Start of Morgan dollars not as smooth as hoped 0

[RWB]

Initial production of new Standard Silver Dollars in 1878 did not get off to as smooth a start as Mint Director Linderman had hoped. Silver brokers and miners in Western states and territories saw a bonanza in government money awaiting them, and insisted on higher prices and double shipping expenses. Treasury and Linderman were will to pay only the London market price, as commonly used elsewhere. The result was a temporary shortage of silver bullion, and pressure on individual mints.

The following letter is typical of many sent to the Mints about the silver situation. At Carson, by the end of 1878 there was little silver available and this led to 1879-CC's low mintage.

Jas. Crawford, Esq.

Supt. U. S. Mint

Carson, Nev.

 July 5th, 1878.

 Sir,

The Secretary of the Treasury has decided, in a general order, that silver bullion will be purchased at the different mints, at a price not exceeding the London rate, computed on the basis of sterling exchange in New York on the day of sale, payable in silver dollars.

Whilst you will no doubt be able to purchase some small lots of silver on these terms and pay for the same at the counter of the mint, it is doubtful whether any large lots can be purchased on the same terms, unless payment be made in San Francisco, and it may be that sellers will insist on receiving in addition to the equivalent of the London rate, the cost of transportation of silver from San Francisco to your mint especially if the silver be fine bars purchased in the San Francisco Market.

As we do not know the terms which holders will ask for silver to be delivered at your mint, it does not appear worth while to decide the question of the cost of transportation in advance.

If you should at any time, be able to secure an offer for any considerable amount of silver in San Francisco deliverable at your Mint at the equivalent of the London rate, the Mint to pay the cost of transportation to Carson, and payment in silver dollars to be made in San Francisco, you will please communicate the same to this Office in order that the instructions of the Secretary may be taken.

Unless we can procure a reasonable supply of silver for coinage at your Mint, your working force will have to be materially reduced.

It will be well for you to confer with the holders and producers of bullion as early as may be practicable, reporting the result to this Office.

Edited December 23, 2023 by RWB