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                                                      Transcript No. 1657
                                                      February 9, 1999

             CONGRESS AUTHORIZES FOREIGN COINS AS LEGAL TENDER
                              By Richard Doty

    If you look at the coins in your pocket you'll probably find only
pennies, nickels, dimes and quarters.  And they're probably all from one
country . . . the United States.  But two centuries ago, you might have
found any of a dozen or more denominations--and from countries all over the
world.

    On this date, in 1793, Congress passed a law making foreign coins legal
tender in the United States.

    Why would the Government want to do that?  Simple.  It had no choice!
The infant United States was truly a land of promise, a country for the
future.  But at the time it had its problems, and one of those problems was
producing coins.  There were no American sources of precious metals from
which to make coins . . . at least, none anyone was aware of.  And even if
the precious metals existed, there was no functioning mint to turn them
into coins.  Congress had established the Mint, but it was just getting
under way at the beginning of 1793, and any large production of coins lay
years, or even decades away.

    Meanwhile, the American population and economy were growing.  Some
solution had to be found, and found quickly.  Actually, two solutions were
found.  Private banks and other businesses could issue paper money, and as
long as everyone didn't demand redemption at once, the currency could help
keep the economy alive and well.  And for those who refused paper money,
there were coins, mostly from other countries.

    And so the ecus of France, the reales of Spain, the guineas of England
and the rupees of India were proclaimed legal tender.  Many of them would
continue to be until 1857.  By that time the country had a modern mint and
gold and silver of its own, serving notice that America had finally become
mistress of her own monetary destiny.

    Today's program was written by Richard Doty and underwritten by Whitman
Coin Products, a division of Golden Books, providing quality coin products
for more than 50 years.  "Money Talks" is a copyrighted production of the
American Numismatic Association, 818 N. Cascade Ave., Colorado Springs, CO
80903, 719/632-2646, ana@money.org, http://www.money.org.