Q. David Bowers:
The following narrative, with minor editing, is from my "Silver Dollars & Trade Dollars of the United States: A Complete Encyclopedia" (Wolfeboro, NH: Bowers and Merena Galleries, Inc., 1993).
Status of the dollar: After spring 1853 the silver dollar no longer circulated at par as it had a bullion value greater than its face value. In his 1861 Annual Report of the Director of the Mint (quoted at length below) James Pollock said that he sold silver dollars in small lots at 108 cents, specifically:
The silver dollar, as it now is, actually has three values:
1. It is a dollar simply, or 100 units or cents;
2. By the Mint price of silver it is 103-948/1000 cents, which is its true commercial value as compared with gold.
3. It has an interior, or Mint value, which is determined by its relation to silver in the half dollar, which makes it 107-27/ 64 cents, for which reason single pieces are paid out at the Mint, at the even price of 108 cents.
After early 1853, and continuing to at least 1860, the vast majority of Liberty Seated dollars were shipped to Chinese ports, where they were used to pay for merchandise. They were not an advantageous trade coin for American exporters who had to buy them at a premium from banks and bullion dealers, and once they reached China they sold at a discount in comparison to the heavier Mexican silver dollars. For this reason, the United States made special trade dollars of heavier weight beginning in 1873.
As Liberty Seated dollars were accepted by the Chinese by weight, not by sight, few were counter-stamped for further use. Rather, most were shipped in bulk to melters and refiners and foreign mints.
A change in emphasis: Beginning in 1861, emphasis in silver dollar distribution was not primarily export to China. Rather, in this year some pieces were sent beyond the borders of the United States, but for the first year in nearly a decade, many remained stateside. R.W. Julian relates that in one instance in 1861 a quantity amounting to 40,000 silver dollars went to the melting pot to provide silver for subsidiary coins.
Circulated grades: When it comes to 1861 dollars, rarity is the order of the day. While Proofs are occasionally seen on the market, circulation strikes in all degrees are very elusive. The relative degree of circulation strikes of all Philadelphia Mint Liberty Seated dollars of the early 1860s is difficult to calculate. Proofs come on the market with regularity, as noted, but these are more visible than circulation strikes and tend to be included in auctions more often than VF and EF coins.
The circulated circulation strikes of the early 1860s furnish an area of intense interest to Liberty Seated specialists, and in my business and research correspondence I receive more inquiries on these than on any others of the design, with the Carson City coins running a close second.
The acquisition of a nice Very Fine, Extremely Fine, or AU 1861 dollar is an occasion for pride. Fortunately, catalogue valuations do not at all reflect the true rarity of such coins, especially in relation to the rarity of later, more publicized higher priced rarities such as the 1893-S Morgan dollar.
Mint State grades: Although the 1861 is very rare in circulation strike form, it is not in the very top echelon of rarity in Mint State. Still, specimens are rare, and when they come on the market they attract attention, deservedly so. Uncirculated coins, when found, are just as apt to be MS-63 or MS-64 than in a lower Mint State grade.
Quality of striking: Many 1861 circulation strike dollars show areas of light striking. Indeed, this is a hallmark of this particular date.
1. Arrowheads touch: Breen-5467. Obverse: Apparently the die described below for Proofs. Reverse: With 2nd and 3rd arrowheads touching, as in former years.
2. Arrowheads apart: Obverse: As No. 1. Reverse:
Arrowheads spaced distinctly apart, as in later years. Seven obverse and eight reverse dies were made for 1862; probably most were not used.
Dies prepared: Obverse: 7; Reverse: 8
Circulation strike mintage: 77,500; Delivery figures by day: January 24: 21,000; January 28: 12,000; February 26: 17,000; March 8: 6,000; March 12: 7,000; March 19: 9,000; June 25: 5,500.
Estimated quantity melted: Unknown Approximate population MS-65 or better: 4 to 8 (URS-3)
Characteristics of striking: Many have areas of weak striking, but well struck pieces exist.
Known hoards of Mint State coins: None
A new reverse die with claws and arrowheads more delicate than earlier years was first employed in 1861; however, the differences between the old and new dies are very subtle.
The Status of the Silver Dollar
In the Annual Report of the Director of the Mint for 1861 the director, ex-Governor of Pennsylvania James Pollock, made the following observations in reference to the status of gold dollars and silver dollars:
"The gold dollar of the United States, conforming in standard value and decimal character to all the gold and silver coinage of the country, except the silver dollar, has been properly selected and should be retained as the standard of value for all coins used or employed in commercial or governmental transactions with other nations. The silver dollar of the United States, differing as it does in commercial and decimal value from the other silver coins of the country, cannot, without disturbing our decimal system and producing confusion in the relative value of our gold dollar is 412-1/2 grains; or two half-dollars, or other component fractions of the dollar, 384 grains-a difference of 28-1/2 grains.
"The silver dollar as it now is has actually three values:
"1st. It is by law a dollar simply, or 100 units or cents.
"2nd. By the Mint-price of silver it is 103.98 cents, which is its true commercial value, as compared with gold.
"3d. It has an interior or Mint-value, which is determined by its relation to the silver contained in the half-dollar, which makes it 107-26/64 cents; for which reason single pieces are paid out at the Mint at the even price of 108 cents. (A very significant comment which states that the government would not payout its own silver dollars at face value. Nor had it done so since spring 1853. For this reason, the denomination did not circulate. This and the first two valuations follow his predecessor's policy.)
