Of all the coins ever produced by the U.S. Mint, there is one series of coins
that is considered The King of Coins, and that series is the Morgan
Silver Dollar. The Morgan Dollars have been heavily studied, documented,
and collected by numismatists for years. By studying a country's money,
one gains an understanding of that country's history. The politics and
political interplay behind the Morgan Dollar has had quite an impact on the
history of the United States. By investigating the history behind the
Morgan Silver Dollars, we will gain a greater appreciation and understanding
behind the growth and formation of the United States as a nation.
In 1848, it was the discovery of gold at Sutter's Mills, in California, that
spurred the Great Gold Rush of 1849. People from all over the world were
flooding into California seeking fame and fortune. In the spring of 1850,
a group of Mormons, on their way to California, camped in the Washoe region of
what is now Nevada to wait for the mountain passes to open from the winter snow.
While encamped, they panned for gold in the Carson River and discovered gold.
When the mountains became passable, they continued on to their original
destination. Over the next few years, this region along the Carson River
became a staging area for many to pan for gold on their way to California.
Seven years later, gold was discovered in Six-Mile Canyon on what was to become
known as the Comstock Lode, one of the largest silver finds in the country's
Discovery of the Comstock Lode has been greatly disputed over the years.
Some say, it was Ethan Allen Grosh and his brother Hosea Ballou Grosh who died
under dubious circumstances before their claim could be recorded (1857).
The more colorful story from that region is the story of Pat McLaughlin and
Peter O'Reilly. The year was 1859. In the spring of that year,
McLaughlin and O'Reilly were prospecting at the head of Six-Mile Canyon.
The two of them dug a pit to collect water to use in their rockers (a piece of
equipment used to wash the soil away from ore), as they dug they found gold.
Henry Comstock stumbled along and found McLaughlin and O'Reilly. Seeing their
strike, Comstock claimed their find was on his property (it wasn't). The
gullible pair, in order to avoid trouble, quickly agreed to give Comstock a
share. While mining for the gold, their rockers would constantly clog with
a very heavy blue-gray mud. That blue-gray material would later prove to
be silver ore, but not before the three partners had sold off their mining
interests. Comstock sold his for $10,000. He invested his money in trade
goods stores, went broke, and committed suicide in Montana. McLaughlin
sold his interest for $3,500. Having wasted all his money, he spent the
rest of his life working odd jobs. O'Reilly collected dividends from his
interest for a number of years, finally selling his share for $50,000. He
built a hotel in Virginia City, and dealt in mining stock. Later he began
another mining venture, only to lose everything he owned. He went insane
and died in a California asylum.
Mining the silver and gold from the Comstock Lode required a tunneling
technology that the average prospector just could not afford. Eventually,
the mines were taken over by large operations like the Ophir, the Yellow Jacket
or the Crown Point mines. It is estimated that the Comstock Lode's total
yield was in the vicinity of $400 million, and its production lasted well into
the late 1880s.
During the Civil War, President Abraham Lincoln actively campaigned for the
Nevada territory to seek statehood as a free state. When Nevada agreed,
the process proceeded at high speed. Nevada was placed in a position where
they needed to telegraph their state constitution to Washington, D.C. for
ratification as the 36th state, and in October 1864, Nevada joined the Union.
Nevada's entrance into the Union contributed $45 million towards defeating the
Confederacy in the Civil War.
When the Mint Act of 1873 was enacted by Congress, it basically legislated
the then-current American dollar coin out of existence, and was an attempt to
tie the United States' monetary system to the gold standard. Just as many
countries throughout the world were doing. In fact, the German Empire
under Bismarck adopted the gold standard, and released about 8,000 tons of
silver onto the world marketplace. The mine owners and their lobbyist saw
this as an outrage, and called the Mint Act the Crime of '73. At
about the same time, the United States sunk into an economic depression
following the Panic of 1873. This aligned the financial institutions with
the mine owners. Both wanted the free flow and minting of large quantities
of silver coinage to be released into circulation.
The Specie Redemption Act was passed by Congress in 1875 and signed by
President Grant. Under this act, the U.S. government stated, paper
currency of $1 or more would be backed by gold, and they would gradually reduce
the number of "greenbacks" in circulation. In addition, any paper notes
less then a dollar would be removed from circulation and replaced by silver
coinage. Although this act increased the amount of silver coinage to be
placed into circulation, it was not enough for the silver miners in the western
states. There was no guarantee that the U.S. Mint would purchase silver
from the mine owners with all the cheap silver available on the marketplace from
other countries. The mine owners wanted more; it was owed to them for
their financial help during the Civil War.
U.S. Mint Director Linderman saw where this political power struggle was
heading. It would not be long before the silver dollar issue would once
again be brought to the forefront. In 1876, Director Linderman hired
George T. Morgan as an assistant engraver to prepare designs for a new dollar
In 1877, Congressman Richard P. Bland (D-MO), a.k.a. 'Silver Dick,' sponsored
and gained passage of a bill that provided for the liberal coining of silver.
When this bill came before the more conservative Senate, they decided to tone
down the House proposal. Senator William B. Allison (R-IA) agreed to
co-sponsor the modified version of the House Bill, and it became known as the
Bland-Allison Act. The following were the basic provisions under this act:
- The U.S. Treasury would be required to purchase between $2 million and
$4 million worth of silver each month from the western mines.
- The Silver was to be purchased at the current market rate, not at a
predetermined ratio tied to the value of gold.
- The silver would be used to mint coins at a ratio of 16:1 to gold, i.e.
16-ounces of silver would be equal to 1-ounce of gold, regardless of the
individual metal's respective market value.
- The metal would be minted into legal tender silver dollars.
The Bland-Allison Act was passed and sent to President Rutherford B. Hayes'
desk for signing. The mine owners and financial interests complained the
bill didn't go far enough. The opposition argued that the bill was
economic insanity. President Hayes vetoed the bill. On February 8,
1878, Congress overrode the Presidential veto, and the Bland-Allison Act became
law. On that same day, Mint Director Linderman, with George Morgan's
preparation of the new silver dollar coin completed, officially approved the
design, and production started two weeks later.
The Morgan Dollar! It is amazing to look back in time revealing what
looks like a series of unrelated events culminate into the production of a
silver dollar. The history and fascination with the Morgan Silver Dollar
does not stop here, but continues on....