During the colonial period there was an inadequate coin supply throughout the American colonies. Colonists had to adapt to foreign silver coins as the British government outlawed the export of silver coinage from the homeland and discouraged colonial minting.
The creation and retention of an adequate supply of small change copper coins was also a continual problem in colonial America. This situation differed from the problem with silver coinage. There were no restrictions on importing British coppers, so while the colonists had to look toward foreign coinage for their silver they could expect British denominated small change coppers. The earliest supplies were brought over by the colonists themselves. In 1681 Mark Newby brought a large supply of Irish St. Patrick coppers to New Jersey. In the following year, 1682, a group of Quakers brought some 300 pounds of British halfpence and farthings to Philadelphia.
Even though small change continued to be scarce, the colonists resisted lightweight base metal coinages imposed on them by Britain. In 1688, with government approval, Richard Holt coined tin "American Plantations Tokens" that were never accepted by the colonists. Later, in 1722-24 William Wood made another attempt at minting coins for the colonies obtaining royal authorization to produce "Rosa Americana " coppers (actually the coins were made of a compound called Bath metal composed of Brass, zinc and a little silver). These coins were two and a half times lighter than royal British halfpence and were rejected by the colonists. In Massachusetts the colony printed small change currency notes on parchment so citizens would have an alternative to the hated Rosa Americanas.
To increase the local supply of small change Samuel Higley minted his own coppers in Simsbury, Connecticut in 1737. Beyond the small quantity of Higley coppers, the colonies primarily relied on counterfeit and royal British coppers imported from Britain and Ireland. In 1734-35 a unknown number of tons of such coppers were sent to Georgia. In 1749 Massachusetts received 800,000 royal halfpence and 420,000 royal farthings as part of a reimbursement for expenses incumbered during a military expedition against Fort Louisbourg on Cape Breton. Although some counterfeit coppers had entered the colonies earlier, in 1753 in Boston and New York notices started appearing about the seizure of large quantities of lightweight counterfeit halpence being smuggled into the country. The only other colonial produced copper was a small number of undenominated tokens thought to be designed by James Smither of Philadelphia in 1766 honoring William Pitt as a leader in repealing the Stamp Tax. Finally, in 1773 about five tons (about 670,000 coins) of specially designed halfpence were minted in London for the colony of Virginia.
During the Revolutionary war the occasional supplies of British coppers which had sustained the colonies was completely cut off. If this were not bad enough the small change situation became even more critical as most of the available coppers were melted down. For example, a large quantity of the Virginia halfpence were never put in circulation but like much of the available metal (including circulating coins) were melted down to produce items needed for the was effort. Throughout the war years all coins were scarce. Individuals were forced to rely on various local small change paper currency notes printed by some of the states as well as by individual businessmen.
Following the war British manufacturers saw America as a profitable market. Private mints, especially those in Birmingham, produced a flood of lightweight coppers for use in America (such as the Constellatio Novas, the Bar copper, possibly the Auctori Plebis and numerous counterfeit British halfpence). Additionally, lightweight imitation British coppers were produced in America at Machin's Mills and probably elsewhere.
To remedy this problem government sponsored mints were established. The Republic of Vermont opened a mint for coining coppers in 1785 and was soon followed by the state of Connecticut. In 1786 New Jersey began minting followed by Massachusetts in 1787. By 1787 the Continental Congress also became a participant awarding a federal government contract produce the "Fugio cent." The hope was to produce government regulated coppers of a standard legal weight.
The minting of coins was treated as any other government request, private individuals supplied bids then the government awarded the contract to the preferred bidder. Initially it was thought mints would produce a healthy profit, so their was keen competition for the contracts. With the exception of Massachusetts all the other minting projects were contracted out to private individuals. Soon the contractors realized the minting process was far more costly than anticipated so the quality of the product declined over time. In order to make a profit the coins had to be made lighter than the legal weight, and the lighter the coin the greater the profit.
British regal copper halfpence weighed about 153.3 grains. Vermont products came in quite low at about 111 grains. Connecticut coppers were much closer at about 144 grains and New Jersey coppers were even better at about 150 grains. Only the Massachusetts and federal Fugio coppers adhered to the British standard, with weights of about 157.5 grains. Connecticut ran into other problems as several lightweight counterfeit Connecticut coppers were put into circulation.