"As the dollar, which is the unit of our money, is represented in gold coin, it would seem desirable not to have another dollar in another metal; but if this is inadmissible, and the silver dollar should be retained, then it should be reduced to eight-tenths of an ounce, to be in true relation to our other silver coins.
"Two reasons seem to have influenced Congress in retaining the silver dollar at its present anomalous terms: First, that it preserves the old dollar, known from the beginning of our coinage, and often exactly stipulated for in deeds of rent charge, mortgage, and other moneyed securities. To this it may be successfully replied that such payments are now always made in gold, because it is the legal and usual tender for all sums exceeding five dollars, and because silver dollars are no longer to be had, or are very rare. (Another very significant comment. The director of the Mint called recent silver dollars very rare or unavailable despite melting at least 40,000 in this same year.) In the second place, it was supposed to be needed for our China and East India trade. But our consular advices are to the effect that our silver dollars are very reluctantly taken at the ports, and not at all in the interior of China. (Liberty Seated dollars were shipped in quantity to China, where they were indeed used in certain port cities. They were accepted by weight and soon melted. However, the quantity of American dollars was small in comparison to the vast numbers of Mexican dollars sent to the Orient.)
They are believed by the Chinese to be of less value than they really are. The reasons for its retention having ceased, either we should cease to coin the silver dollar or it should be made to conform in weight and value to our lesser silver coins."
What Might Have Been (Part III)
Dies were shipped to New Orleans for an 1861-O coinage of silver dollars, but they never went into use, so far as anyone knows.
The American Journal of Numismatics, July 1876, page 11, printed a submission by William Sumner Appleton, who quoted William E. DuBois, curator of the Mint Collection at Philadelphia, on the subject of which varieties of dollars had been struck at New Orleans. DuBois stated that dollars had been coined in 1846,1850,1859,1860, and 1861. As no 1861-O dollars are known, it is presumed that none of this date was made; however, it is possible that certain 1860-O dies were used in the 1861 calendar year. It is also possible that the aforementioned 1861-O dies were used, but if so, DuBois died with the knowledge of where remaining specimens were located. Apropos of the following, extant 1861-O records by both Union and rebel authorities, though they specify extensive coinages of half dollars and double eagles, say nothing about silver dollars.
In 1861, W.C. Prime's Coins, Medals, and Seals was published by Harper & Brothers and intended for children. The author, like most other numismatists of his era, was a person of many interests. The title page of his 1861 work noted that he was also author of Boat Life in Egypt and Nubia, Tent Life in the Holy Land, "etc., etc., etc.," all of the etceteras indicating that the volumes mentioned were but a fraction of his output.
Coins, Medals, and Seals appeared at a time when there were very few books available to guide the coin collector. Prime gave values for silver dollars, grades not indicated, as follows: 1794 $7.50; and 1795 to 1803, $1.25 each.
For Liberty Seated dollars the following were priced at $1.25 each: 1840, 1841, 1842, 1843, 1844, 1845, and 1846, while 1847 was priced at $1.50, 1848 at $1.75, 1849 and 1850 $1.25 each, 1851 and 1852 at $15 each, 1853 at $1.25, the scarce 1854 at $3, the 1855 through 1857 at $1.25 each, 1858 $5, and 1859 at $1.25.
This listing indicates several things:
First, it reflects that at this early time (the manuscript was undoubtedly written in 1859 and 1860) it was well recognized that silver dollars of 1851 and 1852 had significant value, reason enough, so it seemed, for Mint employees to make restrikes. The difference between the market value of $15 for such a dollar and the face value of $1 was $14, or more than two weeks' pay for the average laborer at the time! Further, the 1858, barely a couple of years old when the book came out, was priced at $5, also making it an attractive candidate for restriking.
In his narrative, Prime had this to say concerning the dollar denomination:
The dollar of 1794-the first silver dollar of the series-is now very rare, and commands a large premium. It is worth, in ordinary condition, from $4 to $5, and in Fine condition much more. The dollars from 1794 to 1804 [sic] are not worth any premium above the weight of the silver, unless in Extra Fine condition. One variety of 1798-that with the eagle on the reverse like the eagle of 1797-is rare, and worth about $2.
The dollar of 1804 is very rare-so rare that not more than two or three specimens are known. It has even been doubted whether these are not manufactured coins; but this suspicion is groundless. The dies are in existence at the Mint, (This is stated matter-of-factly; perhaps a Mint official openly told this to the author. By then the 1804 dies were locked in the director's vault; the date 1827 must have been a coverup.) and it is stated that these two specimens were struck from them about 1827.
The dollars of 1836, 1838, and 1839 are but pattern pieces, with a flying eagle on the reverse, never issued in circulation. They are rare in the order of their dates, the last being most rare. They command prices varying from $6 to $18, according to date and condition.
The dollar of 1848 is becoming scarce. In 1851 and 1852 no dollars were issued for circulation, and the specimens struck at the Mint are of the highest degree of rarity. They command $15 to $18 each at auction sales.
The dollar of 1854 is becoming very rare. (The dollar of 1854, somewhat overlooked by a later generation of collectors, was recognized as a rarity by many texts in the second half of the 19th century.) That of 1858 was never issued for circulation, and the Mint Proofs command a price from $4 to $5.
With the foregoing exceptions, the dollars may be easily procured. It should be borne in mind, however, that they are worth a premium of 6% to 7% over the coins of smaller denomination since 1853, and they are therefore seldom found in circulation, and usually go to the silversmiths. Hence they are fast disappearing, and in a few years all the dates will be very rare. The same is true of all the silver coinage prior to July 1853.