This is probably common knowledge but it isn't for me..... We stopped striking dollars in 1904 but resumed in 1921 when we were about to embark upon the highly stylized Peace dollar. And as i understand, all the Morgan dies were destroyed in 1904. So why then did we recreate dies to strike Morgans again in 1921, the same year that we introduced Peace dollars?
I have wondered about this situation also. Some of it make no sense to me, but here's what I know of the history, in a "Readers' Digest" version. The Sherman Silver Purchase Act required the government to buy 4.5 million ounces of silver every month, which would back issues of paper money. Unfortunately, the paper money could be redeemed in either gold or silver. Since gold was worth a lot more than silver, using the 16 to 1 assumption, the redemptions seriously depleted the United States Government gold supply. At a time when the world's currencies were valued in gold, this was a crisis. In the end the agreement was, the government would make silver dollars until its stock of silver ran out, without more purchases. That caused the silver dollar production to end in 1904. In 1918 the British Government badly needed silver for use in India. The Pittman Act called for the melting of about half the silver dollars the government had on hand. The silver was sold to England. The policy was that more silver dollars were needed to back the currency in circulation. Therefore the 1921 dollars were made. The tools to make the Morgan Dollars had been destroyed circa 1908. The 1921 Morgan Dollars were a rush job, and it showed. George Morgan used an existing Morgan Dollar, a bit like a counterfeiter, to make the dies. My question as always been, why didn't the government buy silver on the open market rather than melting many millions of "obsolete" silver dollars in 1918 only to make new ones in 1921? I've been told that is a silly question. I have this MS-61 Morgan in my collection to mark these events.
This was just another wasteful move by our government by people that do not have a full understanding of what they are doing. As someone here recently said they are the governament and can do what they want regardless of the consequences. I will say I have always wondered if anyone made a few million when our nation did this.
During the latter half of the 19th and early 20th centuries, the silver mine owners made a fortune. The government bought up their excess product and supported the prices. The knitwits thought they would benefit from inflation created by increases in the money supply. If they did, the benefit was transitory. They might have paid off their loans with cheaper dollars, but they still had eat and have a roof over their heads. They also had to run their farms and other businesses at higher expenses which may not have been covered by higher crop prices.
Bowers via the PCGS blurb specifies 1910. Here is a list of the hubs and dies destroyed May 24 and 25, 1910, which I dug up doing research on something else years ago. My recollection was that this destruction was the result of a scandal involving a mint director producing restrikes for his pal. Director A. Piatt Andrew decided to put an end to that once and for all, and ordered the destruction of everything that wasn't current issue. The result was the supposedly crappy 1921 design. I don't know the history of the Peace dollar in relation to this, but it's curious why they would go to the trouble of recreating the Morgan when they could have just waited for the Peace. What was the hurry in 1921? (Edit - it's Piatt, not Platt)
@KBBPLL, given need to back the paper in circulation explains the rush to make millions of silver dollars in 1921.
I wonder if that was legislated or actual demand. Anecdotally, my only Morgan is a 1921 from my grandfather or grandmother, pulled from circulation. If there was a rush to swap your silver certificates for physical silver, it seems like the grandparents would have had more of them, and in better condition. Maybe it was only the theory of having the currency physically backed by silver. Many millions of them sat in vaults for decades, so I suppose it's clear that making them wasn't due to any real demand.
So long as people have confidence in the paper money in circulation, they won’t convert to silver or gold. The silver dollar is a heavy, inconvenient coin. It has never been popular except in the western states where hard money had more of a foothold. The people did know that the silver was there.
I'm fascinated by this stuff. Did the government ever actually have $1 in silver coins for every $1 in silver certificates, or was it mostly a ruse to instill confidence? The market price of silver during 1921 was 63 cents an ounce. Surely many people knew this. Why would anybody care that physical metal that was worth a third less than the paper was backing the paper?
Many people are not as well informed or savvy as you might think. All they know is that “It’s hard money,” even if it doesn’t melt for the value of a dollar.
