1903-O Morgan Illustrates Law of Supply and Demand

It has been said over and over that coin prices are determined by supply and demand. It has always been that way, and usually the only aspect of the two that can change significantly is demand.

A lot of things can influence demand. A coin can be heavily promoted, as would be the case with a new doubled die Lincoln cent. Tastes change. In the 1950s, lower denominations were in great demand. They were the heavily collected denominations, fitting far better into the budgets of young collectors. More recently the focus was on Morgan dollars. Such coins are big and impressive and there are adequate supplies to provide most with top-grade examples.

Hoards added to the dollar supply. Perhaps the most famous was the Treasury hoard of Carson City silver dollars that was sold in the 1970s.

The Carson City dollar sales represented the bulk of roughly 2.9 million silver dollars in government vaults when the decision was made to release no more at face value in 1964. No one truly knew what silver dollars were in the vaults at the time, because over the years excess dollars had simply gathered.

The government stockpile of silver dollars had been around for almost 100 years. At the time the legislation was passed to create the Morgan dollar in 1878, there were bags of Seated Liberty dollars sitting in the vaults. We know because a few of those bags were released to the public at face value during the early 1960s when there was a run on the government inventory due to the rising price of silver.

The Seated Liberty dollars represented a bonanza to the lucky people who got them. They were perilously close to a numismatic time capsule in the form of coins like 1871 and 1872 Seated Liberty dollars, which had been sitting for almost a century.

The Carson City dollars were also a surprise. The Carson City facility had routinely produced the lowest number of silver dollars each year. Even if the entire mintage of some Carson City dates had survived, some dates would still be tough. The government decision to sell them at premium prices also prevented a severe market downturn in the price of some dates.

The impact of the release of the Seated Liberty dollars and the sale of Carson City dollars on the market was minimal, but not every date escaped the discovery of new supplies.

The classic case was the 1903-O Morgan. It had a mintage of 4,450,000 pieces. It was a relatively average mintage for a dollar of the period, certainly not the sort of mintage that would make it a significant rarity.

The price and desirability of the 1903-O back in the early 1960s was a different matter. Despite its average mintage, the 1903-O was priced at well over $1,000, a price right up there with many famous dates in American numismatic history. The reason was that the 1903-O was simply never seen. The assumption had to be that the 1903-O had been destroyed in one of the meltings of Morgan dollars over the years.

It was certainly possible. The 1918 Pittman Act took millions. World War II meltings took millions more. However, the assumption was mistaken. Bags of 1903-O Morgan dollars were released.

The price of an uncirculated 1903-O fell to under $20. It may have lost its status as a classic rarity, but the 1903-O has gained a bit of interest as a classic story from the 1960s. That surely is worth the $432 an MS-60 brings today.