1.1 The Origin of the Denomination, continued
Second Attempt
When the Mint began striking the first subsidiary silver coins, the double disme was not among them. The quarter dollar had fallen back into favor and became the coin of choice
between the disme and half dollar. The use of the quarter dollar over the double disme did not, apparently, ease all problems associated with the two denominations. At least
two additional times before the official adoption of the denomination, the idea of issuing a twenty-cent piece was proposed.
Despite the decision of Congress to support issuing the quarter dollar over the double disme, by the end of 1805, the quarter dollar had only been struck bearing three different
dates, 1796, 1804, and 1805. Of the pieces extant at the start of 1806, a little more than 90 percent carry the 1805 date. So it appears that the quarter dollar may not have
been well received or was not quick to replace the Spanish, English, and French silver pieces also circulating concurrently.
The twenty-cent piece was also considered as a possible denomination in March 1806. Senator Uriah Tracy introduced a bill which asked that two new denominations, a silver
double dime and a billon (low-grade silver-copper alloy) two-cent piece, be coined. The double dime was to carry the denomination, as the inscription “XX Cents” on the
obverse in place of an allegorical head of Liberty. Robert Patterson, the current Director of the Mint, did not support the bill because in his opinion, the two-cent piece
was unacceptable. The fate of the proposed double dime was tied to the arguments over the controversial two-cent piece. Despite the Director’s opposition, the bill passed
the Senate the following month. Eight months later the bill was reintroduced and Patterson was again actively opposed. Patterson claimed that the two-cent coin would be
difficult and expensive to produce and would have a high liability for counterfeiting. Interestingly, Patterson also argued that the coin would be useless to silversmiths
since the constituent metals would be difficult to extract. The following February, the bill again passed the Senate, but did not fare well in the House. Hopes of a silver
twenty-cent piece also disappeared as they were tied to the unwanted billon two-cent coin.
Third Attempt
The third time that the possibility of the twenty-cent piece was offered as a workable denomination was in 1850. The Senate was discussing a bill introduced by Senator D. S. Dickinson
to begin coining a billon one-cent piece and to introduce a three-cent silver coin. Concurrent to these discussions, members of the House were discussing a bill to set the value of
smaller circulating Spanish silver coins to be not greater than 5, 10, and 20 cents as opposed to the common value of 6 1/4, 12 1/2, and 25 cents, for the medio, reale, and
double reale, respectively. To facilitate this artificial valuation, the bill proposed that the United States produce a twenty-cent piece. While the substance of the Senate
bill became law in 1851, the House bill was flawed and did not progress. The House bill did not compensate for the instant loss in value of the outstanding, and now debased,
Spanish silver coins. The greatest of which was a 20 percent loss to holders of two reales. The supporters of the bill also did not appreciate fully that as new United States
coins were released for circulation, there was a great liability that these coins would disappear from commerce. Interestingly, this hoarding of subsidiary silver coins became
a reality in the following years through the Civil War.
The Denomination is Finally Adopted
The fourth and successful opportunity for the twenty-cent piece to become a reality was in the wake of the Mint Act of February 12, 1873. The passage of the Act dramatically changed the
landscape of coinage in the United States. One of the outcomes of the Act was the elimination of the silver half dime and silver dollar. Such a change was seen as detrimental to those
with significant silver interests, such as those who were enjoying the tremendous outpouring of silver from Nevada mines. Although the Act allowed for the striking of Trade dollars,
these coins were not intended for domestic use and instead were for international trade with China and potentially in other foreign markets.
Attention needed to be paid to the supply of silver, otherwise a potentially disastrous fall in the price of silver may result. This abundance of domestic silver was complicated by
international financial markets. Germany had recently moved to a gold standard and demonetized silver, and other members of the Latin Union were moving in that direction. The result
was an enormous influx of silver into world markets. A simple way to protect the interests of silver mine owners was to increase demand for the white metal. The largest purchaser of
silver in the world at the time, in fact, was the United States Mint.
The U.S. Mint would increase production of subsidiary silver coinage in the years following the Mint Act of 1873, but parallel measures were taken by a junior senator from Nevada to
ensure that a new outlet for the sale of domestic silver would be available. The buyer would be the same, but the silver would be for the production of an entirely new denomination.
Senator John Percival Jones of Nevada was the driving force behind the twenty-cent piece finally becoming a reality. Senator Jones worked closely with Henry R. Linderman, the
Director of the Mint, to get the new denomination authorized by Congress as quickly as possible in order to alleviate a disturbing situation burdening those in the West.
Silver and gold coins were the preferred medium of exchange in the West. Silver coinage from the U.S. Mint had always been somewhat scarce and thus the population would use
foreign silver coins alongside domestic silver coins to make payment. Since the coinage’s value was based on the silver content, the system worked reasonably well. Of the
foreign coins, the Spanish 8 reale was a dominant large silver coin. In order to make payments in smaller amounts, the 8 reale was occasionally cut into 2, 4, and 8 pieces.
A bit was one-eighth of the 8 reale and was traded at a nominal value of 12.5 cents.
As the story is told, due to the lack of small denomination coins, patrons were commonly cheated by merchants in the West. As an example, customers wishing to buy an item for
ten cents and were only able to pay with a quarter dollar would be forced to accept change in the amount of ten cents since no half-dimes or nickels were available. Thus the
customer would be cheated out of five cents during the transaction. This notion was popularized by Senator Jones and became the siren song of the denomination. Senator Jones
opined that if the U.S. Mint would produce a twenty-cent coin of silver, then customers would no longer be cheated by the greedy merchants. Since a patron could tender a
twenty-cent piece instead of a quarter dollar, the dime in change would be the correct amount and the patron would end the trade without being cheated.
The story was further popularized in the contemporary non-fiction book, History of The Big Bonanza8 written by Dan De Quille and published in 1876. The author,
whose real name was William Wright, was a journalist, author, and humorist living in Virginia City, Nevada. The passage from the book reads:
The money in circulation is wholly gold and silver coin, and the smallest coin in use is the bit, ten-cent piece – sometimes spoken of as a “short bit,” as not being twelve and one-half cents, the “long bit.” There being no smaller change in use than the dime, the bit passes for the half of twenty-five cents. Thus, whenever a customer throws down a quarter of a dollar in payment for a drink or a cigar, he gets back a dime, and so has paid fifteen cents for his “nip” or smoke. The new twenty-cent pieces, of which Senator Jones, of Nevada, is the father, will, however, cure this little ill. In the “two-bit,” or twenty-five cent saloons, everything is twenty-five cents, even the same drinks that are sold in the git houses for ten cents; as lager beer, soda water, lemonade, cider, and the like.
Thus the account described in the book would seem to support the claims by Senator Jones that customers are being short-changed by merchants, at least in Virginia City. What
is interesting is that in 1874, four silver mine owners approached Dan De Quille (William Wright) to write a book on the history of the Comstock Lode. One of those mine owners
was none other than Senator Jones. De Quille was writing the book at the same time Senator Jones was campaigning for the silver twenty-cent piece and the tale of merchants
cheating customers figured prominently.
This story even found...
9The book’s complete title is: History of The Big Bonanza: An Authentic Account of the Discovery, History, and Working of the World-Renowned Comstock Lode of Nevada Including the Present Condition of the Various Mines Situated Thereon; Sketches of the Most Prominent Men Interested in Them; Incidents and Adventures Connected with Mining, the Indians, and the Country; Amusing Stories, Experiences, Anecdotes, etc, etc, and a Full Exposition of the Production of Pure Silver.
