Were US silver dollars used in commerce?

[joes2001]

Whenever I see silver dollars for sale, usually they're uncirculated or AU. I was wondering if Morgan dollars and Peace dollars were actually used by people when they purchased stuff, or did they mostly sit in banks or in peoples' safes. I guess I'm looking for a shorter answer than having to research population numbers/census reports etc. I thought I've read that Morgan dollars were mostly unliked by people when they were issued. I'm curious about this because if they were mostly unused, then they would seem like American silver eagles today (most if not all are unc's). The only difference being that the ASE's are sold and bought depending on their precious metal content rather than their face value. And if this is the case--that silver dollars mostly didn't circulate--then I don't see why the demand for them is at the level it is (obtaining lower denominations that actually circulated in high grades would seem far more popular). Thanks for your input

[WillieBoyd2]

They were used in Reno casinos in the early 1960's and even appear

in a 1961 "Route 66" televison show episode titled "Eleven The Hard Way".

(On my website under "Coins on Television")

 

One of my friends who grew up in Montana said that they were routinely

used in commerce until around 1964.

 

I spent ten of them before Christmas of 1964 on presents.

 

[GoldFinger1969]

They were overproduced, a political payoff to Western silver interests (remember William Jennings Bryan and gold crosses )? Hundreds of millions were minted, and tens of millions rarely or never circulated. They went straight from the mint to bank vaults.

 

In the 1960's and 1970's the U.S. government sold hundreds of thousands each month to the public. Most were AU or MS quality.

[CaptHenway]

They were used in commerce in the West up until 1964. I used to play cards with a guy who had been in the Air Force in the early 60's stationed somewhere in Wyoming or Montana. Because he knew I was a coin collector we talked about silver dollars one night. He said that if he went into a bar and bought his first drink with a $5 bill, he would get four silver dollars in his change. He also said there were gas stations where at night you could pull up to a pump and drop a silver dollar in a slot and get a dollar's worth of gas.

 

Not at all back East. Around the same time I was a kid collecting in Detroit. I had a few friendly bank tellers who would save them for me if one came in over the counter, but my Dad had a bread route with a cigar box full of change that I used to go through and he never took in a silver dollar.

 

BTW, the reason that you see so many AU-Unc coins is that in 1962-64 the Treasury Dept. paid out a lot of original bags to people who were looking for rare dates, like the 1903-O that came out in 1962. People who got common bags just dumped them and went back for more. When people started hoarding any dollar after the Treasury ran out in 1964, these coins were still in new or near-new condition.

 

 

[joes2001]

Thanks for the replies. I was aware of the GSA holders and the sealed lower grade dollars (peace only?) that sometimes pop up on ebay or somewhere else. I can't imagine collecting coins before 1965. That would be awesome to look through silver coinage for rare dates. Can't experience that anymore.

[jpcienkus]

You can't compare the ASE to the Morgan. It's not Apples to Apples. ASE's were created as a way for the mint to sell silver.

 

Funny that Morgans, due the the Bland Allison Act, were a way for the U.S. Gov't to buy silver. Most Morgans went to storage, partly due to the sheer volume being minted and partly due to most of the population favoring paper money in that denomination. My understanding is the western and southern states was the prime regions where the Morgan was used in day to day commerce.

[orifdoc]

As others have said, they were used quite frequently in the West. My dad had a paper route in Idaho when he was a kid. He remembers getting so many on collection day that it was hard to keep his pants up. He hated the things.

[DWLange]

My mother griped to me about when she used to get silver dollars in change from the grocery store in the 1950s. That was in San Francisco and nearby Daly City.

[cpm9ball]

I believe this was posted here several years ago.....

 

[RWB]

From the standard silver dollar's reintroduction in 1878 to the 1950s, the Treasury Department tried to push them into circulation. But nothing worked on a national scale.

[Conder101]

He said that if he went into a bar and bought his first drink with a $5 bill, he would get four silver dollars in his change.

Good marketing. The person would be reluctant to carry around the heavy dollars and would be more likely to use them to buy more drinks.

 

ASE's were created as a way for the mint to sell silver.

