Hamilton did not package bonds from the American Revolutionary War into new federal bonds and bring them to Europe for financing. Instead, he sold 80 percent of Bank of America's shares to the public. As long as no single person held more than one thousand shares, the American government, with its 20 percent stake, would remain Bank of America's largest shareholder.
Its market value was as high as ten million US dollars, yet Bank of America had taken on twenty-five million in national debt. Even selling off every portion of Bank of America available for financing would not be enough.
The simplest solution was to print money, but America had passed the Coinage Act. Although federal currency was paper money, America also had silver ten-cent coins with a silver content as high as 90 percent.
After so many years of trade, America could not possibly have had no precious-metal reserves at all. Besides, the bonds issued by Bank of America were still drawing in vast amounts of money from Europe. During the Anti-French Coalition wars, the gold-silver exchange rate fluctuated. Specialists in London, Amsterdam, and elsewhere exchanged gold for silver, then shipped it back to America to mint into ten-cent silver coins.
These silver coins had high silver content, but they were very small, keeping their total value below ten cents. Hamilton then used these coins, known as "American pennies," to purchase domestic federal bonds. At the time, Continental currency and war bonds had become little more than waste paper. Hamilton used federal postal revenues as a pool of funds to exchange old bonds and currency for new ones. Many opposed redeeming old notes in full at face value, since that meant rewarding speculators at the taxpayers' expense.
But Hamilton argued that government debts had to be repaid in full,