Collectors talk of Treasury dollars

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.

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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.

Bowers had a chance to go through some of the coins involved and recalls in his book, “Among the early Liberty Seated dollars of the without-motto type (1840-1865) the most plentiful date was the 1847. Among the dollars of the 1866-1873 years the most often seen was the 1871. The typical coin graded VF or EF and had light gray toning. I recall no Mint State coins at all, nor any extremely worn ones. There were no great rarities such as 1851 or 1852, but there were a number of scarcer dates such as 1844, 1848 and 1870-CC.”

There were, however, apparently some Mint State Seated Liberty dollars that did appear. Bowers suggests there were “1,000 or more heavily bagmarked Mint State specimens of the 1859-O and slightly more of the 1860-O.” His observation on those two dates is interesting as historically there had been rumors about bags of other dates specifically the 1871 and 1872, which were the only two Seated Liberty dollars to have mintages over 1 million pieces.

In fact, the grading services today tend to side with Bowers in the matter as Numismatic Guaranty Corp. reports 175 examples of the 1859-O in Mint State and 258 examples of the 1860-O while the 1871 total is just 123 while the 1872 total is 79.

The Professional Coin Grading Service totals are in line with those of NGC as PCGS reports 320 examples of the 1859-O in Mint State and 520 examples of the 1860-O compared to just 138 examples of the 1871 and 84 of the 1872.

While the grading service totals may not represent every Mint State coin known of the four dates, the fact remains that if any dates were potentially found by the bag or close to a 1,000-coin bag they would have to be the 1859-O and 1860-O. Precisely how silver dollars produced at the New Orleans facility on the eve of the Civil War ended up being found in Treasury vaults a century later has to be an interesting story, but unfortunately it is one we do not know. If there were bags, they had to be shipped to the Treasury at the time because had they been in the New Orleans facility when it was seized by Louisiana forces in the early days of the Civil War, the coins would have been used at the time. That, however, is about all we can conclude regarding the mystery New Orleans Mint State dollars.

There is no doubt that with millions of dollars being paid out over the years for use in casinos and more routine forms of circulation that some great coins were potentially lost or at least lowered in grade. One group we know did not get out at all. This group was something on the order of 14,000 Lafayette dollars that had not sold when the Lafayette dollar commemorative was offered.

Returned to the Treasury, which apparently was not quite sure what to do with them, the coins were placed in the vault with other silver dollars and we know because there are pictures with the bags marked LAFAYETTE. The dollars sat for some time and by the time dealers Aubrey and Adeline Bebee made an inquiry about buying the Lafayette dollars it was apparently already too late as they were converted into silver bullion around 1945.

Certainly the dollar that created most of the interest at the time they were being paid out were Morgan dollars. As bags were being paid out for years there is not always a clear and precise way to determine just what Morgan dollar dates were paid out at what time. Bowers has done a great job attempting to research which dates were in the final releases. He concludes that “the only issues that did not turn up in quantity were the 1895 and 1895-O.”

Of course that is natural for the proof- only 1895, which had a mintage of just 880 that was sold to collectors. The 1895-O is not, however, natural although it did have a low 450,000 mintage. Based on the numbers seen today, it would appear that a significant part of that mintage was released around the time the coins were made as we see a number of circulated examples of the 1895-O, but virtually none in Mint State where the best estimates would be that there might be perhaps 300 examples in all Mint State grades combined but virtually none in upper Mint State grades, making the 1895-O one of the most difficult and expensive MS-65 Morgans today.

In the case of some other top Morgan dollars the situation is less clear. After all, some could have been melted in the Pittman Act and others could have been released in the 1920s and 1930s without any reports from collectors or dealers at the time. The key 1893-S is a good example as with a mintage of just 100,000 there were not many coins to appear at any time. That said, it appears that the 1893-S was released in some numbers at the time it was produced and perhaps released at some point after 1925 in the West. The Treasury release had no reported bags with only the suggestion of 20 Mint State examples found in a bag by Wayne Miller being a reliable report of any Mint State numbers found in the 1950s or later.

Of course, with hundreds of millions of silver dollars emerging from the vaults some dates that were better dates at the time became a lot more common. The 1898-O and 1904-O were two good examples, but the best was the 1903-O which in early 1960 was considered one of the real keys to the Morgan dollar set. Priced around $1,500 in Mint State, the 1903-O was tough even at that price. As Q. David Bowers recalls, “In my nearly decade of dealing coins by that time I had never owned one.”

The 1903-O was at about 10 times the price of other tough dates like the 1889-CC, but none were available and then suddenly in November of 1962 they were everywhere. What had happened was that the bags sitting in the vaults started coming out. It was a surprise as everyone had simply assumed that the 1903-O along with the 1898-O, 1904-O and others had been the dates destroyed in the Pittman Act melting.

