The Mint charge here comprised is about 2 per cent. on both silver and gold, "bringing the ratio of bullion at the Mint to 15.22, a little below the ratio in the coin."
UNITED STATES: HAMILTON'S REPORT, 1791
For several years all these regulations of Congress were not put in force, and it was not until 5th May 1791 that the matter was again brought before the Senate by the report of the Secretary of the Treasury, Alexander Hamilton.
Hamilton's scheme, as contained in his most remarkable paper, was for a silver unit or dollar of 371 1⁄4 grs. of pure silver and a ratio of 15, and instead of the allowance of 2 per cent. for waste and coinage the principle was adopted of free coinage—of delivering at the Mint the same weight of pure metal coined as should be brought to it in bullion or foreign coin. Hamilton justifies his ratio thus: "The difference established by custom in the United States between coined gold and coined silver has been stated to be nearly 1:15.6. This, if truly the case, would imply that gold was extremely overvalued in the United States, for the highest actual proportion in any part of Europe very little, if at all, exceeds 1:15, and the average proportion throughout Europe is probably not more than 1:14.8." He also deduces his ratio of 15 as a mean between the two lately preceding issues of dollars. "Taking the rate of the late dollar of 374 grs., the proportion would be as 1:15.11. Taking the rate of the newest dollar of 374 grs., the proportion would be as 1:14.87. The mean of the two would give the proportion of 1:15 very nearly, less than the legal proportion in the coins of Great Britain, which is as 1:15.2, but somewhat more than the actual or market proportion, which is
not quite 1:15." As to the express selection of one or other metal for the unit, Hamilton makes a departure which marks clearly that he was creating and not continuing a system, and that if bimetallism is a feature of modern conception that conception is due to American rather than French statesmanship:[18]—"Contrary to the ideas which have heretofore prevailed in the suggestions concerning a coinage for the United States, though not without much hesitation arising from a deference for those ideas, the secretary is, upon the whole, strongly inclined to the opinion that a preference ought to be given to neither of the metals for the monetary unit ... because this cannot be done effectually without destroying the office and character of one of them as money and reducing it to the situation of mere merchandise, which, accordingly, at different times, has been proposed from different and very reputable quarters, but which would probably be a greater evil than occasional variations in the unit, from the fluctuations in the relative value of the metals, especially if care be taken to regulate the proportion between them, with an eye to their average commercial value. To annul the use of either of the metals as money is to abridge the quantity of circulating medium."
UNITED STATES: SCHEME OF 1792
This scheme was accepted in its entirety by the Act of 2nd April 1792, with the slight change that the standard of silver was changed from 11⁄12 to 1 485⁄1664 fine. The silver dollar, therefore, weighed 416 grs. gross (371 1⁄4 grs. pure silver); on this basis, at a ratio of 15, the equivalent gold piece would contain 24.75 grs. (371 1⁄4/25 = 27 3⁄4). This was accordingly established as the basis of the gold eagle or ten-dollar piece, which was to contain 270 grs. gross (247.5 grs. pure gold).[19] The Act was followed by another on the 9th February 1793, for regulating the rate of foreign coins. The gold coins of Great Britain and Portugal of their then standard were made a legal tender for the payment of all debts and demands, at the rate of 100 cents for every 27 grs. of their actual weight, those of France and Spain at the rate of 100 cents for every 27 2⁄5 grains.
For a period the system established in 1792 went on, although the ratio established was prejudicial to gold. But, twenty years after, the natural result arrived in America, as in England, and the circulation of gold was completely extinguished in the States by the unseen withdrawal of the metal.