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Special factors buffet Morgan prices

Making assumptions based on mintages regarding the prices of coins can be a dangerous thing to do. A small mintage does not by definition mean that a coin will be tough and expensive today. If you doubt that fact, the 1950-D Jefferson nickel is a coin well worth considering as it had the lowest mintage of any Jefferson nickel, but because most of the mintage was saved when it was released, it is far more available and far less expensive than might be indicated by the mintage.

It can work the other way as well as a coin with a seemingly large mintage because it was not saved or because of a variety of other factors can turn out to be far more difficult than we might expect.

Of all the coins in the history of the United States, it seems that the Morgan dollar stands out as the coin where more factors than is the case with any other issue seem to come into play.

Moreover, in the case of Morgan dollars with an extremely active market and very high demand, every factor influencing their availability especially in top grades seems magnified. That is seen in the fact that there are more books and information available on Morgan dollars than probably any other coin of the United States.

 

2012 U.S. Coin Digest: Dollars

Pulled directly from 2012 U.S. Coin Digest, the most complete and detailed color guide to U.S. coins.

That is a good thing as it enables us to examine virtually every Morgan dollar date to learn the unique factors that make it more or less available than expected. While those factors may not apply to other issues in quite the same way, the fact is that they can have an impact on different issues as well, so while making a study of Morgan dollar prices, it is possible to learn the considerations that should be applied to other issues whether they are Bust half dollars or Roosevelt dimes.

One of the first things you learn about Morgan dollars is that there is no rule that does not have exceptions. That said, it is frequently possible to suggest a factor that applies to most, although probably not all of the Morgan dollars from a given group.

Something that is rarely even mentioned when it comes to other types of U.S. coins is that the mint where a Morgan dollar was made oftentimes is a leading indicator as to whether the Morgan will be better than average, average, or below average in quality.

Not counting Denver, which made one Morgan dollar date, the 1921-D, there were four major facilities involved in Morgan dollar production. Of the four, it was San Francisco where the best quality Morgan dollars were made.

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In his book, The Official Red Book of Morgan Silver Dollars, Q. David Bowers suggests that perhaps the workers in San Francisco took more care as it was San Francisco where the likelihood of a freshly made Morgan dollar being released immediately into circulation was the greatest. That was because many parts of the country had already turned away from large silver and gold coins to use more convenient bank notes and that transition would continue throughout the period when Morgan dollars were produced.

The San Francisco area, however, was still the heart of those demanding silver or gold and that meant that the use of Morgan dollars and gold as opposed to bank notes was much higher there and places west of the Mississippi.

As a general rule it would be San Francisco dates where you would want to look for a top quality type coin, or an usually nice Morgan dollar as a gift as a date like the 1881-S and others from the early 1880s are available in large numbers even in a grade like MS-65 or better.

The general rule of large mintages of exceptional quality does not, however, apply to every San Francisco Morgan dollar. With a mintage of 100,000, the 1893-S was certainly not high mintage and has earned its place as the key Morgan dollar in most grades.

When it comes to quality, the 1904-S was seemingly left out when it comes to the string of exceptional San Francisco Morgan dollar dates. It is not a case where the 1904-S cannot be found in MS-65 or better, but rather a case where you are going to have to search unusually hard as the 1904-S frequently has a weaker strike. Also, the luster is at best uninspired and sometimes is simply poor.

You could probably say that Philadelphia and Carson City were the facilities that produced average quality. What that really means is that in the numbers produced at the two facilities can probably be found some nicer coins but there are likely to be others that are not of the highest quality. Compared to San Francisco, the search for an especially nice coin might well be tougher but nice coins still can be found.

And then there was New Orleans, which seemed to have an unusual number of average or even well below average coins of every date. We do not know why New Orleans quality was in the minds of most lower than the other facilities. It has been suggested that as New Orleans coins were primarily struck, thrown in bags and then placed in vaults there was really no motivation to produce better quality coins.

It also must also be remembered that the New Orleans facility had really been brought back from the dead, having produced no coins for 18 years from the start of the Civil War in 1861. It got going again to help out in the required Morgan dollar production. Whether it was really state-of-the-art in terms of equipment and capabilities is an open question, but one that may have had an impact on the quality especially in light of some of the large mintages that emerged from New Orleans.

