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Many factors influenced 1850 silver dollar supply

A small mintage, lack of contemporary interest, the Gold Rush, threat of melting, and exportation overseas are factors that led to the limited supply of 1850 Seated Liberty dollars available today.

The 1850 Seated Liberty dollar is definitely a better date, which in the case of this series says a great deal. There are virtually no Seated Liberty dollars that can be called available or common. Even so, the 1850 is probably still better than its current price, and even if not, it’s a coin with an interesting story.

The Seated Liberty dollar had most of its limited success in the 1840s – limited because the American people were apparently not the least bit interested in silver dollars. This lack of interest was probably encouraged at least in part by the fact that, from 1804 until 1840, there had been no regular silver dollars produced for circulation. When something is not available, you learn how to get by with something else, and the American people had learned to get by without silver dollars.

This situation certainly had an impact when silver dollars returned, since there was basically no demand for them. The small mintages of the 1840s sat in vaults as reserves being paid out periodically for use as Christmas or birthday gifts. There was little if any real use in terms of commerce.

The discovery of gold in California made the silver dollar even less important. Gold dollars were produced in large numbers and were apparently popular. In addition, all that gold upset the traditional gold-to-silver ratio. It suddenly cost more than the face value of silver coins to produce them. From the Mint’s point of view, that was a disaster, and it got worse as the public started hoarding silver coins.

Congress was called in, but that was anything but helpful. Instead of reducing the amount of silver needed, it instead authorized a 75 percent silver three-cent piece. This meant the one silver coin that could circulate was the new three cents.

The Mint was stuck. If it produced more coins, it simply lost more money, and the coins would not circulate because they would be hoarded almost immediately. However, if it did nothing, it could be faulted for doing so at the time of a national coin shortage.

What appears to have been the solution, at least in the case of silver dollars, was to greatly reduce mintages. That was first seen in the case of the 1850, which had a mintage of just 7,500. Seated Liberty dollar totals had never been very high, but the lowest prior mintage had been the 1848 at 15,000, or more than double that of the 1850.

The issue goes beyond the mintage, however. The question is, what would have happened to the 1850 at the time? Remember, the Mint was not very interested in even releasing coins because they would only be hoarded. If hoarded, there was a real possibility that any silver coin would end up melted.

Melting was also a real possibility for coins kept in the vault, although that potential was greater for other denominations that had the amount of silver reduced in 1853. However, it was also not unusual to ship silver dollars overseas. Already small mintages were reduced even further through melting or export.

Today, at $500 in G4 condition and $4,400 in MS60, the 1850 does command premium prices. But there is little doubt that these prices would be higher if demand were greater.

Numismatic Guaranty Corporation reports having graded a total of 122 examples of the 1850. Of those, 39 were called Mint State, primarily below MS63. The Professional Coin Grading Service reports a total of 213 examples graded, with 38 called Mint State. Echoing NGC, however, the Mint State coins were lower MS grades, with none topping MS64.

Although the totals sound large, it has to be remembered that some of the coins may have been submitted more than once. Also, a few hundred examples of any silver dollar is just a drop in the bucket when it comes to demand, which runs much higher than for many other denominations.

As its low mintage and limited saving do not leave much of a supply, any increase in demand would cause the 1850 Seated Liberty dollar to quickly jump in price.

 

This article was originally printed in Numismatic News. >> Subscribe today.

 


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