Whatever happened to all the Silver Dollars?

Gresham's Law!!

But we'll get into that later.

Do you know America's most collectible coin?

This is it, the Morgan Silver Dollar.

One Hundred Morgan Silver Dollars in a box.

When I was 12 years old and shoveling driveways and mowing lawns for a dollar an hour, my goal was to accumulate $100 dollars. That represented an enormous amount of wealth to me and seemed a worthy goal. The picture of 100 Morgan Silver Dollars above represents that ambition. 

What is a Morgan Dollar?

Minted by the US Treasury from 1878 to 1904 and again in 1921, they came about due to the Bland-Allison Act of 1878 during the Rutherford B. Hayes administration. Hundreds of millions of these coins were struck in five different mints: Philadelphia, New Orleans, Denver, San Francisco and most famously, Carson City in Nevada. Most languished for years in canvas bags, never leaving the mint and eventually, due to the Pittman Act of 1918, 270,000,000 were melted, or half of the total mintage.   The War Time Silver Act of 1942 melted even more Morgans, thus aiding considerably to the coins scarcity. So, how many Morgan Dollars exist today? Due to lost mint records, mass melting's and general usage no one really knows, but one leading authentication service estimates that it has seen more than 1.4 million of these highly collectible coins.

Designed by Englishman, George T. Morgan in 1878, and acclaimed as one of the most beautiful coins ever minted, it's composed of 90% silver and 10% copper, giving it a total silver content of 0.77344 troy ounces. Or more simply, it contains a little more than 3/4's of an ounce of silver. These are not the only silver dollars produced by the mint, but certainly the most recognized and collected.

Obverse on the left and Reverse on the right of these (BU) brilliant uncirculated examples.

This is an 1889 Morgan. You undoubtedly know heads from tails, but coin collectors refer to the front as the obverse and the back as the reverse. It's a beautifully detailed, hefty coin and when flipped into the air by your thumb nail, it "rings." Try this with a current "clad" coin and it "thuds." If you look closely beneath Miss Liberties neck you'll discover a tiny "M" that indicates the engraver, Mr. Morgan. This was a highly controversial issue within the Mint at the time. On the reverse below the tail feathers is where you'll locate the "mint mark" or where the coin was struck. There is no mark here which indicates it was struck in Philadelphia. An O represents New Orleans, an S San Francisco a D Denver and the highly coveted CC is Carson City. 

Want to know more about this beautiful, highly collectible U.S. coin? Then you should probably purchase this book, MORGAN SILVER DOLLARS by Q. David Bowers from Wolfeboro, New Hampshire. Really, he's from New Hampshire! And no, I don't know him. Mr. Bowers writes in great detail about its history, production, design and investment analysis. He'll teach you about scarcity, rarity, condition, mintage and all the factors that determine value. Though equally beautiful, not all Morgan Silver Dollars are created equal from an investment viewpoint. 

I equate learning about, searching for and negotiating for Morgan Silver Dollars the same as I learn about, search for and negotiate for early American furniture. Both represent value, beauty and long term investment. 

On the left is an 1884 Morgan in fair condition valued probably at $30.00 or so. To the right is an 1888, very highly worn example in poor condition that I'd estimate at $25.00. Both of these coins in a "proof state" would be valued between $3,000 to $4,000.

The reverse of the two coins above.

A 1921, a Morgan in uncirculated condition vs our 1888 well worn example. Although the 1921 is in very nice condition, it's the last year they were minted and more than 2 million were struck and only in Philadelphia. Even the uncirculated specimens have dings and marks that are called bag marks. They occurred while large canvas bags of coins were moved about causing abrasions. Even the least expensive, common date, "almost uncirculated" Morgan with nice brilliance sells in a good coin shop for $50 to $75 today.

What makes a Morgan valuable? A combination of factors like; date, mintmark and condition. For example, an 1889 CC in excellent condition is worth in the neighborhood of $300,000. I'll have to go through my little box and see if I have any.

As a contrast here's an example of a U.S. Peace Dollar minted from 1921 to 1928 and then again in 1934 and 1935. It has the same specs as the Morgan but has failed to capture the imagination of collectors and demands far less money. 

Morgans are generally accepted as numismatic coins, meaning that they have collectors value on top of their "bullion" or silver melt value. There are many on line coin shops where you can go to learn the values of these coins, such as Littleton Coin in Littleton, NH. I don't know these folks either.

Here's the formula though to determine the silver value of a silver dollar. 

Today's Silver Price X .03215 X 26.73 X .90 = Silver value

Silver today is $20 so the formula would look like this.

20 X .03215 X 26.73 X .90 = $15.46

To watch live gold and silver prices click over to BULLION DESK.

To watch gold and silver trends click over to KITCO.

What about this Gresham's Law. It's an economic axiom that in the vernacular argues, "cheap stuff forces good stuff off the market." Remember when our daily change/coinage was made from silver? Silver halves, quarters and dimes were common, plentiful and all that we knew. In 1965 the Treasury Department during Lyndon Johnson's administration, debased our coinage and created today's "clad" coins. The silver was replaced with a cheaper alloy of copper and nickel. Consequently these coins lacked intrinsic value and when you stumbled across a silver dime or quarter you'd bring it home and put it in a jar with others because it was intrinsically valuable. It wasn't just you, everyone did this and in no time our beautiful, artistic silver coins became a memory. In other words, the inferior or clad-coins drove the valuable coins off the market and into your jar.

 This picture represents "Junk Silver" or pre 1965 U.S. coinage. 1942 Walking Liberty half dollar, 1958 Franklin half dollar, 1964 JFK half dollar, 1928 Standing Liberty quarter, 1964 Washington quarter, 1935 Mercury dime and a 1963 Roosevelt dime. All of these coins were in common circulation until 1965. This little $2.20 pile of coins equals 1.57 ounces of silver that equals $31.40 today in silver value. (11/27/13 silver = $20.00 per ounce)

Here are four "Washington" quarters on edge. Would you venture a guess as to which are silver and which are clad? 

Today, these pre '65 silver coins are called "junk silver" and you'll pay dearly at a coin shop to purchase them. One dollar of junk silver face, which means, any combination of silver change that adds up to a dollar equals .715 ounces of silver or $14.30 at todays silver price. So $100 face value of real silver change equals 71.5 ounces of silver and 71.5 ounces of silver equals $1,430 in today's currency. A quick check of the Provident website indicates that they're selling $100 face of junk silver for $1,563.

To better emphasize my point, would you rather have handed to you a crisp, clean, new, $100 bill or $100 dollars in pre 1965 U.S. silver coins? I hope  that you opted for the coins, because the difference is worth $1,330 at today's silver price.

Often I'm asked, "what is your box of 100 Morgans worth?" In today's market I "value" them at $50 to $60 a piece, but the real answer is, they're "worth" whatever someone will pay for them. Have you ever watched Wayne Carini from Chasing Class Cars take a rare automobile to a high-end auction like Pebble Beach? He sets out with a number in mind and might say that he expects it to sell for $100,000, only to see it fetch $75,000 on the auction block. On that day at that location it was worth $75,000 as determined by a sea of free market bidders, seeking quality with a finite number of dollars. Free market capitalism at its best.

If you live anywhere near Nashua, NH and you're interested in numismatics, you might consider attending the Nashua Coin Show. It occurs the third Sunday of each month and attracts vast crowds of buyers and sellers.

Happy collecting! What ever it is that you value.

Rand