As both the Federal and Territorial Governments refused to provide a means for an adequate currency, the private Oregon Exchange Company took independent action. They would coin with opr without government permission. William Rector was selected to supervise the making of the dies, stamps, and press. Thomas Powell, a Salem blacksmith, was the machinist, doing the forging at $10 per pound or iron used. The iron for the construction of the mill was obtained from old wagon wheels and other scrap metal. Rector did the lathe work on a machine brought all the way from Missouri by Victor M. Wallace. Powell assisted Rector with the lathing, receiving an additional $40.
The two-story frame mint building oin Oregon City was the one originally rented as the legislature's proposed site. The building was located at 5th and Water Streets, in the present day business district.
The first coins were probably issued in late March, soon after the Oregon Exchange Company was formed, but there is no conclusive evidence of an actual date. Historian James Henry Brown credited Hamilton Campbell with engraving the $5 dies, but actually the designs were drawn by J.G. Campbell at the first meeting of the company, with Hamilton Campbell, assisted by Rector, engraving them. The dies contained two errors. Instead of "O.T." for Oregon Territory, "T.O." was mistakenly engraved, and where each partner's last initial appeared on the coins, Campbell's incorrectly appears as a "G." The company to avoid delay did not refashion the flawed dies.
While the $5 coins were being struck, Victor M. Wallace was engraving the dies for a $10 coin. The T.O. was properly changed to O.T., and C was substituted for the G in Campbell. The initials A (Abernethy) and W (Wilson) were omitted since they did not contribute toward purchasing the new equipment.
The gold for the coins was not artificially alloyed with silver or copper, so there could be no question regarding their value upon redemption. No assay was made of the metal and since it was taken from different California districts, the Oregon coins varied in purity and color. The soft native gold pieces also suffered from abrasion when in contact with harder, alloyed coins. The $5 coins weighed approximately 130 grains; the $10 twice that (10 and 20 grains heavier proportionately than the proposed coinage of the Provisional Mint). The native gold quality of the coins made them 8 to 10 percent more valuable than the artificially alloyed Federal Government coinage. This was done to insure that the coins would be accepted despite the variance in purity although it did little to insure adequate intrinsic value. As a result, they were melted down for their intrinsic value (probably in California) and soon disappeared from circulation. When taken to the mint in San Francisco in 1854, the $5 and $10 coins commanded a 10 percent premium.
The new coinage was soon dubbed "Beaver Money," after the beaver -- later to become the official emblem of Oregon -- which appeared on each coin. The price of gold dust rose from $12 to $16 an ounce as the Oregon Exchange Company purchased gold dust at $16 an ounce and circulated their coins. The account book of one Oregon City merchant indicates that as early as April 23, 1849, the current price of gold dust already had risen to $16 an ounce.
Commercial transactions were greatly facilitated by the appearance of the new, standardized coins. Imports and domestic trading were stimulated, and it no longer became necessary to transport goods from place to place to use as mediums of exchange.
Unlike California, which seemed to suffer continually from a shortage of denominations under $5 despite active private gold coining, Oregon used its gold to resolve this particular need in a unique manner. It did not mint small change but returned excess gold dust to California where it was exchanged for Mexican and Peruvian silver and shipped back to Oregon for service as small change, thereby contributing to the change shortage in California.
There is some difference of opinion concerning just how many Oregon coins were issued.
Perhaps the most reliable accounting comes from the minter himself (J.G. Campbell), who included his company's output in a report concerning the mint's cessation of operation:
After having issued some $10,000 and broken both of our crucibles (we had with much trouble been able to procure only two) having effected our object, viz., raised the price of gold dust and stopped the influx of South American currency, and every piece that we coined being at the expense of the company, we concluded to cease operations, and did so.
Historian James Henry Brown (Political History of Oregon) states that 6,000 $5 pieces and 2,850 $10 specimens were minted. While Brown can be mistaken, his figures more nearly accord with the effects described by Campbell, than do Campbell's. Campbell may also have sought to minimize the quanitity of coins issued because he feared a lawsuit or prosecution, or his memory may have been deficient.
Whatever the number of coins issued, the mint operated for less than six months. By Rector's own account, he "continued to work at it until September 1, 1849, when I determined to go to the mines again. They did not coin any more gold after I left."
At last Oregon had an adequate medium of exchange, much to the dismay of the Hudson's Bay Company. The latter's power over the settlement was finally broken when exchanging at its trading post no longer was essential for economic intercourse. In addition, the fur trade, its economic mainstay, had declined. By 1860, the British company had removed its assets from Oregon and Washington to Canada where it was already in difficulty.
Evidently the Oregon "beavers," along with various foreign coins and the California private mint products, adequately served the territory as a medium of exchange until the establishment of the San Francisco Mint in 1854 enabled United States currency to replace them. No more attempts were made at issuing coins in Oregon after September 1849, although there was serious talk in 1862 of building a mint in Walla Walla, The Dalles, or Portland.
The Dalles was the gateway of commerce in Oregon during the late 1860s and early 1870s. It was there that in 1868, $110,000 was expended to build a mint which was never completed, there no longer being enough profit in operate the diggings in California or elsewhere and therefore little gold to sustain a mint in that area.
-- Reprinted with permission from "Private Gold Coins and Patterns of the United States" by Don Kagin