Monday, June 29, 2009

Coin Monday: Not Worth a Continental? Not Anymore!

June 29, 2009
Posted by John Dale

Today, the U.S. dollar is one of the premier currencies in the world, but this was not always the case. It took until 1857 for the United States to mandate the use of its own money within its borders; prior to that date, foreign gold and silver coins were acceptable in payment based on their metal content, similar to how the precious-metal coinage of the United States was judged in international trade.

(It’s worth noting that, until 1807, no gold or silver coinage struck by the Philadelphia Mint bore a complete denomination; the fraction ½ appeared on the reverse of the Draped Bust half dollars of 1796 and 1797. That, though, begs the question: Half of what?)

Even earlier, the first money created by the united American colonies became an out-of-control disaster. The early years of the American Revolution were financed by Continental Currency, a series of fiat money issues put out by the Continental Congress. Since the rebel government did not have the power to levy duties or taxes, its options for gaining revenue were limited, and the fiat currency was perhaps the best of a series of bad options.

The inability of the Continental Congress to get revenue in the first place, however, did not change, making the promise of redemption for the Continental Currency increasingly unrealistic. Over the course of roughly four years, more notes were printed in higher denominations, hyperinflation took hold, British-made counterfeits appeared, and the worth of the Continental Currency was destroyed. In the saying “not worth a continental,” the “continental” was a piece of Continental Currency.

With time, though, the “continentals” were recalled or lost, the numbers thinning. Today examples of Continental Currency are prized by collectors, and not only paper money enthusiasts; there were also a number of large-diameter coins issued as well – these historically called “dollars” – though there remains some disagreement about what denomination the coins were meant to represent.

Heritage’s August Los Angeles U.S. Coin auction has an unusually large number of these coins, six of them from the same collection, with a mix of more common varieties in high grades and top-shelf representatives of more elusive types; previews are available under the Colonials header. Not all of the descriptions are in place, but I’ve seen rough drafts of the write-ups being done for these pieces, and the catalog is going to be spectacular.

Stay tuned…

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-John Dale Beety

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