During this period individuals were keenly aware of the circulation of lightweight and counterfeit coppers. With the hope of new, full weight state and federal coppers on the horizon some individuals stopped accepting the inferior lightweight products or took them only at a discount. Every time a merchant or worker accepted a lightweight copper at face value they lost money because when they tried to spend them others would only accept them at a discount.
On March 5, 1787 the New York Assembly issued a report discussing the principle coppers then in circulation. The report stated copper coinage in New York consisted of:
[From Crosby pp. 290-292, the quoted section is from p. 291.]
First. A few genuine British half-pence of George the Second, and some of an earlier date, the impressions of which are generally defaced.
Secondly. A number of Irish half-pence, with a bust on one side, and a harp on the other.
Thirdly. A very great number of pieces in imitation of British half-pence, but much lighter, of inferior copper and badly executed. -- These are generally called by the name of Birmingham Coppers, as it is pretty well known that they are made there, and imported in casks, under the name of Hard Ware, or wrought copper.
Fourthly. There has lately been introduced into circulation, a very considerable number of coppers of the kind that are made in the State of New-Jersey. Many of these are below the proper weight of the Jersey coppers, and see as if designed as a catch penny for this market.
Responding to this report on April 20, 1787 the New York legislature passed an act regulating the circulation of copper coins in the state. The act stated:
...after the first day of August next [i.e. August 1, 1787], no coppers shall pass current in this State, except such as are of the Standard and weight of one third part of an Ounce avoirdupois, of pure copper, [that is 145.8 grains which is about the weight of a regal British halfpence (varying from 140 to 165 grains) but is far higher than the then circulating coppers of 90-130 grains], which coppers shall pass current at the rate of twenty to a Shilling of the lawful current Money of this State and not otherwise.[From Crosby pp. 294-296, quote on p 294. Bracketed notes have been added to the text.]
...After the said first day of August next,... Any copper coin, other than of the Standard and weight aforesaid, such copper coin shall be liable to be seized...
Thus in New York lightweight coppers, including Vermont and Connecticut coppers, would be seized effective August 1, 1787. Further, the law stipulated anyone knowingly passing light weight or sub-standard base metal coppers "...shall forfeit five time the Value of the Sum for which such coppers shall be so offered or passed in payment,..." Similarly, New Jersey passed a law that after July 20, 1787 only New Jersey coppers and the federal Fugio cents would be legal in the state and would pass at 15 coppers per New Jersey shilling of account.
With the passage of such laws the value of the lightweight coppers began to drop. In the following year, 1788, the Connecticut, Vermont and Massachusetts mints closed. Massachusetts had continually produce full weight coins but an audit discovered it cost more than twice the face value to produce each copper cent or half cent! In New Jersey the original Cox and Goadsby Rahway mint had several problems (there were several legal suits - Mould had taken a portion of the mint to Morristown and Ogden took most of the remaining material to Elizabethtown). By the end of 1788 the only coppers being produced were lightweight counterfeits at the private mint of Thomas Machin in Newburgh, New York and in New Jersey at Elizabethtown where Matthais Ogden took any lightweight coin he could purchase at a discount and overstamped it as a New Jersey copper, which he could then pass at 15 to the shilling. The situation with the federal "Fugio " contract was also problematic. The Connecticut minter James Jarvis had been awarded the contract. He produced about 400,000 fugio cents but illegally diverted much of the copper to producing some 3,500,000 unauthorized lightweight Connecticut coppers. This first shipment of Fugios was sent to the treasury in May of 1788. Jarvis went to England looking for additonal copper but soon his partner (his father-in -law) determined the situation in Connecticut was untenable so he fled to England; neither partner ever returned. The government was left without its copper and only a small supply of coins.
