Or, if you’re already familiar with this series, you may still enjoy my comments concerning the coins. We all need to bow down in the direction of Washington, D.C. and retroactively thank Congress for passing the Bland-Allison Act of February 28, 1878. Back then the American monetary system was fraught with problems, partially due to a glut of silver. In 1858, when ore containing silver and gold was found in Virginia City in Nevada Territory, there was a great demand for both metals. Mining expanded, and when Nevada joined the Union in 1864 it became known as the Silver State. Explorations continued in other areas, and by the late 1870s there had been large strikes of silver ore in Utah and, in particular, Colorado. The metal once scarce became common and the price dropped. Some mines closed, wages were reduced and there were many problems. In the meantime, the value of gold remained high; an ounce of gold continued to be worth $20.67 at the Mint and double eagles in particular were the mainstay of foreign commerce. Federal paper bills had been in circulation in quantity since 1861, but not everyone trusted them. In particular, banks and merchants in Europe and other foreign countries had no interest in receiving paper money in payment for merchandise and services. Double eagles were the standard. To fill the demand, more gold was converted into double eagles by far than for all other denominations combined.
In the mid-1870s the Silver Question arose. Wouldn’t it be nice if silver could be purchased by Uncle Sam, coined into dollars, and such pieces would absorb endless amounts of surplus metal? This happened with the Bland-Allison Act on February 28, 1878. The silver dollar became a reality. The design created by George T. Morgan for a pattern half dollar in 1877 was used for the dollar and mintage commenced in Philadelphia, Carson City and San Francisco. In 1879, the New Orleans Mint, closed since 1861, reopened to make dollars. From then through 1904 hundreds of millions of Morgan dollars were struck. They were not at all popular in general circulation.
Those who preferred “hard money” opted for gold coins. Silver dollars circulated to a very limited extent, mainly in Rocky Mountain areas. Huge quantities piled up, causing a problem with storage. In Philadelphia, the Post Office was employed to store the overflow from the Philadelphia Mint. In 1904, the boondoggle ended. Then, in 1918 many Morgan dollars were melted to obtain silver metal to be shipped to England and then to India. In 1921 Congress decided to make more silver dollars to provide additional coins for banking and to back silver certificates. Accordingly, in that year pieces were struck at the Philadelphia, Denver, and San Francisco mints.
In Part 2 of this article (coming in two weeks), I will discuss collecting Morgan silver dollars, one of the most popular pursuits in American numismatics.
