The Morgan Dollars were the official US dollar coin created and struck by the US Mint from 1878 through to 1904 with a very short run again in 1921. The coins were named after the Mint’s assistant engraver, George T Morgan who was responsible for the design of the coin. On the obverse side of the coin was the bust image of Lady Liberty and on the reverse side was an American Eagle grasping an olive branch. The imagery of these coins are still strong in the minds of most Americans and they are considered classics.
The Morgan Dollars had a very checkered political life. Originally, the coins were minted under the Bland-Allison Act which ended the era of free coining of silver. Historically, large groups of the population of the United States were advocates of bimetallism and were proponents of this metal being pegged at a 16 to 1 ratio to gold (in troy ounces). The true price of silver was more like 32 to 1 and so this bimetallism policy would have had a strong inflationary impact on the economy. Prior to the Bland-Allison Act, the US mint would take any amount of silver brought to it and turn it into coins, thus increasing the money supply at a rate only constrained by the capacity to mine.
But just how much silver is in a silver dollar from this era? It works out at about 90% of the weight of the coin, with an additional 10% copper to add rigidity.
The Bland-Allison Act required the mint to buy between two and four million dollars of silver each month to be struck into coins. This floor and ceiling had the effect of keeping inflation through striking coins in check but it outraged the supporters of free silver. The main supporters were farmers in the south and the Midwest, along with miners of course. The established wealth in the Northeast of the United States was already firmly entrenched with gold and were not interested in out of control inflation.
In 1890 the Bland-Allison Act was repealed by the creation of the Sherman Silver Purchase Act which shifted the way that this metal was purchased from dollars to troy ounces. This removed the dollar constrictions from the Mint’s ability to purchase the precious metal and set the monthly acquisition for coinage at 4,500,000 troy ounces. The Sherman Silver Purchase Act however had a sting in the tail as it only required the mint to strike dollar coins for one more year.
The Sherman Silver Purchase Act was short lived as the US went through a recession from 1890 – 1893 and the free silver proponents were entirely defeated as the country moved to the Gold standard in 1893. A law was passed in 1898 that required all of the silver purchased by the mint to be struck into coins which was completed by 1904 as the mint had used it’s supplies. The Morgan Dollars were struck again for a very short run in 1921, but they were replaced eventually by the Peace Dollar design.
The Morgan Dollar coins were largely melted down and the metal re-used in the striking of the Peace Dollars. However in the 1960’s the US Mint found a large supply of uncirculated Morgan Dollar coins that they then sold into the market which reduced their value considerably. Most serious coin collectors would still want a few of these exceptional pieces in their collection, though.