Q. David Bowers
The late 1840s saw silver dollar coinage that fluctuated from 15,000 pieces in 1848 to more than 140,000 in 1847. It all depended upon the state of the economy and how much silver was being imported (for American goods sent abroad) in comparison with exports of the same metal. There was also the added factor of each bullion owner deciding on a year-to-year basis how the excess silver should be stored. Much of it wound up as bank reserves when the original owner of the dollars needed to earn interest from the coinage.
The large-quantity coinage for 1847 at Philadelphia (and perhaps that at New Orleans in 1846) can be traced directly to a decrease in silver exports during the fiscal year 1846-1847. The drastically lower coinage for 1848 simply shows that silver was exported in normal amounts and the surplus of 1847 had evaporated. There was also a limit to the amount of silver dollars that could be absorbed by the mercantile community. Not being in circulation, they had to be stored or invested.
One use of dollars in the 1840s was for contractual purposes. Many leases called for payment to be made in "Spanish milled dollars." U.S. dollars were sometimes used in their stead as the amount of silver was considered to be the same.
Silver Rises in Value
In the early days of 1848 came one of those seemingly minor events that would disrupt the economies and monetary systems of the world. James Marshall discovered gold on the giant Sutter ranch in California: Despite frantic efforts to keep the secret from reaching the outside world, it did. Tens of thousands of men were soon on the way to the new El Dorado. Some would get rich, most did not, but the amount of gold torn from the streams and mines of the American West was staggering. The United States could not absorb all of it. Massive discoveries in Australia in the early 1850s added to the monetary upheaval.
So much gold came to the world market that "silver was soon undervalued, and bullion dealers bought every American silver coin they could obtain. Much of the silver went to Europe for melting. Some domestic hoarding also went on. By the middle of 1849 the American monetary system was in serious trouble. By early in 1850 little silver was to be seen in general commerce except for an occasional badly-worn Spanish coin.
Bullion dealers certainly went after the largest coins first. It was much easier to handle halt dollars and silver dollars than to bother with half dimes or dimes. The early emphasis on dollars accounts for the relative rarity of certain dates that ought to be more common because of their mintage, such as the 40,000 struck in New Orleans in 1850.
Although the discovery of gold in California began to disrupt the world monetary systems by early in 1849, the net outflow of silver from the United States had actually commenced in late 1847 in response to economic pressures having nothing to do with California. In the fiscal year 1848 (ending on June 30), for example, the United States imported about $3 million worth of silver and exported $4.8 million. The shortfall had to come from somewhere, and no doubt many silver dollars left the country at that time.
Coinage of the Early 1850s
Beginning in the summer of 1850 the net outflow of silver became massive rather than just heavy. In the fiscal year 1847 there had been a net inflow of $1.6 million worth of silver coins and bullion. For fiscal 1851 the net loss was $4.8 million, but only about $1 million was lost to the nation during the next two years, and in fiscal 1854 there was a surplus.
The result of this instability in the silver market was drastically reduced silver coinage after 1849, silver dollars in particular. Only 2,400 silver dollars were struck in all of 1851 and 1852 and these may have been struck on official orders; it is of course also possible that one or two mercantile establishments had need of a few coins for special purposes.
So few silver dollars were coined in 1851-1852 that collectors avidly sought specimens as early as 1857. Restrikes were made by order of Mint Director James Ross Snowden. For 1851 a new obverse die, with centered date, was made to strike Proofs. The original 1852 die was also used to strike Proofs. In one odd case, a New Orleans dollar is known as an undertype for an 1851 restrike, but this piece was probably made clandestinely by a Mint employee rather than at Snowden's orders. Traditionally, the Proofs of 1853 dollars have been considered as restrikes, made in the 1860s.
After a great number of complaints about the lack of a circulating silver currency, Congress finally acted in 1851. In March of that year a new silver coin, the trime (three-cent silver), was created of 750/1000 fine silver, as opposed to the usual 900/ 1000. The trime was thus a debased coinage. A great monetary experiment was now underway in this country.
Only five million trimes were coined in 1851, but this moved up strongly in 1852 to nearly 19 million pieces. Another 11.4 million pieces followed in the first quarter of 1853. Coupled with a heavy coinage of gold dollars (first struck in 1849) and copper cents, the nation was able to make do with a supply of coins in the marketplace, though not well. It was clear that drastic change was still required to save the monetary and economic system from eventual collapse.