Before the 1960s, numismatists were little interested in the Morgan dollars issued from 1878 to 1921. They were readily available at banks, and most collectors were satisfied with a type coin. Beginning in the early 1970s, with specialized references such as that done in 1971 by Leroy Van Allen and A. George Mallis, there arose a growing interest in this series.
As with all coins, however, there is an historical background nearly as interesting as the coins themselves. It all began more than 150 years ago.
Prior to the American Civil War, which began in 1861, there was a large amount of silver coinage in the marketplace, but the silver dollar was not among them. This was due to an 1853 law that allowed the government to strike smaller silver coins on its own account while citizens could bring in bullion only for the dollar. The high price of silver in the 1850s then meant that few dollars were made.
The war soon put an end to the idyllic existence of American silver coinage. By late June 1862, there were no silver coins to be seen in circulation, except on the west coast, and the public was forced to use an ever-increasing amount of paper currency, some of which had values as low as three cents.
The oddest part of the situation was the ready availability of silver in the western part of the United States. Beginning in the late 1850s, massive strikes of silver ore had followed one another almost like clockwork. The Comstock Lode, in what is now Nevada, had fairy-tale proportions because of the vast amounts of silver it produced.
Although there was plenty of silver, it could not be used for coinage because the paper currency was not on par with the silver coinage. In addition, the government owed large sums of money to European bankers due to wartime orders for military supplies. Virtually every ship that left New York for London or other European ports carried a cargo of gold and silver to be credited against this debt.
As late as the summer of 1867, this outflow of silver continued but gradually began to diminish, though that of gold remained strong. Europe was now becoming awash in silver and did not need all that much more. Gold was, of course, always welcome.
By early in 1868, mine owners in the United States began to face a difficult problem. The mints were not buying silver for minor coinage and the price had begun to drop, although imperceptibly at first. The writing was on the wall, and something had to be done.
One way around the dilemma was to deposit silver bullion at the mints for coinage into dollars, which was permitted under the 1853 coinage law. Once the mine owner got his coins, he could do little except store them, because no silver coins were circulating in the eastern part of the United States and there was only a limited market for such pieces on the west coast. By 1871, the mintage of dollars had passed the million mark.
Official circles in Washington were well aware of the problem and made a strong effort in early 1873 to get rid of the excess silver. A new law authorized the Trade dollar, which was meant to soak up surplus American silver and send it to China, which was seen as a country with an inexhaustible demand for the pale metal. The Chinese preferred the Mexican dollar, however, and the Americans were in for heavy competition.
From 1873 to 1877, the Mint Bureau, under Director Henry R. Linderman, made strong efforts to get the Trade dollar accepted in China. By the latter year, it had gained a good foothold in the south of the country but little in the north.
Although the Trade dollar was becoming increasingly used in China, it was a long road, and public patience in the United States grew thin. A loophole in the law allowed the Trades to circulate in this country until 1875 but at less than face value, which meant that some laborers were being cheated by unscrupulous employers. The practice was not universal but wide enough to create political problems.
In the meantime, beginning in 1873, the Mint Bureau had ordered large coinages of dimes, quarters and half dollars. These were put into circulation during the summer of 1873, much to the delight of a public long unhappy with endless issues of paper currency.
One may ask why the government had not done this sooner. Before 1873, the three main currencies – gold, silver and paper – were not on par with each other; it was not until mid-1873 that the paper money finally was worth roughly the same as the minor silver.
Although paper had reached approximate par with silver in early 1873, it was touch and go for some months. Moreover, the whole operation was strictly illegal, and it was not until 1875, when Congress saw that the gamble had worked, that a law authorized the exchange of silver for paper.
Although the Trade dollar was becoming a political liability in 1877, the government was still buying large quantities of silver from the mine owners for subsidiary coinage. However, by the latter part of 1877, the marketplace was becoming saturated and merchants were calling for a reduced coinage. At this point, disaster struck.
In 1862, when silver coins had first been hoarded, many of them had been shipped abroad, primarily to Canada and Central America. Just why this was done is one of the mysteries of American numismatics, but the events of 1877–1878 are an even greater puzzle: the silver sent abroad now began to return in large quantities.
So many minor silver coins came back that the government, in early 1878, closed the mints to such coinage. Token amounts were of course made for collectors and stocking-stuffers, but the massive silver purchases abruptly ceased.
Among the mine owners and workers in the west there was sudden panic at the events of 1877–1878. Not only was the government no longer buying silver for minor coinage but the Trade dollar itself was under strong attack. In early 1878, the government put an end to that coinage as well, although proofs were struck for collectors until 1883. The silver mining industry was thus facing financial ruin.
It is at this point that we return to 1876, when a different situation held sway. Mint Director H.R. Linderman saw that all was going well and decided to redesign the minor silver coins as one of the legacies that he would leave for posterity. Not trusting Chief Engraver William Barber to do the job, Dr. Linderman asked his British counterpart in London, C.W. Fremantle, to find a qualified engraver.
It did not take long for Fremantle to honor this request. By the summer of 1876, negotiations were complete and George T. Morgan sailed for the United States in late September. Theoretically, as a “special engraver,” he was subject to the chief engraver, but in reality Linderman made the key decisions.
Morgan arrived at New York in early October, but instead of going to Philadelphia, he went to Washington for a series of meetings with the director. Morgan was told by Dr. Linderman to work on designs for the minor silver coinage; no one wished to change the Trade dollar, as that would have caused export problems.
