The History of the Morgan Silver Dollar
Past, Present & Future
The price of gold and silver is in a trading range. That range is around $1,200 as of November 24, 2017. Investing in a physical coin would be a very practical solution for your investing needs. The numismatic value of a coin increases due to the fact that they are rare and are collectible. This is in addition to the gold and silver content. Even semi-numismatic coins would be a great way to battle inflation and the rising of interest rates.
The Morgan dollar is a semi-numismatic coin. What this means is that the value of the coin is tied to not only the spot price of silver. The rarity or collectability of the coin is also a big factor as to why it is very highly valued. Think of the Morgan dollar as both a bullion and as a collector's item all rolled into one.
How the Morgan Coin Came to Be
You cannot have a proper understanding of history without knowing the circumstances that are happening at that time. It is easy to count the dates. It is hard to trace the causes and the effects of historical events. Let us try to find out why the Morgan dollar is valuable and historical.
- The Morgan dollar is actually a response to the flood of silver coins in 1873. Anyone who has silver bullion can have coins through minting and paying a small fee during this time. Some enterprising miners would exchange their silver for coins when the value of silver is low. For a time, there were too many silver coins. This panic of 1873 had affected so many that Congress had to put to a stop to this free coinage by passing the 4th Coinage Act.
- The said coinage act, however, was repealed in 1876. This is to stop the same enterprising silver miners and owners from trading the silver bullion for trade dollars when the price of silver is low. That was the event that Congress was trying to avoid. That was what actually happened. Higher silver mining activity in the United States caused the price of silver to plummet. The said silver miners increased their profit. This is because they traded the low-cost silver for trade dollars. Those trade dollars can buy more products compared to silver at that time. It caused another crisis, an increase in inflation.
- Congress then tried to pass a bill that would counteract the said inflation. Congress wanted this bill to standardize the value of legal tender. The said bill was made mainly through the efforts of House Representative Richard Bland and Senator William Allison. That is how the Bland-Allison Act came to be. This is the Act that gave rise to the Morgan dollar. However, the name was taken from George Morgan, who was the designer of the said coin.
What is the Morgan Coin?
Production of the Morgan Dollar started almost three months from the passage of the Act. Lady Liberty is facing to the left in the front or obverse side of the coin. There will be seven stars to the left. Six stars would be in the right. The date would be seen below. On the reverse or back side, there would be an eagle holding a branch and three arrows. There will also be a sign stating the value which is $1.
The Morgan dollar is extremely important historically speaking. At the start, it was a legal requirement for the Treasury to buy silver each month worth around 2 to 4 million dollars.
- The gold to silver ratio is at 16 to 1, with 1 ounce of gold worth 16 ounces of silver.
- The composition of the coin is 90% silver and 10% copper.
- Silver was not as useful before as it is today, so the great demand of silver was for currency not for electronics as what is happening nowadays. This means that the Treasury had so many coins that by 1893, it was practically overflowing. However, the treasury was still obliged to the silver miners in gold.
Defaulting on repeal, the said bonds are just a matter of time. Congress then required the treasury to use all of the coins. Silver supplies started to run out in 1904 which halted the minting of the Morgan dollars.
Morgan coins also have played a very important part in the British and American relationship, when German propaganda convinced their Indian constituents that the silver bonds are not backed by Great Britain. The United States then helped by melting some of the silver coins and shipping them to Great Britain. The silver coins played a key part in ensuring victory for World War I and reinforcing the good relationship with Great Britain. It has also given revenue through the sale of the said silver.
Morgan silver coins are immensely important. Having one in your possession is not only a very humbling experience but also a very practical one investment-wise.