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Last hurrah or new dawn?

In the first eight months of 2009, the Mint has struck 18,764,500 silver American Eagle coins. That doesn’t seem like a large number to a generation of collectors who came to hobby maturity in the period after the Coinage Act of 1965, when mintages in tens of billions became the norm.

It is instructive from time to time to get perspective. I was looking through the mintage figures for the Morgan dollars. There are only seven pieces by date and mintmark that have higher individual mintages.

Of those, only the 44,690,000 1921 Philadelphia Morgan total seems unlikely to be surpassed by the time the final 2009 American Eagles are struck and sold to eager bullion investors.

That is interesting. The Mint’s current output is in the same league as the Morgan dollar from its heyday. Output demand is also for the same reason: Americans are uncertain as to what properly should be considered money and what shouldn’t be.

Prior to 1900 when the United States formally adopted the gold standard, silver was considered a monetary metal, albeit an inferior one to gold.

Farmers and other debtors liked its relative plentifulness and looked to the silver dollar and its paper money cousin, the Silver Certificate, to help ease the burdens of their debts.

The New York monied interests looked in horror on silver because at the time it signified expansion of the currency – another name for inflation.

They wanted their repayment of principal and interest in good, solid, uninflated gold.

The monied interests basically got their way, but not before a huge outpouring of Morgan dollars built up the supply of dollar coins. It was no accident that production basically stopped after 1904. Silver had been demoted officially and demand for silver dollars declined with its change in status.

The large mintages of 1921 did not signify any return of status to the silver dollar but an effort to replace rapidly 270 million that were melted in 1918. But even then, it took until 1928 to meet that total.

The American Eagle, like the Morgan dollar, is a product of a generation that is trying to figure out what it wants from money.

Will American Eagles be considered the last hurrah for coinage of precious metals, or the first step taken in 1986 to return to a precious metal based currency?