These are screenshots of the 1967 Red Book regarding dollars (I randomly picked this year. The 2015 Red Book I have is similar but has been re-written in parts. I will not do a comparison because I'm a fat lazy potato shaped dog). I might read it all someday. I hope it is relevant to this thread.
Idk but in my opinion the 1921 Morgan Dollar looks fake when compared to previous years of Morgan dollar due to the slight redesign. Probably my best example: The 1921 Peace dollar hits different. One of my favorite coins I own:
In a manner of speaking, it should. The models having long been destroyed, a coin was more or less copied to make the model for 1921 while a new design was legislated, developed, and chosen. Peace dollar dies weren't ready until late December 1921.
JohnMilton had most of the pieces to the puzzle. The key parts are: One the original 1878 and 1890 silver purchase acts were a sop to the mining interests to support the price of silver. Two, the Pittman act required that all the silver dollars melted down had to be replaced using newly mined domestic silver. I believe purchased at $1 per oz. which was well above the market price. So this was another sop to the mining interests (the government wouldn't lose anything because they sold the silver from the melted dollars to the British for $1 per oz. plus an additional charge to cover the cost of coining the replacement dollars.) After the war ended in 1918 they could have started making the replacement dollars but there was an idea floating around to have the new dollars commemorate the peace after the "war to end all wars". But the peace was slow in coming and the economy was suffering from the withdrawal of 250 million dollars worth of silver certificates from circulation that no longer had silver dollars in the vault backing them. By 1921 they just couldn't wait for the peace any longer and they started coining Morgan dollars again (and issuing silver certificates). Then in late November the Peace Treaty was finally signed. The Mint now had to scramble to try to get a design and start production of the new Peace dollars before the end of the year. They wanted the Peace dollar to come out in the same year the peace was declared. They barely made it. Peace dollar production started December 28th and they managed to get a million coins made in the next four days. Yes, but not just silver coins all three pieces of legislation (Bland-Allison Act, Sherman Silver Purchase Act, and the Pittman Act) required the purchased silver to be coined into dollars for use in backing silver certificates. They couldn't use other silver coins or just the silver bullion itself. In 1928 when all of the dollars melted under the pitman act had been replaced Peace dollar production stopped. It started again in 1934 after another silver purchase legislation was passed that once again specified that the purchased silver be made into dollars coins. Finally in 1936 new legislation was passed that allowed the silver certificates to just be backed by the purchased bullion and they no longer had to go to the trouble of coining it. Probably because the British needed the silver NOW! and 200+ million oz. of silver just wasn't available on the open market. Not to mention what suddenly trying to buy 200 million oz. at one time would have done to the market price. But they did have that silver in the Treasury vaults in the form of silver dollars.
So they say. As far as I know, the presses could coin dollars at 80 per minute. Perhaps this number is wrong for 1921, but that was the rate in 1878. A million coins is about 208 press-hours of minting. Running non-stop 12 hours a day, you'd need 17.3 days to make a million dollars on a single press. You could do it in 4 with 5 presses. Not sure they had that many making dollars, but maybe they did. Then there's down-time for changing dies, which they had to do far more often than with the Morgan dollars, as they were only averaging 25,000 coins per die pair with the high relief design. 250,000 coins a day is pretty amazing if the number is correct and they were all minted in 1921. And now they're in the form of 1919-(C) Indian Rupees.
If you zoom in on this chart https://fred.stlouisfed.org/series/CURRCIR for 1920-1940, and the numbers are accurate, removing $250m from circulation was around 5% of the $5.3b total currency in circulation. By mid-1922 when it bottoms out, there was 23% less currency in circulation than the 1921 peak. It ramps up again through 1923 and is relatively stable for the rest of the decade. I don't know how the numbers are calculated but I thought the graph was interesting in relation to this discussion. Another interesting thing, if my math and sources are correct, is that there are more US dollars in circulation today than the value of all the silver ever mined, worldwide. Looking back, it doesn't seem like this insistence on having silver backing every dollar in circulation was going to be physically possible in the long term.
Post WW1, British mining collapsed, causing their need for silver. A combination of war, greed & mismanagement. They even had to cut back to 50% silver from traditional 92.5% coinage.
