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Saturday, May 5, 2012

Collectors Talk of US Treasury Silver Dollars - My Greatest Financial Blunder

Published by Charleston Voice, 5.5.12 

I knew someday I'd have to re-live my greatest wealth-accumulating opportunity that became my greatest disappointment. I'll tell you why.

Some time back in the early 1960s Dad, a local small businessman in Maine hearing me come into the house, summoned me to the front room, his 'sanctuary'. Obediently, I double-timed to his presence. He gestured  to the floor and pointed "Bill, look what I got at the Federal Trust (local bank) ! Three Mint-sealed bags of 'brand new' silver dollars!"

"Yeah, so what", I responded surly - but not disrespectfully! Silver dollars were only good for the toes of Christmas stockings. 

By this time I was fading my coin collecting interests for cars and carousing. Besides, all being the same date it would be foolish to keep them. Plugging the holes in Whitman blue folders just didn't have the same attraction of changing a transmission, or installing a 4-bl carb on my 6-cyl flathead 1950 Ford - an incompatible enhancement, I should add. 

Same year, model & color, mine was all 'Robin egg blue'. No chrome strip on hood or teardrop spotlights. Wanted to put laker exhaust pipes with knockoffs for 'glasspak' law compliance, but couldn't as engine was a single manifold exhaust. I think it had 110 HP. But still could lay rubber in 2nd gear. JC Whitney was my must-have catalog!

After several weeks the bags of dollars remained unopened on the floor where Dad had first dropped them. Ma routinely complained they were too heavy to move when vacuuming. We agreed to at least open one bag. Prying off the Mint's lead seal, we did. They were all the same date, 1881 of the Philadelphia mint. Aw shucks, common date. Today, the lowest uncirculated grade MS60 1881 (bagmarks) is about $50. The MS65 will run about $600. (What the other two bags held for dates, we'll never know.)

Putting the 1960 era in perspective, one must understand that aside from WWII wage/price controls, there had been no consumer price inflation experienced by the adult generation. Gas always ran about 25 cts/gal. with occasional price 'wars'; candy bars & baseball cards were all 5 cts. a pack.

But, thinking back, Dad may have sniffed a monetary inflation underway. Silver certificates were no big thing. Afterall, the US Treasury had around 6 billion ounces! Of course, all that Treasury hoard is gone now. Dad disposed of the three bags to an older local chap who began exchanging $1.10 (FRN plus a silver dime) for silver certificates. He'd then drive to the FRB Boston with these certificates, exchanging them for silver dollars!

Too late for us, but don't lose out on our painful lesson in currency debasement. 

Be grateful to God for giving you this opportunity to accumulate.

Posted on by Lisa Bellavin

It was the greatest single silver dollar hoard in history. Collectors never seem to tire of its story. Many might even have personal memories of participating in its dispersal.

For the most part prices were the best as over a period of decades the United States Treasury provided collectors and primarily dealers with bag after bag of silver dollars. With each bag containing 1,000 silver dollars and priced at $1,000 you could not beat the price.

What was found or not found in some of those canvas bags is the stuff of legend. The great Treasury silver dollar hoard, however, was many things and while Morgan dollars were a large part there were examples of other types of dollars as well and the story of the coins found and not found makes for one of the great treasure stories in history.

The history of the Treasury hoard was really the history of silver dollars in the United States. Prior to the Trade dollar silver dollar production had basically been dictated by demand either for use or for export. That meant relatively low totals with no Seated Liberty silver dollar having a mintage of more than 1 million pieces until the 1870s.

Trade dollars would be the first silver dollars with mintages routinely topping 1 million, but in theory they were being made for use in China. The Trade dollar turned into a fiasco that saw many Trade dollars end up back at the Treasury but in 1891 they were melted under the provisions of the Trade Dollar Recoinage Act and their silver was used to make 1891-O Morgan dollars.

The real start of the Treasury hoard began with the Morgan dollar. The Bland-Allison Act and later the Sherman Silver Purchase Act called for silver purchases that were to be made into silver dollars, which at the time were Morgan dollars. The numbers struck were far in excess of any mintages from the past. There was no possible way the American people would use the number being minted and immediately Morgan dollars began piling up in bags at the various mints where they were being produced.

The years passed and the numbers grew. At the time the Morgan dollar mintages were suspended after the 1904 mintages it was estimated there were 50 million silver dollars in circulation but over 500 million sitting in the vaults.

The govrnment, of course, made some lemonade out of this fact as the warehoused coins became backing for Silver Certificates. Americans would not for the most part use silver dollars, but they eagerly embraced the convenience of a paper Silver Certificate.

The Pittman Act in 1918 would see just over 270 million silver dollars melted so the bullion coin be shipped to India to help it out as the British Empire then was our ally against the Central Powers in World War I.

The Secretary of the Treasury quickly ordered them replaced after peace returned Nov. 11, 1918.

Silver dollars were needed as backing for Silver Certificates and many had been retired when the Pittman Act melting occurred.

The Morgan dollars of 1921 and the Peace dollars that replaced the Morgan design late that year were not dollars for use in circulation although no one minded if that happened, but really they were dollars for backing Silver Certificates and whether the coins themselves circulated or not was not really a major concern.

In the years following 1921 $1,000 silver dollar bags were paid out routinely upon request, but there was very little collector interest. Many of the bags went to casinos and demand usually peaked around Christmas for use as holiday gifts. A few coins were probably saved by collectors and dealers of the day but the number was small as there was very little collector interest in silver dollars.

Things changed in the 1950s as a few dealers realized that the silver dollar bags being paid out by the Treasury building or other places where they were stored might potentially contain better dates. That saw a slow increase in the number of bags being paid out with the massive run on the silver dollar supplies occurring 1962-1964 when with only roughly 2.9 million dollars left out of hundreds of millions sold at face value, the government stopped releasing them.

The $1 Federal Reserve Note was introduced at this time to replace the $1 Silver Certificate, but that is another story.

No one was talking at the time and no one could have kept records, but the fact remains that hundreds of millions of silver dollars, most of which were Mint State, had been released. The ramifications are many, but simply trying to determine what important coins were sold for their face value and which ones were not sold in any numbers is a complicated task today, but an important one for without the Treasury hoard the silver dollar market today would be a very different one.

The earliest coins found in the Treasury holdings were among the most interesting but least often mentioned. There were actually Seated Liberty dollars from prior to 1873 found in the some bags. Q. David Bowers in his book American Coin Treasures and Hoards has provided us with some description of the Seated Liberty dollars found in the bags that Bowers believes to have been released in late 1962 and early 1963.Finish reading @Source