Memorable Morgans: Silver Dollar Has Varied Past|
April 03, 2012
This article was originally printed in Coins Magazine.
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The mint struck hundreds of millions of Morgan dollars from 1878-1904, and then again in 1921. The coins were supposed to help the silver industry, prop up the metal’s market price and become a mainstay of the monetary system. Morgan dollars failed on all counts, but the series did leave behind memorable coins for future generations of collectors.
Officially, they were “Liberty Head” standard silver dollars. However, newspapers of the late 1800s usually referred to them as “Bland” dollars because Sen. Richard “Silver Dick” Bland made them possible. The Bland-Allison Act of 1878 required the government to purchase massive quantities of silver and use it to strike silver dollars.
Years later, collectors began calling them “Morgan” dollars in recognition of their designer, Mint engraver George T. Morgan. Strapped for time, he adapted the Liberty head and eagle designs from a pattern half dollar.
Anna Williams deserved some of the credit, even if she didn’t want it. Williams was Morgan’s model for Liberty. The New York Mail and Express later said:
“Every man, woman or child who has a silver dollar carries the handsome profile of the Philadelphia schoolteacher, Miss Anna W. Williams. Her classic features have been stamped upon millions of the silver disks.”
One of history’s great ironies is that President Rutherford Hayes received the first Morgan dollar from the coinage press. Congress overrode Hayes’ veto of the Bland-Allison Act. Lucy Scott West, who was a relative of First Lady Lucy Webb Hayes and lived in the Executive Mansion, wrote in her diary:
“The ‘Silver Bill’ has passed, and yesterday Cousin Rutherford received the first silver dollar coined under the new act. It is a very handsome piece of money.”
Hayes’ presentation dollar, a proof, has survived to this day. It has a dull finish and apparently was mishandled and stored in less than ideal conditions over the years.
Mint Directory Henry Linderman received a sample Morgan dollar in February 1878. A March 6 newspaper item said it was evident a new vault would be needed to store the 20 tons of silver dollars that were about to be transferred to the Treasury Department.
On March 12, 1878, Linderman wrote that the Mint was striking silver dollars at the rate of 33,000 a day. Interest in the new coins was running high, and strong demand was reported for the first few days. The first 5,000 Morgan dollars were distributed to shopkeepers, for display in store windows, and to prominent people across the country.
Initially, Morgan dollars were available only in exchange for gold coins. The Dec. 5, 1878, issue of the Pentwater News, published in Pentwater, Mich., said:
“The act of Congress of Feb. 28, 1878, required the coinage of silver dollars of the weight of 412-1/2 grains Troy, of standard silver. The first coins under this act were received at this office from the Mint in March 1878, and were exchanged with the public for gold coin.…
“The largest payments of silver dollars have been made at New York and San Francisco, but the coins issued at those points immediately find their way back to the Treasury vaults, either as receipts from Customs, or as deposits on account of silver certificates, or in payment of subscriptions to the 4 percent loan.”
The Philadelphia, San Francisco and Carson City mints struck Morgan dollars in 1878. Under the heading “The Dollars Coming,” the March 12, 1878, issue of the St. Joseph Gazette reported:
“The Director of the Mint today learned by telegraph from the Philadelphia Mint that the Superintendent expects to receive the first delivery of new silver dollars on Wednesday; that the supply of dies for the same coin will be ready to forward to San Francisco and Carson by Tuesday or Wednesday next.”
Carson City was last to pitch in. The Ap ril 22, 1878, issue of the Providence Evening Press said:
“The Director of the Mint is informed that the coinage of the new dollar has been commenced at the Carson City Mint. Coining having been commenced at San Francisco last Wednesday, all the Mints now in operation are now at work on the standard silver dollar.”
The New Orleans Mint joined the party in 1879, reopening for the first time since the Civil War. It struck nearly 3 million silver dollars with the “O” mintmark in 1879. The amount might have been even greater if there had not been a shortage of silver deposits. The Mint director wrote in his Annual Report:
“The New Orleans Mint has not been worked to its full capacity, for the reason that like difficulty has been experienced at the San Francisco and Carson City mints in procuring supplies of silver bullion.”
Officials had planned to strike many 1879-O dollars from Mexican silver. New Orleans Mint superintendent Henry Foote wrote:
“When this Mint was reopened for coinage, it was expected that a considerable amount of silver bullion would be supplied from Mexico, but these expectations have not thus far been realized.
Notwithstanding the fact that the department has offered to pay the bankers and bullion dealers in New Orleans the highest market price for silver, deliverable to the Mint in that city, only two or three offers for the sale of silver have been made to the department by them, and in each case at a price above the market rate.”
By 1888, however, there were plenty of New Orleans silver dollars. In fact, there were so many in storage that it was difficult to keep track of them. The Nov. 14, 1888, issue of the Muncie Daily News reported:
“The Treasury officials have discovered that they have been robbed of new silver dollars. To what extent and by whom they do not know. The Secret Service detectives are making an investigation.