 

Funny that Morgans, due the the Bland Allison Act, were a way for the U.S. Gov't to buy silver.

I hadn't really considered those two together. Create one silver dollar buying up all the silver, and then create another silver dollar to get rid of all the silver. (After unsuccessful GSA auctions, the ASE was created to get rid of the governments strategic stockpile of silver. Since the stockpile was depleted around 1998 the government has had to go out on the open market to buy silver to make the ASE's. So once again the government is providing price support for the silver market.)

[TonerGuy]

LIke today US coins were used in other countries as well.

 

My grandfather was in the Merchant Marines and in the 1930s he would go through the Panama Canal and they were in use there.

 

He pulled numerous Morgans from circulation in Panama from the 1800s and kept them.

 

Those were the first coins I was given as a child - and which started my interest in numismatics. I still have his collection.

[Conder101]

My grandfather was in the Merchant Marines and in the 1930s he would go through the Panama Canal and they were in use there.

The Canal zone was for all practical purposes US Territory. US currency was used in the Canal Zone and Panamanian money was used outside the zone. There was probably some overlap like we have with the Canadian coins that circulate some in the northern US.

[joes2001]

Interesting input. Thanks everyone. By the way, what are those coins on the wall in that bar? Are they actually silver? Or clad? That is a lot of coins, whatever they are.

[MarkW]

That bar is Lincoln's 50,000 Silver Dollar Bar in Haugan, MT. Over 50,000 real silver dollars adorn the walls and bar top. 2500 in the bar top alone.

link http://www.50000silverdollar.com/

[BillJones]

It was my understanding that silver dollars were also popular in some parts of the South. African-Americans liked them because they were "hard money" and therefore more trustworthy than paper dollars.

 

I am sure that there are still dealers' stocks of well circulated silver dollars. When JJ Teaparty had a street level store in Boston, I once went though their stock of circulated ("junk box") silver dollars in an effort to build a circulated set for a customer. They had at least 500 to 600 pieces on hand and probably more that were not at the store.

 

I was able to fill most of the holes in the set from Teaparty and other sources from "junk boxes" The exceptions of the better dates, especially in the early 1890s. The 1885-CC dollar is also quite scarce in the circulated grades. Most of the survivors are Mint State.

 

 

With respect to silver dollar legislation, the Bland - Allison Act of 1878 required the Federal Government to buy from two to four million dollars worth of silver every month and coin it into silver dollars. Some of those coins went into circulation, almost all in the western states and some in the southern states. Easterners didn't like them, so the vast majority of those dollars were stored in government vaults. The Pittman Act of 1918 resulted in the melting of about half of them.

 

The Sherman Purchase Act of 1890 provided the purchased a fixed number of ounces of silver every month and for the issuance of paper money that could be redeemed in gold or silver. It provided a way for people to convert their less desirable silver into more desirable gold with disastrous results. Some much gold was taken from the U.S. Treasury that there was not enough to back our nation's monetary system. At a time when the industrialized world was on the Gold Standard, this created a genuine crisis for the U.S.

 

William Jennings Bryan and his "Cross of Gold" speech came at the end of the free silver movement. Others like Nevada senator Richard Bland had been fighting the gold battle for years.. Bland was the front runner for the Donkey Party presidential nomination in 1896 until Bryan got up and made his speech. Here is a "hopeful" button that was issued for Bland before or during the 1896 Donkey Party convention.

 

[johnny9434]

I believe this was posted here several years ago.....

 

coool

[CaptHenway]

It was my understanding that silver dollars were also popular in some parts of the South. African-Americans liked them because they were "hard money" and therefore more trustworthy than paper dollars.

 

 

The fact that Confederate paper money became worthless at the end of the Civil War may explain why some people in the South preferred silver dollars over paper dollars.

[GoldFinger1969]

I hadn't really considered those two together. Create one silver dollar buying up all the silver, and then create another silver dollar to get rid of all the silver. (After unsuccessful GSA auctions, the ASE was created to get rid of the governments strategic stockpile of silver. Since the stockpile was depleted around 1998 the government has had to go out on the open market to buy silver to make the ASE's. So once again the government is providing price support for the silver market.)

