Q. David Bowers
Monetary Conditions in 1878 Neil Carothers wrote the following:" "By the end of 1878 conditions were highly satisfactory.
Wage owners were receiving subsidiary coins (dimes, quarters, and half dollars of meltdown value less than their face value) and trade dollars and forcing them on retailers=small merchants everywhere were overburdened with silver coins. Banks were refusing to accept them for deposits, as the dime, quarter dollar, and half dollar were legal tender only to five dollars at the time. Storekeepers had to dispose on the brokers at discounts running as high as 3%. On the Pacific coast, so many accumulated that one time the discount was 8%. Many protests reached Congress.
"Such minor coins should have been redeemable in unlimited amounts, but no one thought to do this until late 1878, when a measure was introduced in the Senate, and then again presented in 1879. Finally, the legal tender of subsidiary coins was raised to $10. This applied to private transactions. No merchant had to accept more than $10 worth if he didn't want to. The Treasury, however, was directed to redeem all subsidiary coins presented in multiples of $20, to hold these coins, and then to pay them out again to the public upon application .... (Similar policies ofredemption at the New Orleans Mint in the early 1880s may have been responsible for quantities of lightly circulated Morgan dollars coming back to the mint. Perhaps also relevant is the comment (see below) about large volumes of Morgan dollars which kept coming back to the Treasury.)
"[The Bland-Allison Act] was a wretched compromise, without a single redeeming feature, carrying with it the dangers of the wrong-ratio bimetallism without establishing the double standard. By it silver mine owners were bought off with a large market for silver, the bimetallists were deceived with a fictitious restoration of the double standard, and the single standard advocates were solaced with a last minute rescue of the gold standard when it appeared to be doomed. Its immediate effect was to add to the currency an unwieldy coin that had never circulated in the history of the country, too valuable for use as fractional currency, too bulky for large payments."
Carothers went on to say that during 1878 and following years the Treasury bought the minimum amount possible under the law, $24 million worth of silver bullion per year, but the number of dollars produced was variable, and increasing with the decline in the value of silver and averaging about 28 million silver dollars a year.
"The coins [Morgan dollars] were, in general, very badly received. In two regions they were accepted in large numbers. In the South they circulated because of an interesting social situation. As a class the recently emancipated slaves were illiterate. There were no gold coins in circulation, and the colored population refused to use greenbacks with their printed symbols. They gladly accepted the new silver coins, and from this situation came the custom of using silver dollars in the South, a practice that is even today [when Carothers wrote this in 1930] only slowly giving way. In the West the aversion to paper money and the general desire to support silver led to the acceptance of the silver dollar.
"The North and East would have none of them. With the increasing annual coinage the volume returned to the Treasury in tax payments steadily increased. In 1886 Secretary Manning, anxious to keep them out of the Treasury, devised a clever scheme to transfer their ownership to people even while they remained in Treasury vaults. This was to issue silver certificates, then issued in large bills, denominations small enough to insure wide circulation. At Manning's suggestion Congress passed the law of August 4,1886, providing for the issue of $1 and $2 silver certificates. They were merely receipts entitling the owner to claim the dollars lying in the vaults. They were not legal tender, but carried with them the ownership of silver dollars that were legal tender. The notes were much like the familiar greenbacks and were readily accepted;"
Collecting Die Varieties
The March 1911 issue The Numismatist printed this comment:
"The extent of the field of mintmarks can be partly realized when one considers the statement of Mr. Howard R. Newcomb, the well-known Detroit mintmark collector, that of the 1878, 1879, and 1880 dollars alone he has no less than 22 die and mint 'letter varieties."
The Year 1878 in History
Business remained in a slump, continuing the after-effects of the Panic of 1873. Duringi878 over 10,000 businesses failed. Thomas Edison developed methods for the cheap production andtransmission of electricity, portending widespread use 'to light cities and homes. This had an adverse effect on gas company stock shares on Wall Street. Edison con" tinued his experiments to develop a practicalfilament for an incandescent light bulb, but success would not come until the carbon filament of the following year, 1879. In the meantime, the inventor tried over 500 different substances. WhiteSoap, renamed Ivory Soap in 1882, was introduced by Procter & Gamble in Cincinnati.
In Deadwood, in Dakota Territory, a smallpox epidemicswept the inhabitants. Among those rendering assistance was Marthajane Canary, who became known as Calamity Jane. In the Gulf Coast area a yellow fever epidemicraged, killing an estimated 4,500 in New Orleans plus about 10;000 elsewhere. Newspaperman Joseph Pulitzer purchased the St. Louis Dispatch, later to merge it with the St. Louis Post to create the Post-Dispatch, which would become the cornerstone in a publishing empire including the New York World.
In Petoskey, Michigan, the last known mass sighting of passenger pigeons occurred. In 1914 the species would become extinct when the last of the species died in the Cincinnati zoo.
On December 17, 1878, greenback legal tender notes achieved par with gold and silver (which would have happened soonthereafter anyway, as mandated by law to take place on January 1, 1879). For the first time in American history, paper dollars, gold dollars, and silver dollars all had the same value.
At the Philadelphia Mint, production of nickel three-cent pieces, Shield nickels, 20-cent pieces, and trade dollars was limited to Proofs for collectors; no business strikes were made for circulation. Goloid, a "dream metal" patented by Dr. William Wheeler Hubbell on May 22, 1877, was employed to strike numerous pattern 'dollars beginning in 1878 and continuingthrough 1880. Thisalloy contained silver and gold metal in the value ratio of 16 to 1, alloyed with 10% copper by weight (to add strength). Goloid coins were to be struck with weights and proportions on the metric system, hence the term goloid metric dollar. Hopefully, goloid would please both silverites and gold bugs and would be a prayer answered at the Mint. Reality intervened, and Dr. Richard Henry Linderman pointed' out that the goloid alloy looked just like silver, was indistinguishable from the standard silver alloy, and that if one grain of gold were replaced by one of silver, the intrinsic value would drop tojust 81-1/4¢, and if the gold wereomitted entirely, the value would be reduced to 60¢ with no one except a metallurgist being able to tell the difference. After considerable experimentation, the idea of goloid and a metric coinage was dropped:'