Coppers were problematic in several areas but the situation was especially bad in New York where the only mint was Machin's counterfeiting operation. Flooded with underweight coppers that were now officially illegal, the public lost all confidence in coppers. In New York City during summer of 1789 the bottom fell out. The value of coppers continued to decline so on July 12, 1789 the New York Common Council recommended valuing coppers at 48 to the shilling. Merchants refused to cooperate and soon they were simply refusing to accept coppers at any price. Coins that a few years earlier had circulated at a rate of 14 to the shilling were now worthless. An add from the New York Daily Advertiser of July 24, 1789 stated:
C O P P E R S,Taking the rum speculator's 60 coppers to the shilling one better, on August 3, 1789 inThe Federal Gazette from Philadelphia it was proposed the rate be established at 96 coppers to the shilling! In a newspaper report from the New York Packet of August 18, 1789 it related:
TAKEN for YORK RUM, on delivery, at No. 21,
Ferry-street, at SIXTY to the SHILLING, or
10d per pound.
...Many of the retail shops are shut: The cries are suspended in the streets, and it is with difficulty the poor can purchase bread of the bakers, or vegetables in the market:...The situation was so bad that even full weight coppers were suspect. The federal government abandon their coin project and decided to privately sell their supply full weight Fugios to a speculator at a discount. A man named Royal Flint from New York City purchased the coppers and unfortunately received them in June of 1789. The panic had already started and even at the New York Common Council suggested rate of 48 coppers per shilling Flint would only get 29 cents for every 100 fugio cents! Needless to say he soon ended up in debtor's prison.
The panic primarily affected New York and Pennsylvania with reverberations in the bordering states of New Jersey and Connecticut. On August 6, 1789 the Bank of America in Philadelphia printed 1d and 3d small change notes to help alleviate the small change problem. This solution was greeted with enthusiasm and lead to a boom in small change note production. By September New York City formulated a plan, they were accepting only New Jersey coppers and no others. This had stabilized the situation somewhat so that rather than the 48 to 60 coppers to a shilling of July, by September merchants were accepting 24 New Jersey coppers to the shilling. However, the situation had not abated everywhere, on Long Island Sound coppers were going for 72 to the shilling. By September Connecticut was still trading coppers at 48 to the shilling while Boston had not been affected by the panic and continued to use their usual rate of 18 coppers per shilling. Conditions slowly began to stabilize in affected areas as additional small change issues became available.
In response to the "Copper Panic" cities, private businesses, banks and churches printed their own small change notes during the period 1789 through 1799. Most issues were from New York with others from New Jersey and a few from Pennsylvania and Connecticut. In more rural areas regional associations printed money as the Lansingburgh Museum, which printed notes used by a group of 27 merchants throughout Rensselear county in New York. Of course churches were greatly affected, as several individuals passed their otherwise unusable coppers in the weekly collection. In response to this practice several ministers printed small change notes. Parishioners were asked to purchase a quantity of the notes from the church and then over the weeks contribute them to the Sunday collection plate rather than giving unacceptable coppers.
Most of these small change issues were printed between 1790 and 1793. Based on the emissions listed in Newman the totals are as follows: In New York there were at least 56 issues with dates ranging from the private issue at Waterford signed by Richard Davis, Jr. and Jacoburt Schoonhoven of September 10, 1789 to the Cayuga Bridge Company issue of September 12, 1799, but with ten undated issues. In New Jersey there were a total of 16 small change issues dated from Azariah Hunt's early issue of August 1786 to the City of New Brunswick issue of March 1796. Pennsylvania had 4 issues starting with the large emission of the Bank of America on August 6, 1789 to a small private issue of Fred Hubley of December 13, 1789. Connecticut produced 4 small change issues from the emission of the Union Bank of New London on August 6, 1792 to the Norwich Bank issue of May 10, 1799 and the Hartford and New Haven Turnpike small note issue of 1799. In Rhode Island there was a single small change issue by the Washington Bank in 1800 and in South Carolina the City of Charleston emitted small change issues on July 6, 1789 and October 9, 1793.
Some small change emissions had been issued during the revolutionary war both by states and by private individuals because of a lack of coinage. These issues were not in response to the post war copper panic and were not counted in the above totals. It is also possible eight of the New Jersey issues mentioned above, dating 1786-1787, were simply part of this earlier tradition, rather than in response to the problems with coppers. Indeed, Azariah Hunt had previously been a partner of Moore Furman who had issued small change notes on November 1, 1776. Excluding these issues would reduce the New Jersey copper panic emissions to eight issues starting with the Borough of Elizabeth issue of March 25, 1790.