“The Mint at New Orleans has been overloaded with new silver coin, and the department is shipping millions of dollars to Washington to be stored in the new silver vault in the Treasury courtyard. The money is shipped in sealed wooden boxes, each containing two bags of a thousand dollars each. “When one of the bags was opened at the department, it was found to contain nothing but shot. A second box was opened and one of the bags in it was found to contain nothing more valuable than lead.
“The matter was at once reported by the Secretary of the Treasury and by him referred to the Secret Service officers, who are making a careful and active investigation.
“The boxes are carefully sealed before they leave the Mint, and guarded on the train. They are taken from the depot at Washington to the Treasury in a large express wagon, caged in on all sides with heavy steel wire and guarded by representatives of the express company of the Treasury, who are heavily armed and sit on the boxes within the cage.
“Every care that can be thought of is taken to guard against loss, and the detectives are puzzled to know how it was possible to substitute the shot for silver dollars. It is impossible at this time to tell how extensive the robbery has been.…
“Investigation showed that small amounts had been taken from each of a number of boxes. The department will probably hold the express company responsible, but it will take some time to learn the extent of the loss.”
At Carson City, a severe silver shortage threatened the Mint’s existence. The Nov. 7, 1885, issue of the Dubuque Daily Herald said:
“On recommendation of Dr. Kimball, Director of the Mint, Secretary Manning authorized the suspension of all operations at Carson City, Nevada. Since the suspension of the coinage of standard silver dollars last June, the Mint has been conducted as an assay office. Deposits, however, have been so insignificant during the last few months that there is now no reason for a continuance of this office.”
The Carson City Mint struck only 228,000 Morgan dollars in 1885.
During the fiscal year that ended on June 30, 1886, the government purchased more than 25 million ounces of silver, at an average cost of $1.03 an ounce. Silver bullion was also transferred from the New York Assay Office to the Philadelphia Mint for coinage into silver dollars.
The government didn’t purchase any silver during the fiscal year for silver dollar production at the San Francisco Mint. “The purchase of silver, as well as the coinage of the silver dollar, has been confined exclusively to the Mints at Philadelphia and New Orleans,” the Mint director wrote, “where the silver could be more economically obtained and the coinage executed with greater advantage to the government.”
But the director’s comments proved inaccurate, as the San Francisco Mint struck nearly 1.5 million silver dollars in 1885. In 1886, it turned out more than 20 million.
In 1889, the Carson City Mint again fired up the silver dollar presses. It struck 350,000 “cartwheels” with the “CC” mintmark. In 1891, production jumped to more than 1.6 million, despite a temporary suspension.
An 1891 law stipulated that redeemed Trade dollars were to be melted, and the metal used to strike standard silver dollars exclusively. The bullion was stored at the Philadelphia and New Orleans mints. By the spring of 1891, the Philadelphia Mint had more than 1.3 million ounces of stored silver. New Orleans had more than 3 million ounces.
The law would have resulted in the striking of 2.5 million silver dollars a month. However, Mint Director Edwin O. Leech decided it was impractical, especially in light of the heavy demand for smaller silver coins. The April 7, 1891, issue of the Baltimore American quoted Leech:
“The mandatory coinage of the silver dollar ceases on July 1. After that date, we will coin the Trade dollar bullion into silver dollars at our leisure.”
In 1890, the Sherman Silver Purchase Act replaced the Bland-Allison Act. The Sherman Act required the government to purchase and coin twice as much silver as before. The idea was to relieve the strain on farmers resulting from falling silver prices.
Farmers weren’t the only ones in trouble. Carson City had fallen on hard times, as reported in the Dec. 9, 1892, issue of the Spokane Daily Chronicle:
“A special from Carson City, Nevada, says: ‘The most notable evidence in Nevada of the depressed condition from the low market price of the white metal, is the constant depopulation of the town, which a few years ago produced many thousands of dollars’ worth of gold and silver.
“Virginia City at one time contained 20,000 people and the annual output reached millions. At present the population is 7,000.
“Mines formerly paying magnificent dividends are running behind. The quartz mills on the Carson River when silver was at par ran 328 ore stamps, each with a capacity of three tons of ore a day. Now there are 66 stamps in operation and they are not run to their full capacity.
“There is hardly enough bullion to keep the Carson Mint in operation, and Nevada’s small towns are being deserted.”
Economic conditions soon deteriorated nationwide as railroad overexpansion and a run on banks triggered the financial Panic of 1893.
The government had used coin notes to purchase bullion for silver dollar production. Many of the notes were being redeemed for gold, threatening depletion of the U.S. gold reserve.
On Feb. 23, 1893, the Philadelphia and Reading Railroad went bankrupt. By the end of the year, more than 15,000 companies and 500 banks had failed.
President Grover Cleveland persuaded Congress to repeal the Sherman Silver Purchase Act, but the depression lasted until 1897.
In the South, seasonal demand cut into the Treasury’s silver dollar stockpile in 1893. The Aug. 10, 1893, issue of the Lawrence Weekly World reported:
“No more silver certificates will be issued by the Treasury for the present, for the limit prescribed by law has been reached. That is, today as many silver certificates are now outstanding as there are standard silver dollars coined and in the Treasury to redeem them.