Like the situation with San Francisco dates, the fact that New Orleans quality was frequently below average does not mean the facility never produced nice Morgan dollars. Some would suggest you simply have to look harder to find the nice ones, but there are even some dates where many are nice. The 1884-O for example is consider one of the most available Mint State Morgan dollars, and while there are some that are poorly struck, there are numbers that are above average and in some cases they come with frosty luster, making them very attractive. They may not challenge the best San Francisco coins, but they are certainly well above the average from New Orleans and there are other dates where the same could be said. The conclusion then must be that, while generally below average, New Orleans did have some moments when it produced nice coins.

Nor was it always a case of below average quality in terms of production techniques. Some dates simply had bad luck. With millions of Morgans sitting in vaults, there were regular attempts to inventory numbers. There was good reason to do this as in 1893 it was discovered that thousands of dollars were missing in New Orleans. That said, the counting process, which sometimes included a machine that was simply damage waiting to happen took a toll on large numbers of coins.

There was also the matter of routine handling. Morgan dollars were put in $1,000 face value canvas bags and the bags were them unceremoniously dumped into vaults. In many cases the bags were later shipped to other vaults such as the Treasury in Washington, D.C., and that process took a toll. A few dates are actually well known for bag marks, with the 1893-CC and 1895-S being famous, or perhaps more correctly, infamous for having larger than average numbers of bag marks. That said, the bag marks are certainly not limited to those two dates as any Morgan dollar with the possible exception of the proof-only 1895 can turn up with bag marks and even a single bag mark in an obvious place can turn an otherwise lovely coin into one with far less appeal.
Weak strikes and bag marks influence the quality of coins we find today, but in many cases Morgan dollars did not survive to the present day and in a couple instances they had a lot of help in disappearing.

The best known and certainly most important case of Morgan dollar destruction was the Pittman Act in 1918 that saw the melting of just over 270 million Morgan dollars. The recovered silver basically was shipped to India to aid the economy of an important part of the British Empire, our ally against Germany in World War I. It would be nice to say that we know what Morgan dollar dates were destroyed and in what numbers, but we do not know. Records were not kept by date and mintmark.

The enormous number destroyed certainly suggests that some dates could have almost entirely been destroyed and that was actually suspected of some, including the proof-only 1895, which had a mistaken mintage total of 12,880. The suspicion was that the 12,000 business strikes might have been totally destroyed. In fact, they were not as they were never made, but other dates like the 1898-O, 1903-O and 1904-O were thought to have had literally their entire mintages destroyed. In fact, in all probability, large percentages of their mintages were destroyed, but not all. Thousands of examples of each emerged from the Treasury in the 1962-1964 bag releases. That was an unpleasant surprise for a few owners especially in the case of the 1903-O, which had been a significant rarity up until that time with a price around $1,500. After the releases, the 1903-O dropped from about $1,500 to close to $15 in Mint State where they had been previously virtually unknown.

Numismatic Guaranty Corp. reports it has graded 6,188 1903-O dollars. Nearly all of these are MS-60 and higher. A total of 1,257 pieces are MS-65. Some 347 are MS-66 and another 41 MS-67.

The current MS-65 price is $690, which is lower than the $1,500 1962 price.

There is very little doubt that millions of examples of the 1898-O, 1903-O and 1904-O were probably destroyed in the Pittman Act melting, but the numbers that remained are large enough to supply the market with enough examples in top grades to keep prices from reaching the sort of levels that back in the 1950s seemed appropriate for great rarities.

In some cases, however, the Pittman Act melting certainly had an impact on prices. The 1896-S had a mintage of 5 million pieces. That was not a large San Francisco total, but all things being equal it should have been enough to provide a good supply of typically very nice San Francisco Morgan dollars. But instead of being a few hundred or even a few thousand dollars in MS-65 like most San Francisco dates, the 1896-S is currently at $19,500 in MS-65. NGC has graded just 21 of these in that grade.

In fairness, the 1896-S has a somewhat lousy strike for a San Francisco Morgan and bag marks can be a problem, but the best guess is that of the 5 million made perhaps as many as one million might have been placed in circulation at the time and then millions more were melted, making the 1896-S one example of many where melting has had a large impact on the supplies available today and their prices.

Less often mentioned was a second major melting of Morgan dollars during World War II. Perhaps 45 million or 50 million were destroyed to recover the silver for other uses.

Then there was 1980. Many cannot imagine significant melting of Morgan dollars simply because the price of the silver from which they are made is high. Of course it becomes much easier to imagine when the price of silver is $50 an ounce as was the case back in 1980. When silver is near $50 an ounce, the silver price of a Morgan dollar in any grade is almost $39. At that time, there were a lot of average circulated Morgan dollars that looked pretty good as a bar of silver in their owners’ minds.