The new engraver then went to Philadelphia to find that the famed City of Brotherly Love had left a few of its citizens out of that loop. Chief Engraver William Barber resented the arrival of Morgan, as did his son Charles, a member of the engraving staff.
To make Morgan understand just how welcome he was, the senior Barber rudely informed him that there was no room at the Mint for the new special engraver and he would have to find space elsewhere. Morgan managed to turn his boarding house apartment into a suitable spot.
Beginning towards the end of 1876, Morgan turned out a series of increasingly better sketches of proposed silver coinage designs. Morgan had attended classes at a local art school and met Anna Williams, a young Philadelphia school teacher. He persuaded her to pose for the head of Liberty.
Once suitable sketches had been executed, Linderman ordered William Barber to make room for Morgan. In particular, Morgan was allowed regular use of the reducing machine, which translated working plaster models into hubs for making pattern dies. The first patterns were half dollars, still well admired by collectors. The profile of Anna Williams was to be found on these patterns as his interpretation of a Liberty head.
Dr. Linderman was so impressed with the half dollar patterns that he asked Morgan to begin work on designs for gold eagles and half eagles. Artwork on both coins had been in place for decades, and Linderman saw a chance to improve these also. In addition, it was clear to all in 1877 that it would not be long before gold was on par with silver and paper for the first time since 1861.
By mid-summer 1877, one of the 10 dollar designs had reached the pattern stage, to be admired by all. The reverse eagle was the same one that later graced the Morgan dollar of 1878. The gold patterns, as well as those of silver, however, were played out against an increasingly difficult political situation as the price of silver continued to fall. By the fall of 1877, matters were at the crisis stage.
Silver forces in Congress, led by Representative Richard Bland, had introduced several bills to resume silver dollar coinage, but it was not until late 1877 that events strengthened their hands. The return of old silver from the Civil War era was to prove the “straw that broke the camel’s back.” This massive influx of silver forced the government to shut down silver coinage completely, meaning that the price of silver would go into a free fall.
Linderman realized that pressure would soon be too strong for President Rutherford B. Hayes to withstand. (The White House was opposed to any additional coinage of silver, especially dollars.) In the latter part of 1877, the mint director ordered Chief Engraver William Barber and George Morgan to engage in a special design contest for the silver dollar.
The two engravers worked quickly, and both used designs from their own past. Unknown to Barber, however, the contest was rigged from the beginning, as the director sent a secret emissary, A. Loudon Snowden, to meet with Morgan and advise him of the director’s every wish. Snowden made frequent reports to Linderman and even sent copies of the artwork.
Linderman also visited Philadelphia in person to examine the latest efforts by both men but spent more time with Morgan than Barber. As early as December 1877, pattern dollars had been struck under the supervision of both engravers and examined by Linderman. The latter then secretly advised Morgan, via Snowden, of the changes that had to be made.
In early January 1878, Snowden again visited Morgan at his rooming house and pointed out the latest Linderman suggestions. In particular, the director did not like certain aspects of the eagle’s wings and said that they had a slight box-like look. Morgan did his best to make the necessary alterations.
Both engravers made changes to their models, and it was not until mid-February 1878 that fresh patterns were struck from the revised artwork. In the meantime, the Congressional silver advocates were preparing for the final showdown. These forces wanted the public to have the right to bring silver to the Mint for an unlimited dollar coinage.
At this point, Senator William Allison of Iowa entered the struggle. An opponent of free silver coinage, he attracted enough support to offer a compromise in which the government would buy a fixed amount of bullion each month and turn it into silver dollars. It drew off enough Bland supporters that there was now the possibility of a stalemate. Bland realized this and came to an agreement with Allison. In essence, Bland accepted the Allison compromise, and its passage through Congress was now assured.
The Bland-Allison Act was soon passed by Congress but promptly vetoed by the President, who kept his word to oppose such coinage. Congress overrode the veto on Feb. 28, 1878, and the bill was now law. Director Linderman had his mandate for the dollar coinage.
The new law did not stipulate free coinage but rather a controlled one. The Treasury had to purchase between 2 and 4 million ounces of silver per month and coin a portion of it into dollars. It was essentially a government subsidy for the silver industry.
Once the law took effect, Linderman wrote Philadelphia Mint Superintendent James Pollock to inform him that the Morgan design had been picked for the new dollar. However, Pollock was forbidden to tell anybody but Morgan. The superintendent was also given instructions to prepare for a heavy mintage of the new coins. To this end, the workers began stockpiling planchets that would be used when all was ready.
Linderman visited the Mint a few days later and personally made the announcement about the winning design. The first coinage of the new Morgan dollar came on March 11 at 3:17 in the afternoon. By the end of the day, some 40,000 pieces had been struck and made ready for formal delivery on March 13. The first coin went to, of all people, President Hayes.
Despite the beginning of coinage, Linderman was still far from pleased at the final Morgan design. By March 18, the director had given orders for a number of alterations, including the famous change from eight tail feathers to seven.
Within a matter of weeks, the necessary dies, with the revised reverse using seven tail feathers, had been sent to the branch mints at San Francisco and Carson City. Coinage soon commenced at these two mints. It is not difficult for numismatists to obtain specimens of the 1878 coinage from all mints. There are also several varieties in the standard references sought after by serious collectors.
In XF-40, a reasonable grade for budget-minded collectors, 1878 dollars from Philadelphia and San Francisco may be obtained, according to the price guide that appears each month in Coins Magazine, for less than $70, while Carson City examples go for a little more, at about $150. (The variety with eight tail feathers brings close to $100 in this grade.) It is a relatively inexpensive way to own a piece of numismatic history.
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