The History of Coins in the US

The United States has an interesting political history when it comes to the striking of silver dollar coins. In the late 19th century, there was a political divide between the wealthy, established Northeast who favored the use of gold and controlled economic conditions versus the farmers and miners of the South and Southwest who believed in a system that pegged silver to gold at a ratio of 16 to 1 troy ounces. At the time, there was a “free silver” system in place where the US Mint would take all the silver brought to it, strike it into coins and return that to the owner.

This free policy was obviously hyperinflationary in nature and the limiting constraint on the silver based money supply was simply mining capacity. The established classes of the Northeast saw this as a threat because it would have meant increased prices for the burgeoning supply of products coming from the west particularly, but it also would have damaged the value of gold where they held most of their wealth. Yet again, there was the classic struggle of US history – the established North versus the determined South.

Starting in 1873, the US Government put in place a series of control measures to ensure that silver did not damage the position of gold in the economy. The Bland-Allison Act in 1873 put an end to silver owners having their holdings turned into coinage for free by the mint and put a floor and ceiling on what the Mint could acquire in terms of silver. The Act also authorized the creation of the Morgan Dollar coins. When you look at how much silver is in a silver dollar from that era, it is just over 24g which equated to about 90% of the weight of the coins produced.

Over the next twenty years, there would be changes to how the mint acquired this metal and turned it into coins, but the free lobbyists who were looking to solidify their bimetallism beliefs were flanked and outmaneuvered by their opponents in the North. Ultimate, following the recession from 1890 – 1893, the US Government formally moved to the gold standard and bimetallism died as a consequence.

Today, the US government still produces silver dollar coins. The American Eagle has been in production since 1986 and is a favorite of collectors around the world. At 99.9% purity and one troy ounce, the American Eagle is a coin that all collectors will want in their collection. The coin is the official bullion coin of the United States Government and has a face value of one dollar despite having a melt down value closer to $35 at present day prices. IRA holders can also use the “Silver Eagle” as a legitimate investment.

silver eagle coin

The initial discovery of silver in the United States in the 1850’s was almost an accident and largely a byproduct of the gold rush. Despite that, the metal became a huge part of the developing US economy in the late 19th century. Precious metals continue to be a part of the US Government’s official coinage to this day and investors continue to buy whatever stock is made available.

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