Collecting Morgan Silver Dollars

Morgan Silver Dollars are among the best loved and most collectible of all American coins. Their history is a fascinating one, which adds to their appeal.

In 1859, the Comstock Load from Virginia City, Nevada was made public. With a payload of more that $400 million worth of gold and silver, the discovery drove down the price of silver significantly.

In order to prop up the price of silver, the Bland-Allison Act of 1878 required the U.S. Treasury to purchase $2 to $4 million worth of silver bullion every month. The bullion would then be used to mint coins.

Named for the Chief Engraver of the U.S. Mint, George T. Morgan, the new silver dollar coin was designed by him. The design, which depicts the head of Lady Liberty on the obverse and an eagle on the reverse, is beautiful and is as popular today as when it was first issued.

Today, beginning collectors can find affordable Morgan Silver Dollars with which to begin collecting. And serious investors can pursue rare coins in the six figures.

By 1890, there was still a glut of silver, so the Hayes Administration passed the Sherman Silver Purchase Act, which required the government to buy $4.5 million of silver a month. Treasury Bills were issued that could be redeemed for gold or silver.

Holders of the T-bills redeemed their bonds for precious metals in such large numbers that government reserves of gold and silver were dramatically depleted, causing a financial panic. The 1893 repeal of the Sherman Silver Purchase Act caused the production of silver dollars to slow way down.

By 1904, the supply of bullion for silver dollars ran out and production ceased for fourteen years. The 1918 Pittman Act once again required silver to be melted down for the production of coins. Over 270 million coins were melted down.

In 1921, production of Morgan Silver dollars resumed briefly and 86 million coins were struck. But by the end of the year, the design of the new Peace Dollar was finalized and production of that coin began in December.

Yet another Silver Act, this one in 1942, required the melting of silver coins and millions of coins were converted to bullion. As many as eight out of ten Morgan Silver Dollars may have been melted down, which is why the value of these coins is no longer tied to the number produced. Even coins with an original issue of more than a million are valuable.

By the early 1960s, the U.S. Government had a surplus of silver dollars on hand. So they began selling Treasury Bags of a thousand coins for $1,000. Many rare coins were discovered in these lots, and collectors began buying up the bags.

Several coins that had not been circulated and were consequently rare -- such as the 1903-O uncirculated silver dollar -- resurfaced and their value plummeted.

The General Services Administration sold off the rest of the government's Morgan Silver Dollars, including coins minted in Carson City, in the early 1970s. Packaged in black plastic holders, these coins are known as GSAs and they are very collectible.

With only 100,000 business strikes, the Morgan Silver Dollar minted in San Francisco in 1893 was the lowest mintage produced. Today, an MS-67 grade coin is worth over $1 million. Other valuable coins are the 1893-O proof, the 1895-O and 1896-O MS67s, and almost anything minted in Carson City.
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