“Under the Bland Act, 339,936,376 standard silver dollars have been coined. The reduction in the number of standard silver dollars in the Treasury has been brought about by the large demand recently for silver dollars from the South to move the crops in Georgia and the Carolinas, and to pay off hands at work on the cotton crop.”
Despite seasonal and regional demand, there were more than enough silver dollars to go around. In 1893, Acting Mint Director Robert Preston said that silver dollar production was “limited” because few of the coins were needed for the redemption of silver certificates.
The Philadelphia Mint struck fewer than 400,000 1893-dated dollars. The San Francisco Mint turned out only 100,000, completing the entire production run in a single January day.
The Carson City Mint struck 677,000 silver dollars in 1893, the last with the “CC” mint mark. The Lawrence, Kan. Daily World reported in May 1893:
“Owing to the small amount of free bullion deposited and the heavy expense of coinage at the United States Mint at Carson City, Nev., Secretary Carlisle has decided to suspend coinage after operations at the Mint after June 1.
“With the suspension of coinage at Carson City, the coinage of silver dollars will be discontinued for the present, as there is no demand for this class of money. Fractional silver quarters and half dollars are now being recoined at the New Orleans, San Francisco and Philadelphia Mints.”
Silver dollar demand fluctuated in the 1890s. In 1894, the Treasury secretary ordered the San Francisco Mint to strike an “unlimited” number of silver dollars. It turned out more than 1.2 million, while the Philadelphia Mint struck only about 110,000.
Improper storage resulted in the deterioration of many stored silver dollars. In his report for fiscal 1896, Mint Director R.E. Preston wrote:
“On re-counting the silver dollars stored in the large vault, the bags are found to have mildewed and broken, the result being that the coins in many instances are loose, scattered throughout the piles and cast on the floor. At a moderate estimate, at least 4 million of them will be found to be corroded so much as to make them totally unfit for circulation, making their recoinage necessary.
“As each bag is counted and weighed, the values, weight, date, designation of vault and the name of the counter are written upon a linen tag attached thereto. It is then placed in a wooden box, the box being numbered to correspond with the number on the tag, each box thus holding $1,000. The box is then nailed and sealed, and the contents registered in a book.”
The physical mishandling of silver dollars was nothing compared to the ideological batting about they experienced at the center of the “Free Silver” debate. Silver advocates favored an inflationary monetary policy using the “free coinage of silver.” Instead of the traditional ratio of 16 to 1 (16 ounces of silver worth one ounce of gold), they wanted a ratio of 32 to 1.
Gold standard supporters warned that “Free Silver” would result in dishonest dollars. Debts would be repaid with “shrinking” dollars, worth much less than when the debts were incurred.
Orators and authors championed both sides of the issue. The great Free Silver debate culminated in the 1896 presidential election, which pitted silver candidate William Jennings Bryan against gold standard supporter William McKinley. Voters resoundingly rejected Free Silver.
The issue faded away after 1900, and the Morgan dollar followed a similar path. When the government stopped silver dollar production in June 1904, it looked like the final chapter had been written. The July 1, 1904, issue of The Day, published in New London, Conn., ran the following item:
“’There will never be another silver dollar coined in this country,’ said George T. Roberts, Director of the United States Mint, in an interview here.… ‘No, there will be no more new silver dollars turned out by the government Mint unless by some chance a 16 to 1 Congress should be elected, for the supply of silver bullion purchased under the Sherman Act is exhausted.’”
The June 25, 1904, issue of the Boston Evening Transcript provided additional information about the striking of the last silver dollars:
“Probably the last silver dollar that will ever be issued by the Government of the United States has been coined. The coinage statement for June will show the coinage of about 400,000 in standard dollars. These coins are now all completed in the Philadelphia Mint.”
Several years later, the Mint destroyed the Morgan dollar dies in the belief they would never be needed again.
In 1916, the government transferred 600 tons of silver dollars—about 40 million coins—from New Orleans to Philadelphia. A class of ships known as revenue cutters made the transfer.
Treasury Secretary Byron Newton said he was “utterly unafraid” of a submarine attack or a heist by “newfangled Captain Kidds.” But he refused to say exactly when the transfer would take place.
World War I had a dramatic impact on silver dollar policy. In 1918, the Pittman Act cleared the way for a Morgan dollar revival. Under the terms of the act, the government melted more than 250 million silver dollars and sold the bullion to England. Another 11 million were melted and recoined into smaller denominations.
The new law required the melted dollars to be replaced with new dollars. The Philadelphia, Denver and San Francisco mints struck 1921 Morgan dollars, using dies that were re-creations or reproductions of the original design. The relief was flatter, and many design details were slightly different on the 1921 version.
The 1921 Morgans were stand-ins until the new Peace dollar dies were ready in late 1921. However, hundreds of millions of Morgan dollars still resided in government vaults. Bank releases in the 1960s and government sales from 1973 to 1980 helped propel the memorable Morgans to the forefront of coin collecting.
More Coin Collecting Resources:
• 2012 U.S. Coin Digest: Dollars
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• Strike It Rich with Pocket Change, 2nd Edition
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On April 3, 2012 Brett Irick
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