Q. David Bowers
Silver $1 Legislation Summary
The Annual Report of the Director of the Mint, 1893, proved a summary of legislation directly affecting the Morgan silver dollar:
"The Act of February 28, 1878, provided for the coinage of the standard silver dollar and restored its full legal tender quality. Under the provisions of this act the secretary of the Treasury was authorized and directed to purchase from time to time silver bullion, at the market price thereof, not less than $2 million worth per month nor more than $4 million worth per month, and cause the same to be coined monthly, as fast as so purchased, into such dollars.
"The Act of June 9, 1879, provided that the subsidiary silver coins of the United States should be legal tender in all sums not exceeding $10.
"The Act of July 14, 1890, authorized the secretary of the Treasury to purchase 4.5 million ounces of silver monthly, or so much thereof asmight be offered, at the market price, not exceeding $1 for 371-1/4 grains of pure silver, and to issue in payment for such purchases of silver bullion, Treasury notes of the United States, redeemable on demand in coin, and to coin two million ounces of the silver bullion purchased under the provisions of that act into standard silver dollars until the 1st day of July, 1891, and after that time to coin as much as might be necessary to provide for the redemption of the Treasury notes issued in payment of silver purchased.
"In accordance with the provision of this act, authorizing the secretary of the Treasury, after July 1, 1891, to coin as much as might be necessary to provide for the redemption of Treasury notes, a limited amount of silver dollars was coined each year up to June 1, 1893, when, with the exception of 245 Proof coins, the coinage was suspended.
"The act approved November 1, 1893, repealed the purchasing clause of the Act of July 14, 1890. [See above]"
Morgan Dollars Recoined
Standard silver dollars coined since 1878 were melted from time to time. The amounts melted and recoined into other silver dollars came to the following, per the Annual Report of the Director of the Mint, 1893:
1883 fiscal year $621, 1885 fiscal year $1,850; 1887 fiscal year $8,292; 1888 fiscal year $14,055; 1889 fiscal year
$31,042; 1890 fiscal year $11,977; 1891 fiscal year $10,800; 1892 fiscal year $42,881; 1893 fiscal year $10,500.
Total 1883 through 1893 fiscal year: $132,018.
Silver In The Treasury Vaults
The following appeared in Harper's Weekly in July 1893:
"A picture of the Treasury in which silver bullion is stored is an instructive object lesson. It is known vaguely that the United States are buying every month 4.5 million ounces of silver, and that this represents about the product of the silver mines of the United States. It is not known what an enormous bulk of silver the laws of Congress have compelled the government to purchase and keep.
"The government has been buying silver ever since 1878, when the law known as the Bland law went into effect. Until August 13, 1890, the Treasury purchased every month $2 million worth of bullion to be coined into standard dollars. It might have expended $4 million in that way, and the country ought to be thankful, perhaps, that the different secretaries restrained themselves from going to the utmost limit of the statute. Nevertheless, the government purchased under the law of 1878, 308,199,261.71 ounces, at a cost of $323,635,576.19-an average cost of $1.05 an ounce. There are in circulation about $380 million in silver, most of which is in silver certificates, the metal back of these notes being stored in the Treasury. Stated roughly, 300 million standard silver dollars would cover a space of nearly one-half a square mile.
"Since August 13, 1890, the government has been buying 4.5 million ounces of silver a month. On the silver purchased under the act of 1878 the government made a profit of about $70 million by stamping a lie on every 375 grains of fine silver. (Apparently, the "lie" was that the coin was worth ONE DOLLAR (per the inscription), even though it contained only about 80¢ (in 1890) to 60¢ (in 1893) worth of silver.) On the silver purchased under the act of 1890 the government has lost about $40 million by the depreciation of its stock of bullion on hand.
"The amount purchased under the Act of 1890, most of which is stored in the vaults of the Treasury, was about 157 million ounces on the 1st of July. The government owns, therefore, about 4,000 tons of silver, for which it is obliged to find storage room. Moreover, it must go on buying and storing more than 140 tons of silver a month, and is issuing against the metal paper money, which it is redeeming in gold and receiving for its dues, but which is not regarded as money or a valid representative of money in any other country in the world except Mexico and the South American republics, with whom we trade through London, and who, inconsistently perhaps, demand payment of our debts to them for hides, coffee, and other articles that we import in gold exchange.
"But we are now concerning ourselves with the load of silver bullion which the government is storing. It is difficult to foresee what will be done with this amount of material. Even if the Sherman law is repealed, there it is, and if the government undertakes to sell it, the silver market will go even lower than it did the other day, when the silver miners of Colorado threatened to close their mines because India was about to stop the free coinage of silver. In other words, the silver miners insist that the government shall buy and maintain the price of their product, although the Treasury vaults now hold 4,900 tons of it which it cannot sell, on which it has lost millions of the money of the taxpayers, and which is threatening the credit of the government. If the silver miners have the right to demand this, why is it absurd for the farmers to demand that the government store their crops and loan them money on them." (How prescient this article was! In the twentieth century the government went into the agricultural subsidy business in a large way. Perhaps the most irrational policy was the government's paying subsidies to tobacco farmers while at the same time the Surgeon General of the United States was waging a war against smoking.)