Seventy at Seventy Part Six – Silver Dollars

By Mike Sherman - February 17, 2017

After a few weeks hiatus, we’ll return this week to our Seventy at Seventy column where we’ve been looking at the price performance of 70 representative coins over the past 70 years, as reported by The Guidebook of U.S. Coins, better known as the "Red Book." This time, we’ll have a look at one of the most popular series in U.S. numismatics: Silver Dollars.

Silver Dollars have not always enjoyed the popularity they have today. During the early years of this study, most were worth under $10 in uncirculated condition. (This even includes the better dates such as the 1879-CC and 1928-P Peace Dollar.) Oddly, much of the increased interest in Silver Dollars came during the 1960s and 1970s, when enormous quantities were released onto the market by the government, coming out of the treasury vaults in sealed bags. Other than a few previously "rare" dates (1903-O and 1904-O), the huge influx of coins actually stimulated collector interest and prices rose steeply between 1957 and 1977.

Previous readers of this series are familiar with a weakness in this study – in that a substantial premium for the highest grade uncirculated and proof coins is a relatively recent phenomenon. Only since the late 1970s has a wide gap opened up between lower and higher grade uncirculated and proof coins. We have used the numerical grade MS-63 for the years 1987-2017, so consequently these results are skewed towards the lower end Uncirculated grades. The purchase of a gem quality coin (at only slightly more than an average specimen) anytime from the late 1940s through the late 1970s would have yielded far better returns.

Silver Dollar Table – Actual prices from A Guidebook of United States Coins

Date-MM	Den	Grade	Note	1947	1957	1967	1977	1987	1997	2007	2017
1879-CC	$1	Unc (63)		8	9	180	750	1,500	2,300	7,500	8,000
1881-S	$1	Unc (63)		3	3	3	11	100	28	50	65
1884-CC	$1	Unc (63)		4	7	38	30	170	65	260	240
1893-S	$1	Unc (63)		100	325	4,600	25,000	32,000	47,500	120,000	225,000
1895	$1	Prf (63)		35	375	4,750	8,250	20,000	18,000	47,500	50,000
1921	$1	Unc (63)	Peace	2	9	14	150	400	225	450	450
1922	$1	Unc (63)		2	3	2	10	65	20	32	40
1928	$1	Unc (63)		3	9	115	185	450	250	750	850
TOTAL				156	738	9,701	34,386	54,685	68,388	176,542	284,645

Three basic cycles are evident. The first is the explosive increase in values between 1947 and 1977, which saw prices increase by over 200 times. The next was a period of rather slow growth between 1977 and 1997 that only saw prices double in 20 years. Finally, we see another period of steeper growth from 1997 through today, where prices more than quadrupled. Overall, this basket of Silver Dollars returned an average of 11.3% per year, every year, for the past 70. Not too shabby.

Readers of past columns know that we like to examine the effects of inflation and the declining purchasing power of the dollar. Over short periods, this is not terribly relevant, but over a period of 70 years, it matters a great deal. The table below shows past prices, adjusted upward to constant 2017 dollars.

Gold Type Coin Table – Inflation-adjusted, constant 2017 dollars

Date-MM	Den	Grade	Note	1947	1957	1967	1977	1987	1997	2007	2017
1879-CC	$1	Unc (63)		80	72	1,275	2,950	3,150	3,400	8,550	8,000
1881-S	$1	Unc (63)		25	25	20	45	210	40	60	65
1884-CC	$1	Unc (63)		35	55	265	120	350	95	300	240
1893-S	$1	Unc (63)		1,050	2,750	32,500	97,750	67,000	70,500	137,000	225,000
1895	$1	Prf (63)		375	3,150	33,750	32,250	42,000	26,500	54,000	50,000
1921	$1	Unc (63)	Peace	25	75	100	600	850	325	500	450
1922	$1	Unc (63)		20	25	15	35	125	30	35	40
1928	$1	Unc (63)		32	75	825	725	950	375	850	850
TOTAL				1,642	6,227	68,750	56,280	134,475	114,365	101,265	284,645

Even after adjusting for the effects of inflation, a long-term investment in Silver Dollars provided a very handsome return of 7.65%. Now while that doesn’t sound like a tremendous amount for a single year, keep in mind that is a steady increase every year for the past 70, with no declines or pauses.

We should also note that while a good portion of the total is made up by the 1893-S, its large increase was typical of other rare date Morgans, and our use of the MS-63 price was a conservative approach. The current Guidebook lists an MS-65 at $650,000, and one could certainly have purchased one of that quality for a tiny premium over a lesser example in the early years of our study.