Carson City Morgan Silver Dollar – Silver, Gold and Government
The Morgan Silver Dollar was minted in 1878. It was issued for American commercial use, mostly as a trade dollar with the Orient. The dollar was continuously minted until 1904.
Carson City Nevada: A group of silver mine owners had formed a lobbying group, led by Congressman Richard “Silver Dick” Bland, was able to pass legislation that made the U.S. Treasury its biggest customer.
The Comstock Lode, one of the greatest silver strikes in history, was discovered in Nevada in the late 1850s. The strike put downward pressure on silver prices worldwide. In 1878 Congress passed the Bland-Allison Act which required the Treasury Department to purchase large amounts of silver, and to strike it as coins. For reasons of economy, the Treasury chose to strike the silver as dollars (From Wikipedia).
In 1861 Carson City became the capital of the Nevada Territory, and remained the seat of state government when Nevada joined the Union in 1864. The city was founded in 1858 by Abe Curry who later became one of the most influential personalities in the territory, mostly due to the town’s riches derived from silver mining. During the “silver rush”, the population of the Nevada mining district numbered in the tens of thousands, where the scarcity of hard money made routine financial transactions difficult. The silver was shipped (over the Sierra Nevada Mountains) to the US branch mint operating in San Francisco, and then back again after being converted to coinage. This practice was very expensive and risky, as the trails were closely patrolled by opportunistic thieves.
Nevada Territory mine owners petitioned Congress for a new branch mint in their vicinity. Legislation to establish a mint in the Nevada Territory was approved on March 3, 1863. Abe Curry lobbied the government to choose Carson City as the site of the new mint. In September 1863, the federal government purchased Block 65 from private citizens in Carson City, for the purpose of constructing the coining facility.
The very first Carson City Mint coin to debut was the 1870-CC Liberty Seated silver dollar.
Government and its impact on the Carson City Mint
In 1834, the US government established the value of silver and gold at a ratio of 16 to 1.
The government specified the weight of silver or gold to be coined into one dollar worth denomination of hard money. Anyone could bring their bullion to the Mint and receive dollars worth of coins in exchange for ounces of bullion. This practice set the price the government was willing to pay per troy ounce of silver and gold (1oz Gold = 16oz Silver = $20).
This worked well until the late 1840s and 1850s, when the supply of gold increased dramatically (during California gold-rush), upsetting the existing gold-silver balance. Consequently, silver became more scarce relative to gold, meaning silver sellers could sell 16 ounces of silver to private buyers(often foreigners), for more than one ounce of gold. As a result, they often preferred to sell their silver this way rather than take it to one of the US mints for conversion into coins.
As the prolific Comstock Lode (Nevada) and mines in Colorado dumped silver into the open market, this situation reversed itself. By the mid 1870s, private buyers were purchasing 16 ounces of silver for less than one ounce of gold.
Based on the Treasury’s offer to buy silver at the ratio of 16 to 1, silver owners came to the Carson City Mint and other US mints, demanding that their silver be coined into dollars. They found out that Congress had already enacted the Coinage Act of 1873, eliminating the silver dollar, in effect, demonetizing silver and committed our country to a gold standard only. Silver advocates denounced the law and managed to persuade Congress to pass the Bland-Allison Act in 1878.
Under the Bland-Allison act, the Treasury Dept was required to purchase $2 to $4 million of silver monthly and mint it into dollar coins, in a quest to stabilize the price of silver at artificially high levels. The dollars were named after George T. Morgan, the designer of the new coin. Accordingly, large quantities of Morgan silver dollars were minted, but many did not circulate well, especially in Eastern States where silver was resented. Millions of the unused coins ended up in Treasury storage vaults for decades.
In 1884 a Democrat, Grover Cleveland was elected to the White House. In September 1885, Cleveland fired all mint employees and completely shut down the Carson City mint.
When Benjamin Harrison recaptured the presidency for the GOP in 1888, the Democratic appointees were replaced by Republicans. In 1889, Carson City mint was allocated funds to resume coining operations.
The Bland-Allison Act was modified by the Sherman Silver Purchase Act of 1890. The Act mandated the government purchase 4.5 million ounces of silver each month, to be paid for with Treasury bonds redeemable in either gold or silver.
“Unexpectedly”, most bond holders redeemed their notes in gold, depleting the Treasury’s gold reserve and throwing the entire country into a severe financial panic in 1893, leading to the repeal of the Sherman Act and greatly slowing the production of silver dollars.
On June 1, 1893, Mint Director Robert Preston ordered a cessation of coining operations at the Carson City Mint.
The bullion supply for silver dollars ran out in 1904 and minting of silver dollars ceased.
The Pittman Act of 1918 required the government to convert silver dollars into bullion and then create an equal number of new coins from the bullion. More than 270 million silver dollars were melted down. Most of the coins were Carson City silver dollars.
To comply with the Pittman Act, production of the Morgan Silver Dollar resumed in 1921 for a brief period of time. You’d think that would be the end of the story, but it’s not. The Silver Act of 1942 resulted in the melting down of even more Morgan Silver Dollars. In fact, it’s estimated that more than 80% of the Morgan Silver Dollars that were produced are no longer in existence.
In 1962, the U.S. government began selling original Treasury bags containing 1,000 silver dollars for face value. During the early 1970s, the General Services Administration packaged and sold off most of the remaining government-owned Morgans, many of which were minted in Carson City.
“The Morgan Dollar is a silver United States dollar coin. The dollars were minted from 1878 to 1904 and again for one more year in 1921. The Morgan Dollar is named after its designer, George T. Morgan, who designed the obverse and reverse of the coin. Morgan’s monogram appears near Lady Liberty’s neck on the obverse. The dollar was authorized by the Bland-Allison Act of 1878. It has a fineness of .900, giving a total silver content of 0.77344 troy ounces (24.057 grams) per coin”
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