We cannot really know how many additional Morgan dollars were lost around 1980, but the best guess is that it was a few million pieces. While we cannot point to any specific dates, the majority were certainly available dates in circulated grades. This likely had little to no impact on relative scarcities.

While we talk about melting reducing supplies, there is another Morgan factor that assured larger surviving supplies than would have been the case for other series minted during the 1878-1904 primary production period for the dollars.

That factor is the large quantity that was stored for many years. The Morgan was not unique in that there have been other cases where coins sat in vaults years before being released. What is unique in the case of Morgan dollars is that millions sat in vaults not for years, but rather for decades before being released. These coins have had a huge impact especially in the Mint State grades.

These stored coins were significant because the Morgan dollar attracted almost no interest from collectors back at the time they were made. The passage of time, however, saw new Morgan dollar collectors although still not many as collecting silver dollars was not the sort of thing many could afford. That said, more collectors meant more dealers would be interested in $1,000 bags and more of the coins would be saved as to the dealer there would seem to be greater potential to sell a Mint State Morgan dollar than there was in perhaps the 1920s.

Had the bags been released in the 1920s, there would be far fewer examples of most dates in top grades than there are today, but since the releases back in the 1920s were modest while the releases in the late 1950s and early 1960s were much larger, we have many more nice Morgan dollars than would otherwise be the case.

As was seen in the case of the 1898-O, 1904-O but especially the 1903-O the release of bags basically represents our entire supply today. If, however, there were no bags released, it made a date significantly tougher in Mint State. That was seen with the 1895-O, which is one of the great Morgan dollar rarities in Mint State and especially MS-65 or better. The 1895-O started with a small mintage of 450,000, but as Bowers suggests in his book regarding the 1895-O in circulated grades, “There are scads of high EF and AU coins around, indicating that many 1895-O dollars must have been in circulation for only a short time.”

The fact that there were so many examples of the 1895-O released into circulation apparently meant there were basically no bags left by the time 1962 rolled around. Without fresh bags, there was no supply, proving how few people actually collected and saved Morgan dollars back in the 1890s with the last report of any Mint State coins hitting the market being up to a couple hundred pieces of this date in the early 1950s. The result of the lack of supply is a current price of around $165,000 in MS-65 with even an MS-60 being $15,500.

Another classic case, actually case, where the Treasury supplies made a huge difference were in the historic issues of Carson City. Prior to the 1960s, the Carson City dates were extremely tough in many cases thanks to low mintages. When the sale of bags for face value was stopped by the Treasury, there was a big surprise in that among the three million silver dollars still sitting in the vaults, the overwhelming majority were Carson City dollars still sitting in their original bags.

The impact was immediate and for good reason as sitting in the Treasury were huge percentages of the mintages of some dates. The largest number was 962,638 examples of the 1884-CC, which had a mintage of just 1,136,000. Other dates also had more than 50 percent of their entire mintages still sitting in the vaults. It was primarily the dates from 1880 to 1885 and the later sale of those coins to collectors while at premium prices gave everyone a chance to acquire Mint State Carson City dollar dates where prior to the sale finding any example of certain dates was a major challenge.

These coins were put in large plastic holders by the General Services Administration, which sold them in a series of sales in the 1970s to early 1980s.

The best example of the impact comes in the form of the 1885-CC, which is actually the toughest Morgan dollar except for the proof-only 1895, to find in circulated grades. Today the 1885-CC is $615 in MS-60 and $1,125 in MS-65 thanks to the sale by the government of 148,285 examples. That is confirmed by the grading services where the Numismatic Guaranty Corporation and the Professional Coin Grading Service have combined to grade over 16,000 examples in Mint State and the number is rising every day. In circulated grades, however, the total number of the 1885-CC seen so far by the two services combined is just 18 coins. Clearly without the GSA sales of over 148,000 examples, the 1885-CC would be an extremely expensive date virtually unavailable for average collectors as like others it was certainly not saved in any numbers when it was released.

The Morgan dollar is really a classic case of a coin where many factors were at work to determine whether there would be any significant supplies of a specific date today. Those factors could mean larger or small supplies of the specific date and there is no way to predict availability simply by mintages.

The Morgan dollar is certainly the most extreme example of this phenomenon, but it is worth noting as you consider other coins as well that other denominations can have similar factors in their history, making it not only interesting but virtually required that when evaluating the price of a specific coin you consider more than their mintage for they are likely to have many interesting and important events in their history that influence their availability today.

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