Counterfeit Morgan Silver Dollars 0

[RWB]

The subject of counterfeit silver dollars of various dates, but of similar characteristics is one of those “numismatic mysteries” that begs speculation and inventive explanations. Over the years I’ve been on the lookout for anything mentioning these coins or circumstances that might help understand them better.

The first economic factor in counterfeiting any silver coin is the cost of materials – in this case silver. The second is fabrication sufficient to allow unquestioned acceptance of the coin by merchants. Third is distribution by methods that do not attract attention by over-supply within a limited geographic area.

Obviously, the “popular” and once called “authentic” by notable coin authentication companies, are an ideal example of all three factors. Here are some thoughts and sample letters mentioning silver dollar counterfeits identified within the period of suspected manufacture.

The market price of fine silver (0.999) fell precipitously between 1892 and 1894, dropping from an annual average of 87-cent in 1892 to 63-cents in 1894; it never rose above 68-cents over the next 20 years. As can be seen from the FRB table a silver dollar coin was worth only about 50-cents in metal; or, $1.26 in silver could be used to make $2.00 in dollar coins. Almost any high-silver alloy would look like coin silver, and sterling scrap was available for the small cost of melting. Further, members will recall that XRF tests on some of the counterfeit dollars show predominantly Sterling silver alloy. Again, easily accessed sources of metal with no refining cost.

Fabrication was not as difficult as many would assume. Dies were made by careful electrotyping. This had been demonstrated in the 1880s by the Royal Mint’s creation of a two-headed Morgan dollar that U.S. Mint officers and Secret Service considered almost undetectable. In the late 1830s Franklin Peale and Joseph Saxton made virtually perfect copy dies from medals at the US Mint using the same technique. Blanks could be cut from rolled metal, adjusted by file, and stamped using a simple drop forge. Pieces thus made would have a normal metallic ring. Manufacturing technology of the 1890s made this both feasible and practical.

With a tidy 63% gross margin the ideal distribution areas were the Mississippi Valley and Southern states – places were silver dollars were common and local populations less likely to question the fakes – especially good looking ones. If the counterfeits were initially a bit rough, a few minutes of tumbling with dirt would take the “edge” off.

The two letters below reveal the possible detection of counterfeit Morgan dollars by 1896 and their wide distribution just a few months later. This implies distribution beginning at least in early 1896. In any case, hope members find this little essay interesting and possibly informative.

 

Edited November 25, 2019 by RWB

[RWB]

Sorry for the sloppy post - the SW interface does not seem to like me.  :)

[kbbpll]

Interesting that the rumor was that dies were made in England, shipped to China, to make dollars out of Mexican coins. The Chinese have been at it for a long time! (Presuming the rumor was accurate, of course). And if the rumor was "a few years ago" in 1896, it implies the early 1890s. The micro-O fakes to my knowledge extend to 1902-O, so they may have been faking these for 10 years or more.

Here's an article on the subject. I wonder how many more might be lurking. https://www.coinworld.com/news/precious-metals/specialist-identify-counterfeit-1900-o-cc-morgan-dollar-with-links-to-micro-o-fakes.html

I got a kick out of this quote:

"...in August 2005, Professional Coin Grading Service announced it would no longer grade the 1896-O, 1900-O, and 1902-O Micro O dollars after they were determined to be “contemporary counterfeits,” pieces made when the United States Mint was striking real silver dollars. In reaction to PCGS’s August 2005 announcement, Numismatic Guaranty Corp. officials stated that NGC had been aware of the nature of the Micro O varieties of 1896-O, 1900-O, and 1902-O Morgan dollars “for the better part of five years,” and that it had long refused to authenticate them as genuine."

Oh snap!

[Just Bob]

Now I really want to know if the two coins mentioned in the letter were actually fakes.

[RWB]

2 hours ago, Just Bob said:

Now I really want to know if the two coins mentioned in the letter were actually fakes.

I've not located the follow-up correspondence -- yet!

[Conder101]

Back when the Micro O fakes first became news some on posted a article from a newspaper or magazine from the late 1890s that warned of counterfeit dollar coins and it specifically stated that they carried a "lowercase O" for the mintmark.

Roger spoke of the low price of silver in the 20 year period from 1894 to 1914, but it dropped much lower later in the 20th century reaching a low of around 25 cents per ounce.  At that rate a silver dollar only had around 18 cents worth of silver.  Counterfeiting silver coins with the proper metal content would definitely have been profitable.