 

Not really....changes in end-user demand and other sources of supply (i.e., end of silver in photographic film) have also influenced the price.

 

Silver never really beat her 1980 high in price whereas gold more than doubled it.

[GoldFinger1969]

The Sherman Purchase Act of 1890 provided the purchased a fixed number of ounces of silver every month and for the issuance of paper money that could be redeemed in gold or silver. It provided a way for people to convert their less desirable silver into more desirable gold with disastrous results. Some much gold was taken from the U.S. Treasury that there was not enough to back our nation's monetary system. At a time when the industrialized world was on the Gold Standard, this created a genuine crisis for the U.S.

 

When was there a crisis caused by an actual shortage of gold ?

[RWB]

Not a shortage...an imbalance cause by stupid legislation. Devalued silver could be used to buy full-value gold, then the gold was used to buy more depreciated silver and the cycle repeated. Each cycle, the speculator got more gold to the point where Treasury reserves were low and the public panicked.

[GoldFinger1969]

Not a shortage...an imbalance cause by stupid legislation. Devalued silver could be used to buy full-value gold, then the gold was used to buy more depreciated silver and the cycle repeated. Each cycle, the speculator got more gold to the point where Treasury reserves were low and the public panicked.

 

My understanding of pre-Fed (1914) economic 'panics' is that they were not tied to silver or direct gold fluctuations.

[RWB]

They were usually started by institutional faiures due to greed....not a lot different from the Bush era depression when "banks" engaged in high risk practices and lax oversight -- one contribting factor was the short-term non-thinking common in MBA schools. (Ask Warren Buffet...)

[DaveG]

GoldFinger1969,

 

You might appreciate reading pages 148-154 of QDB's Red Book of Double Eagles.

[GoldFinger1969]

They were usually started by institutional faiures due to greed....not a lot different from the Bush era depression when "banks" engaged in high risk practices and lax oversight -- one contribting factor was the short-term non-thinking common in MBA schools. (Ask Warren Buffet...)

 

See that's my point....the practices weren't 'high-risk' in the 2000's, the problem was government stoking of housing combined with excessive leverage.

[GoldFinger1969]

GoldFinger1969,You might appreciate reading pages 148-154 of QDB's Red Book of Double Eagles.

Drat, only up to Page 101.

 

Glancing at it, it basically tries to ascribe the problems of 1895 to The Panic of 1893. But I still wonder about cause-and-effect.

 

But it does show what can happen when you don't have a central bank to provide liquidity at crucial moments and economic dislocations can only be affected by an internal devaluation.

 

 

[RWB]

"See that's my point....the practices weren't 'high-risk' in the 2000's,..."

 

I think you got it backwards. The practices were much higher risk than in earlier periods when there was tighter regulation that specifically limited high-risk behavior. Excessive leverage of RE was a major problem, but the underpinning was pervasive fraud by mortgage lenders in lying about credit worthiness of borrowers and the value of properties. The two major government underwriters were required to accept the originator's paperwork -- that was what Congress demanded.

 

BSing around it does not change the facts: merchant banks, mortgage originators and financial speculators (hedge and related) were to blame and have yet to pay for their malfeasance.

 

The public credit and 1930s New Deal banking reforms was used to protect the general public and prevent a financial collapse.

 

[Mr. Smith Guesser]

RWB, why did the government have a hard time putting them into circulation?

[DaveG]

You don't have to be RWB to answer that question!

 

Basically, "no one" wanted them.

 

By the time the Morgan dollar got going, currency was fully exchangeable into gold coin at face value, so if you were an employer, would you rather make your payroll in bills of various denominations or a whole bunch of really heavy dollar coins?

 

(For a modern-day comparison, think of Eisenhower dollars or SBAs or Sackies.)

[Mr. Smith Guesser]

I did think for a minute that maybe they didn't catch on because of their weight. But then thought, $1 was worth a whole lot more 100 years ago. So it's not like everyone would be walking around with a couple hundred dollars in their pocket.