THE TEMPLETON REID MINT

This article from the Foundation for Economic Education discusses the Templeton Reid Mint. I located the mentioned historical marker in The Historical Marker Database and added an image. -Editor

My primary reason for writing this article is to share with readers a small but fascinating bit of monetary history. It is a story commemorated by a historical marker in Gainesville, Georgia that reads as follows:

First Private Mint: Templeton Reid Mint
1830-1831
Two hundred yards west, on the north side of Washington St., is the site of the first private mint in the United States to manufacture gold coins in dollar values. During the Georgia gold rush, trade suffered due to a shortage of sound money. There were few coins in circulation and most business was by barter.

Templeton Reid (ca. 1787-1851), Milledgeville silversmith and expert machinist, saw an answer to the problem. He decided to buy raw gold, refine it, and stamp coins of proven value, acceptable in any transaction. In 1830 he came to Gainesville, Georgia and opened an assay office. With machines and dies of his design and make he began to strike coins of $2.50, $5.00, and $10.00 denominations. Although questioned by many, this was legal under the U.S. Constitution. The business was not profitable and closed in 1831. The Reid gold coins minted in Gainesville are extremely rare and are eagerly sought by collectors.

There’s a lot more to the story than you can fit on a sign, and it speaks favorably about markets, entrepreneurship, and competitive choices in money.

The 1829 gold rush in the north Georgia mountains was the biggest in America before the fabled discovery of the yellow metal in California 20 years later. At the time, though the official policy of the US government was bimetallism (both gold and silver coin in circulation), the practical effect of Washington’s price-fixing was to put the country on a de facto silver standard. Gold was obviously in demand, but the government minted very little. The Southern Gold Society states, “Some estimates indicate that there was less than one federally minted coin per person in the United States.”

So, as the sign says, Templeton Reid was the first to fill the void by opening his own mint. Where there’s a demand, some enterprising man or woman will rush to provide a supply if given the freedom to do so. In The Georgia Gold Rush: Twenty-Niners, Cherokees and Gold Fever, author David Williams says, “This was exactly what the miners needed—a place to exchange their gold for coin at a not too distant location.”

Previously, miners had to take their gold to the government’s mint in Philadelphia. Not until 1835 did the Congress see the value of opening mints in the gold regions of North Carolina (in Charlotte) and Georgia (in Dahlonega).

Now what about the Reid mint’s short life? The sign says it opened in 1830 and closed in 1831. There’s a story and a lesson to that as well.

Templeton Reid had good intentions but lacked the sophistication to get the proper fineness of gold into each coin he minted. What he stamped as a $10 gold piece, for instance, turned out to be fractionally less pure gold than the coin’s denomination indicated—as the dollar was then defined and as gold was then worth in the marketplace. You might assume Reid was dishonest, but the consensus of historians seems to be that it was imprecision, not fraud, that caused the problem. Williams writes,

As it turned out, Reid’s coins were indeed worth less than face value. It seems Reid failed to take into account the impurities such as silver and tin alloyed with gold in its natural state. An 1835 article in The American Journal of Science and Arts reported than an analysis of a Reid ten-dollar gold piece revealed a purity of 95.579 percent, the remainder being silver. But Reid had assumed the purity of raw gold to be at least 99 percent and stamped his coins accordingly. Though apparently Reid was, in the words of one writer, “more ignorant than greedy,” it was a mistake that proved fatal to his business.