This article was originally printed in the latest issue of Numismatic News.
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It was without a doubt the greatest single treasure in the history of American numismatics and it was available for face value. The treasure in question was not the buried loot of a gang of bank robbers or the accumulation of some character who did not trust the government. In fact, it was the treasure of the government itself and for decades it was stored and simply paid out to anyone who would show up with $1,000 as for that price they could receive a bag containing 1,000 silver dollars and there were bags enough to hold hundreds of millions of dollars at one time. Some were rare and some thanks to the coins in the bags not so rare.
How the government came to be in a position where it was happy to sell bags of silver dollars to anyone with $1,000 is part of the story. Prior to 1878 there was no large government hoard of silver dollars. What there were included some bags of Seated Liberty dollars, but there could not have been many as there had never been heavy Seated Liberty dollar mintages. In fact, only twice had the mintage of the Seated Liberty dollar topped the 1 million mark and many times they had been melted or exported, meaning it was not possible that there would be large amounts of Seated Liberty dollars in Treasury vaults.
There were also some Trade dollars as the government had to redeem Trade dollars in the face of political problems. The Trade dollar after having its legal-tender status revoked in 1876 had become an issue. They were trading not as dollars but as silver bullion, causing many to lose money as the dollars they accepted at what they thought was face value were worth far less than their face value. Eventually the government agreed to redeem them if they were not damaged and that saw millions but not tens of millions of dollars worth return to the Treasury for destruction.
The basis of the great Treasury silver dollar hoard was the Bland-Allison Act of 1878. It required government purchases of silver each month from which silver dollars were to be made. The amount of the silver purchases was far in excess of anything needed for regular commerce but having circulating silver dollars was not the idea as the idea was to use up excess silver from the mining industry.
Almost immediately the silver dollars began to pile up and as the Bland-Allison Act was ready to expire there came the Sherman Silver Purchase Act in 1890 requiring more silver purchases and more silver dollar production and the following year there was also the 1891 Trade Dollar Recoinage Act, which allowed for the melting of redeemed Trade dollars with their silver also being used in additional silver dollar production.
That combination of legislation resulted in an interesting coin in the form of the 1891-O Morgan dollar. The 1891-O had a mintage of nearly 8 million pieces and it was made from silver that was covered by one of the three pieces of legislation with 1,919,913 being made from the last silver purchased under the Bland-Allison Act, 2.5 million being made from the first silver purchased under the Sherman Silver Purchase Act and 3,534,616 being produced from the silver of melted down Trade dollars under the terms of the 1891 Trade Dollar Recoinage Act. You cannot tell which silver is in any particular 1891-O silver dollar, but it does make the date interesting as it basically is a product of silver obtained from all of the legislation involved in the early years of Morgan dollars.
By the time the last of the required silver purchases was made into silver dollars the numbers were enormous. The silver from the Bland-Allison Act had produced 378,166,793 silver dollars while the silver of the Sherman Silver Purchase Act had resulted in 187,027,345 silver dollars with the melted Trade dollars amounting to another 5,078,472 and the totals were not counting proofs. The combined total of 570,272,610 was remarkable in light of the fact that just over 30 years before the United States had not seen a silver dollar mintage of even 1 million pieces.
There were no precise totals at the time but the best guess is that perhaps 50 million of the silver dollars were in regular use. It could have been a little more but realistically the use of silver dollars had never been widespread and by 1904 much of the nation was perfectly content using bank notes and not large silver and gold coins. The bulk of the use of silver dollars would be in the West.
At the rate silver dollars were required for commerce, it was not out of the question that one government official who suggested that the United States might never mint another silver dollar after 1904 was not too far off the mark. The original hubs to create Morgan dollars were destroyed in 1910 and the coins sat in vaults either at the Treasury or other scattered around the country. They were used to back Silver Certificates.
In 1918 the World War I Pittman Act authorized the melting of up to 350 million pieces to provide bullion to shore up the currency of India. (Another 50 million were melted during World War II to provide bullion for U.S. coins.)
In the end, the Pittman Act would result in the destruction of 270,232,722 dollars. That created a problem and in 1921 there was a call for new silver dollar production, which was needed simply to serve as backing for Silver Certificates which at the time promised silver dollars. That produced additional Morgan and Peace dollar mintages. The Pittman act loss was fully made up with the coinage of 1928. But additional Peace dollars were struck in 1934 and 1935 as part of the New Deal monetary efforts. After 1935, the total dollars in vaults would not have been as large as in 1904 but there were still hundreds of millions of pieces.
