Mint hadn’t even opened its doors yet

In the summer of 1792, the Philadelphia Mint, located on Seventh Street in downtown Philadelphia near the Arch was still under construction.

Impatient to get U.S. silver coins minted, the Half Dismes were struck in the cellar of a building owned by John Harper at 6th and Cherry Streets in Philadelphia.

A total of 1,500 silver Half Dismes were struck in July 1792.

Thomas Jefferson, then Secretary of State noted the event on July 13, 1792, in his household account book: “rec’d from the mint 1,500 half dimes of the new coinage.”

The Half Disme was considered a pattern coin, intended as a test to show the size, form and design of the future coins. Yet, many 1792 Half Dismes circulated. 

Construction on the Philadelphia mint building was finalized soon after in September.

The coin description

Many in the House of Representatives advocated for a representation of the President’s head on the obverse of the coins. Washington nixed that idea fast.

Engraver Robert Birch designed the early 1792 Half Dismes. The obverse features the head of Liberty facing left, with the date 1792 below. The reverse portrays an eagle flying left with the words HALF DISME below.

History in your hands

While today’s dime may not resemble the Half Disme, it is a direct descendent of this landmark coin that was minted in 1792. It’s a small coin with huge historical significance.

In 2018, the finest known 1792 Half Disme, graded MS68 sold for $1,985,000. That coin was owned by the first United States Mint Director David Rittenhouse. Lesser condition Half Dismes can sell for much less.