Dollars Lost and Found

It was the greatest treasure in U.S. numismatic history, and the best part was that anyone could have had a portion. The downside was that you needed $1,000. There was no risk involved, though, as you received 1,000 silver dollars for your money. It was almost like a grab bag, as you had no way of knowing what dollars you might get. It was the great Treasury silver dollar stockpile, which over the years supplied the market with a huge percentage of the Morgan dollars that are bought and sold today.

The Treasury sale of dollar bags for face value reached its climax during the period from 1958 to early 1964, when the sales of $1,000 silver dollar bags halted. During that period the Treasury stockpile dropped over $200 million. No one could have made an accurate inventory even if they had the desire. Today, we are still trying to determine what Morgan dollars were paid out, and in what numbers.

The sudden appearance of $200 million in silver dollars turned the numismatic world upside down. Seemingly overnight, previously rare dates like the 1903-O, 1898-O and 1904-O were available. And other dates, like the 1895-O, became even better, as they were not found in the stockpile. Carson City coins would emerge later – in large numbers in the case of some dates. It would take years before any real sense could be made of the Morgan dollar market and the availability of some coins.

It was natural that during the years that followed, the focus of many was on the Morgan dollars found in the Treasury stockpile. They were, after all, the largest single group in the vaults. But almost overlooked is that the Treasury contained other silver dollars – coins that met very different and interesting fates, which still influence the market today.

It is worth considering how the coins ended up in the Treasury vaults next to the White House. Since 1878, roughly 550 million Morgan dollars had been produced. In the early 1900s it was estimated that about 50 million were in use, leaving about 500 million in the vaults. That total was reduced by the Pittman Act, which allowed for the melting of up to 350 million. The silver dollar, however, was needed as backing for Silver Certificates – meaning that many of the melted coins had to be replaced. That saw Morgan dollars minted again in 1921, followed by the introduction of the Peace dollar.

The new dollars produced from 1921 through 1935 were not needed for circulation. There were still plenty in the vaults. Small numbers of the new Peace dollar would be released into circulation, but realistically, many of them would join the Morgans already hidden away.

What we know of the hoard in Washington’s Treasury building is that it was assembled slowly. Around the turn of the century, dollars in the Carson City vaults were shipped to Washington. Decades later (probably in the latter part of the 1920s), dollars located in New Orleans made their way to Washington as well. In both cases there would have been no Peace dollars, as they came along too late to be produced either at Carson City or New Orleans.

Peace dollars, which would be the second largest group found in the Treasury hoard, were still sitting in vaults at the various mints. When demand arose, they were shipped out for use. Much of the demand from the 1930s through the late 1950s came from Nevada and the casino industry. Once a $1,000 bag of silver dollars was opened and paid out in a casino, those coins would quickly become circulated. That happened repeatedly.

Also at that time, there were very few collectors or dealers focusing on silver dollars. Even if a $1,000 bag of a potentially better date appeared, the number actually saved might well be very small. No one had use for large coins, as most collectors of the period were concentrating on lower denominations.

We have no proof, but it stands to reason that as they were the last dollars placed in the vaults, Peace dollars would have been in the front. As a result, they would have been more likely to be paid out first, well before the rush on the Treasury began around 1958. There were still Peace dollars paid out in the period from 1958-64, but those were generally the higher mintage early dates.

It was not a case where the key dates in MS-65 (like the 1928-S and 1925-S) were never reported to have been found in bags. Those bags appear to have been paid out earlier, at a time when few collectors would have bothered to save many nice samples. We know those bags were paid out, simply because they were found in the Redfield Hoard. The coins in those bags were oftentimes poorly struck, bagmarked or even damaged by counting machines. It leads to a simple conclusion – that at one time, Peace dollar dates which are seen as better today were available. However, they were not a part of the final group in the stockpile, having been paid out earlier. Also, conditions were less than ideal for top-graded coins to be saved in large numbers.

The one particularly mysterious Peace dollar date is the 1921. This date had a relatively low mintage of 1,006,473. And as a new design, it would have been saved. To that was added the fact that in 1922 there would be slight design changes, including a lowering of the relief. Rumors circulated that the 1921 would be recalled, as it was said the coins did not stack properly. That rumor would have produced some additional saving. According to all reports, the 1921 is the one Peace dollar date that was never reported in the Treasury stockpile. It’s ironic, because the 1921 had been available at the gambling tables in Nevada.

Another silver dollar initially in the Treasury stockpile met an early and tragic fate. There are pictures inside the Treasury vault clearly showing bags of Lafayette commemorative silver dollars. The total number was placed at 14,000 pieces. The official indication is that those 14,000 commemoratives were melted in 1945 – just before famous coin dealer Aubrey Bebee was able to make an offer on the coins. The Lafayette dollar is one case where a surprising dollar was both found – and then lost – in the Treasury holdings.

If there was one most surprising discovery from the Treasury holdings (other than rare date Morgans suddenly becoming available in large numbers), it would have been the small numbers of Seated Liberty dollars. Found inside some bags of circulated coins were circulated Seated Liberty dollars, which had last been produced in 1873. Q. David Bowers was involved, and reported that after going through approximately $10,000 in Seated Libertys, he had found none in Mint State, as well as no rare dates. There had, however, been some better dates. The simple fact that there were any had to be a surprise.

The real debate over the Seated Liberty dollars in the Treasury stockpile is whether or not there were any Mint State bags. Just the thought of a Mint State bag of dollars potentially dating back to the Civil War is exciting. Once again, Q. David Bowers has been a leader in the research. There have been reports of bags with the 1871 and 1872 dates. Such reports are likely, as those were the only two Seated Liberty dates to have mintages over 1 million pieces. If any Seated Liberty dollars were in the Treasury stockpile, the 1871 and 1872 would be the likely suspects. Bowers, however, has found no solid basis to assume those bags existed. Today, the two dates are available in approximately the numbers one might expect in Mint State – considering their mintages.

It does appear, however, that there might have been Mint State bags of two large-mintage New Orleans Seated Liberty dollars – the 1859-O and 1860-O. Realistically, there is no absolute proof. But there are reports of bags, and these two dates show numbers available today in Mint State that might suggest a slightly higher than expected supply. Bowers concludes in his book American Coin Treasures and Hoards that there might have been a bag of the 1859-O, and perhaps a couple of the 1860-O, in the vaults.

If Bowers is correct, the possibility that Mint State bags had survived for over a century is remarkable. It may not be the most valuable discovery in the Treasury stockpile, but it has to rank among the most interesting. It must be remembered that the New Orleans Mint was seized in early 1861 by troops representing the state of Louisiana. The facility was then used to make additional half dollars and double eagles. Those bags of 1859-O and 1860-O dollars must have made their way to Washington or Philadelphia before the facility was seized, as surely troops making other denominations would have taken the dollars. We cannot be sure of what actually happened. But certainly if you hold a Mint State 1859-O or 1860-O Seated Liberty dollar today, you are likely to be holding a coin from those bags. This makes it a fascinating coin with a great story of escape from the South just prior to the Civil War.

The assorted tales of dollars lost through melting and other dollars found make the Treasury stockpile not just the greatest bonanza in numismatic history, but also one of the greatest continuing mysteries.