Slowly but surely the dollars began to pile up in the lower level of the Treasury Building next door to the White House. What dollars were in that building is one of the fascinating guessing games in history. The Carson City excess dollars had been shipped out of Carson City to Washington about the turn of the century and that appears to have spared most of them from being melted under the terms of the Pittman Act. It also may have seen large numbers end up in the back of the vaults, meaning they would be the last coins to be paid out, explaining why when the silver dollar bag sales were halted in 1964 leaving only roughly 3 million dollars, the bulk of the total was Carson City dollars.
The rest of the dollars potentially were scattered at the time of the Pittman Act. The melting would have certainly thinned out supplies only to have the vaults fill up again a few years later as the new Peace dollars were produced far in excess of any need. In 1921 San Francisco, Denver Philadelphia and New Orleans all had stockpiles of dollars although sometime in the late 1920s the dollars from New Orleans would be shipped to Washington to take a place with and in front of many of the Carson City dollars already sitting in the vault.
After that point in time if you are looking for a reliable pattern you are unlikely to find one. The dollars were scattered around the country but with improved transportation they could easily be shipped from one place to another. We know that one place of destination for many was Nevada as the gaming industry especially with no gold coins allowed after 1933 needed more silver dollars than most areas of the country.
We have some insight into the situation simply because of the Redfield Hoard, which involved hundreds of thousands of silver dollars supplied by Reno area banks to LaVere Redfield, who was cheerfully hoarding them in his basement. The Redfield hoard showed both Peace and Morgan dollars with many coming from San Francisco as might be expected.
It was natural that Peace dollars in whatever vault where they were sitting would be the first to be paid out as they were the last to be produced and there is some evidence of that fact as virtually every Peace dollar was known to have existed in bag form with the possible exception of the first, the 1921. In fact, there are reports that the 1921 also appeared in the casinos of Nevada but like the other reports of Peace dollars except for the Redfield Hoard the bulk of the reports tend to be older dating back to perhaps the 1940s and early 1950s and at that time the numismatic interest in silver dollars and especially $1,000 bags of silver dollars was limited to basically Carson City dollar dates or dates many suspected had been totally destroyed in the Pittman Act melting like the 1903-O. The major exceptions were the early dates that had large mintages as there were still bags of a date like the 1922 coming out of the Treasury in the 1960s.
With hundreds of millions of dollars floating around and no one bothering to see what coins might be in the bags there were some surprises and some significant losses. In his book American Coins Treasures and Hoards Q. David Bowers lends support to a classic photograph which is one of few inside the Treasury vaults showing bags of dollars. In the front of the photo there are bags on which can be read Lafayette and Bowers confirms that there were some 14,000 Lafayette commemorative dollars at one time. They had been returned from the initial production. The fate of the 14,000, however, was melting, which Bowers suggests took place in 1945, at which time the Lafayette dollars according to Bowers, “could have been sold at 10 times face value or more.”
There were other surprises as well with one that has been debated over the years. This is the number of Seated Liberty dollars held. In fact, there were some. Bowers suggests that he personally went through many of the estimated more than 10,000 circulated Seated Liberty dollars that emerged from the Treasury. Bowers observed, “I recall no Mint State coins at all, nor any extremely worn ones. There were no great rarities such as 1851 or 1852, but there were a number of scarcer dates such as 1844, 1848 and 1870-CC.
The real dispute has been uncirculated Seated Liberty dollars and the suggestion many times has been that the two higher mintage Philadelphia dates, the 1871 and 1872, were found in the case of a few bags. In fact, there is no evidence in the market today to suggest that the two are available in quantity.
In his research, however, Bowers has reached the conclusion that there might have been perhaps a bag of the 1859-O and maybe a few of the 1860-O, although the coins in the bags were heavily bagmarked and abraided. There seems to be support in numbers today especially of the 1860-O that there might have been a surprise supply from somewhere and the Treasury vault is likely to be the source of that supply.