In fact, some may have been destroyed but there were still hundreds of thousands all Mint State and all suddenly hitting the market. The price of the 1903-O dropped from $1,500 to about $15, but it makes for a great story. Moreover, many still try to speculate precisely how many hit the market. We cannot be sure but Bowers suggests, “I guess that 200,000 to 350,000 might be in the ballpark.”

Population reports don’t go anywhere near that high, so like all estimates, we await more data.

The Carson City dates and their place in the Treasury releases are a special chapter. When the sales of bags at their face value of $1,000 were stopped that left only about 2.9 million dollars primarily in original bags from the Carson City facility. It was remarkable as Carson City, the famous frontier mint located near the heart of the Comstock Lode had always had the reputation as the facility thatproduced the toughest-to-find Morgan dollars.

It was thought to be a combination of the traditional Carson City low mintages and perhaps Pittman Act melting, that led to this scarcity, but whatever the reason the fact remained that almost all Carson City Morgan dollars were tough.The nearly 3 million coins still in the Treasury vaults did not change that, but it certainly made some Carson City dates much more available as well over 50 percent of some of the entire mintages of some dates were found with the 1884-CC total actually reaching nearly 85 percent of the entire mintage.

There was, however, something of a pattern in the Carson City dates discovered as not all Carson City dates were still sitting in the vaults. The 1878-CC was a higher mintage date yet less than 3 percent of the 1878-CC mintage was in the vaults. The 1870-CC was lower mintage and tough.

The Treasury vault holdings that later became the General Services Administration sales as the government sold its inventory to the public at premium prices did not feature many examples of the 1879-CC as the vaults contained just 4,123 coins. That leaves us with the feeling that the 1879-CC might well have been a date that saw heavy Pittman Act destruction.

Why other dates were not destroyed is an interesting question that might well be answered by the fact that around the turn of the century a large number of Carson City dollars were shipped east to the Treasury in Washington as the Carson City facility was no longer producing coins. Those coins were put in the Treasury vault and logically would have probably been put in the back of the vault. It was a classic case of “first in, last out” as other dollars arrived from other facilities. When dollars were needed for one purpose or another it was natural that the bags used were from the front of the vault, allowing many Carson City dollars to simply sit in the back gathering dust. It appears that those dollars were primarily from 1880-1885 as those dates became the main dates in the GSA sales of the 1970s.

The final few years of Carson City Morgan dollars were, like the first couple years, not heavily represented which was a serious blow in the case of the already tough 1889-CC, making it one of the keys to the Morgan dollar set and by far the most expensive Carson City Morgan dollar. The others would not be as tough, but the Carson City dollars of the 1890s thanks to the fact that they were not in the Treasury holdings and later GSA sales in any numbers remain a tougher than average group of Carson City dollars in Mint State.

The bags in the Treasury vaults were not, however, limited to Morgans. The Peace dollars produced starting in 1921 through 1928 and again in 1934 and 1935 were also found in the Treasury vaults and in some numbers as they had never been subjected to melting in large numbers, having been produced after the Pittman Act.

There would not be much attention paid to the Peace dollars at the time as the focus was on the older and seemingly tougher Morgans. What we have learned over the years, however, is that a number of the key Peace dollar dates are key today because by the 1950s if there had been bags they were apparently already paid out so the later Treasury releases did not include numbers of some of the better Peace dollar dates.

In the case of the 1921 Peace dollar, which had a mintage just over 1 million and which was the first Peace dollar, it actually appears that virtually the entire mintage was paid out at the time. There are no reports of any numbers of the 1921 appearing at later dates, leading to the conclusion that it alone was paid out quickly.

In the case of key MS-65 dates like the 1925-S and 1928-S there are reports of numbers being paid out, but generally at times when there was little collecting interest in both cases around 1950. The low mintage 1928 appears to have been found in mixed bags, but not in any numbers in later years.

The 1934-S might have been the most unusual of all as it was assumed to be available, but then in the 1950s was discovered to be tough. By then it was too late as there were apparently no more bags left. It had been the reverse of the Carson City dollars of the 1880s in that being last to arrive in the vaults it had been one of the first to be paid out and at that time there were virtually no collectors to save examples in Mint State. As a result the 1934-S sits as the key Peace dollar today in MS-60 at a price of $1,875.

Realistically, you could easily go through every Morgan and Peace dollar date to determine when examples were paid out and what impact that had on the availability of that date today. It makes for a fascinating study of the most important hoard in the history of United States coins.

The great Treasury hoard remains as important today as it was at any time in history for the dollars you enjoy and collect in many cases are likely to trace directly to the hoard and the prices you pay are almost certainly at least partially a result of how many of that specific date were paid out for the price of one dollar. That makes an understanding of the Treasury hoard an important element in the story of most U.S. silver dollars and a fascinating part of our numismatic history as well.