Q. David Bowers
Proof set sales, both for gold and silver, were disappointing, and only about half of the 1860 silver Proof coins were actually sold. Some 527 Proof dollars were purchased by collectors, and the rest (803 specimens) melted. Because, for the first time, Proof coins for collectors had been legally delivered, the sets were kept on hand until 1862 so that the maximum number of sets might be sold.
Proof coinage for 1861 followed the 1860 guidelines established by Director Snowden and was all delivered by the time he was fired by President Lincoln in May. (Snowden had done nothing wrong; it was just that the Administration wanted its own people in office in a time of national stress.) As with the Proof specimens of 1860, this coinage continued to be sold until 1862 when the unsold remainder was melted.
During 1860 and 1861, under rules set out by Director Snowden, individual pieces or sets in Proof could be purchased. The premium on the silver dollar was 60 cents if obtained singly. The premium on business strikes, however, remained at eight cents.
This was changed in late 1861 by Director James Pollock, who ordered that single Proof coins no longer be sold. The collector had to purchase the entire silver set (which always contained the minor coins; in 1861 this included the Indian cent) or he did not obtain the silver dollar. No doubt in some cases the collector spent some of the pieces he did not want. Beginning with 1862 collectors could no longer obtain single Proof specimens unless a new design or denomination was introduced in mid-year. With some exceptions (such as for certain Proof trade dollars) this policy remained in effect for the silver coinage until 1916, although collectors were again allowed to purchase individual gold coins at the end of the 1870s.
Beginning in 1862 the number of sets produced was generally the same as the number of pieces purchased. Unsold sets were no longer melted a year or two afterward. All sets were now kept on hand until sold. We find that sets of 1862 were actually purchased by collectors as late as 1877! In some cases, however, the sets had been mislaid, accounting for the late date of the sales. This was true for the 1862 sets, for example. So far as is known at present, Proof coins were not released to circulation (or sold to favored dealers at face value) until after 1873.
In God We Trust
Rev. M.R. Watkinson wrote a letter to the secretary of the Treasury in November 1861 suggesting that a religious motto be placed on the coinage to reflect the growing awakening because of the war. This struck a receptive chord in the Administration, and the Mint began producing patterns in December 1861 with "God Our Trust" on the reverse of half dollars and eagles. The motto "In God We Trust" was officially adopted by Congress for the two-cent piece in 1864. A law of 1865 permitted the Treasury to put the motto on such coins as it thought proper, and this was done in 1866 for several gold and silver denominations and the new Shield-type nickel five-cent piece.
The first silver dollar patterns with the motto (as adopted in 1866) appear with a date of 1863, but the 1863-1865 pieces with IN GOD WE TRUST were apparently all coined in 1867-1868 under Mint Director Henry Richard Linderman, an avid collector of patterns.
At the beginning of 1866, Longacre's new reverse with IN GOD WE TRUST went into service and continued through the end of the Liberty Seated dollar series in March 1873. Two specimens exist without the motto and are sometimes called transitional dollars, but they were coined, probably under Linderman's orders, in 1867-1868. In reality they are fantasy coins, but still they have long drawn collector interest as something out of the ordinary. (One of the two specimens, from the Willis du Pont Collection, was stolen in 1967 and has never been recovered.)
Dollar coinage for the public was virtually non-existent from 1862 to 1864, with the peak non-Proof coinage at slightly over 30,000 pieces in 1864. The numbers struck continued to show slight increase after 1864, but in 1868 coinage suddenly became heavier. The 1868 coinage exceeded 168,000 but in 1869 and 1870 this grew to well over 400,000. The coins did not go into circulation but were primarily made for export to the East Indies, ("Collective name applied, loosely and vaguely, to India, Indochina, and the Malay Archipelago" - Websters New Geographical Dictionary.) according to Director Pollock (earlier director, who was back in the post again in May 1869, having suceeded Dr. Henry Richard Linderman). However, It IS my belief that while a reasonable amount went to the Orient, the large coinages of the 1868-1873 period were almost certainly due to the silver surplus.
Beginning in June 1862, the nation did not have a circulation of gold or silver coins except on the West Coast, where the war had little effect on the economy. In the Midwest and East, however, little was to be seen except for the copper-nickel cent (bronze after the summer of 1864) and fractional paper money ranging as low as three cents (beginning in 1865) in face value. This situation continued after the end of the war because the massive debt incurred by the Union government did not allow the luxury of underwriting the return of the gold and silver coins, which were selling at premiums in terms of federal paper money.