In his research Bowers has also found the reason or at least a likely reason why so many of the coins emerging from the Treasury bags had problems despite the fact that the bags were basically of only Mint State coins. In his The Official Red Book Of Morgan Silver Dollars he reprints an 1894 article that ran in The Numismatist describing a counting machine used at the time to conduct inventories. The machine was described with some precision. It consisted “of a hopper, into which the coins are dropped. A cogwheel, the teeth of which resemble those of a circular saw, carries the coins to the tubes, and from there they are forced out upon a little table, containing 20 grooves each holding 50 coins. A turn of the crank counts 1,000 coins which are immediately put into a bag.”
The image of something resembling a circular saw picking up and unceremoniously dumping silver dollars is enough to give anyone nightmares if they love high grade dollars. It also helps to explain why despite the fact that when numismatic interest became much higher in the dollars in the late 1950s there was still a great deal of cherry picking of the over $200 million still to be paid out. In fact, it can safely be suggested that while the Treasury holdings were enormous a large number of the coins were never saved and instead were probably sold for their silver value and melted in the late 1970s and early 1980s simply because in the vast wealth suddenly available choices had to be made and it is likely that coins damaged by that unfortunate counting machine or having other problems unless they were better dates were likely to have been sold for their silver value.
In every respect from the dates that were melted to the dates that were bagmarked the entire process was done without regard to what dates might be in the bags. There was no good way to predict what might happen to a specific date. In the case of bagmarks for example any date can have them as in addition to the infamous machine these were bags weighing over 60 pounds that were shipped around the country and the care was probably not what we might like. A couple Morgan dates for no apparent reason except that is how it turned out are infamous for bagmarks with the 1893-CC being one and the 1895-S being another. They are not from the same facility and would probably not have been shipped one place or another at the same time yet both today are noted for being heavily bagmarked.
It was also basically random in terms of what dates were left after the Pittman Act and which ones were not. The 1903-O is the poster child of the dates which surprised everyone by suddenly emerging in large numbers in the 1960s. By that time most had assumed the 1903-O had been destroyed and it was priced at roughly $1,500 in Mint State. Bowers noted he had never handled one. It was a great rarity one day and the next the numismatic grapevine was alive with the information that suddenly the 1903-O was being found and in quantity. The Mint State coin fell to $15.
If there is any pattern in terms of the dates that were hiding away in the vaults it would be that they were from New Orleans. The two other dates that were seen as tough if not rare in the early 1960s but which emerged by the thousands in the bags released were the 1898-O and 1904-O. In both cases they were not seen as being as rare as the 1903-O but both prior to the Treasury release would command large premiums as they were rarely seen especially in Mint State.
Apparently while some might have been melted under the terms of the Pittman Act there were bags and bags sitting in Treasury vaults. If anything it is possible that being moved to Washington in the late 1920s such New Orleans dates were unlikely to be shipped West to Nevada and other places where there was demand during the 1930s, 1940s and 1950s. If that had happened, they would have been known but being in Washington where there was little demand they simply never surfaced until the public rushed to get them in the 1960s.
Of course the pattern that there is no pattern rears its ugly head in the fact that while some of the biggest surprises in terms of large numbers being available being from New Orleans runs counter the fact that the one date that basically everyone agrees was never found in the Treasury holdings at least in the 1960s is also from New Orleans in the form of the 1895-O. Bowers states simply, “I have found no account or even a rumor of any being a part of the 1962-1964 Treasury release.”
The logical question is where would they have been released and the answer is basically anywhere. The 1895-O may be a little different as it was a small 450,000 mintage, so there were not that many to release and Bowers suspects that perhaps 100,000 were placed into circulation quickly. The latest there are any suggestions of any emerging from the Treasury is the early 1950s when there was not enough numismatic interest in silver dollars to produce any saving and even those reports suggest rolls not bags.
It can be a little frustrating to have dates just a few years apart in release from the same facility end up with very different situations today as the 1898-O is available while the 1895-O is not, but that is what happens when random events take control of the situation. It is just one of what are literally dozens of stories and sometimes questions still unanswered regarding what went on in the vaults of the Treasury over the years.
While we will never be able to report on every single date and the numbers melted and released, the Treasury holding remain the most important of all the Morgan dollar stories. That they also had a part in the story of Seated Liberty, Peace and even Lafayette dollars as well simply adds to the reputation of the greatest hoard of them all.