The History of the Silver Morgan Dollar

The Fourth Coinage Act worked to end the run of the silver dollar which at the time was a seated Lady Liberty, designed by Christian Gobrecht. The Act also served to provide competition to the Mexican trade-dollar which was widely used in the Orient. Bullion producers could now bring bullion into the Mint Department, and have it cast into bars and transformed into the new authorized trade dollars for a minuscule fee. Originally, trade dollars held the status of legal tender. In 1876 this status was later revoked. The revocation was designed to prevent bullion dealers from generating profits when silver values were low.

Initially these restrictions on no-cost coinage laid out in the Coinage Act met little resistance from the silver mining interests. However, that changed once the price of silver began to rapidly decline because of the ever-increasing mining. In western parts of the United States, protests began to pour in from manufacturers and bankers. Protests also came from farmers. These groups felt the increase in the money supply would actually serve to have a very positive influence on the economy. To combat the issue, 1873 "Free Silver" groups began to pop up in order to promote inflation of the dollar by demanding that silver once again be coined for free. They felt they had learned from experience from the "panic" in 1873 that had caused the original Coinage Act to be introduced into Congress.

And so, in 1876, Missouri democratic senator Richard P. Bland introduced a bill into the House of Representatives that would resume free coinage of the regular silver dollar, and Iowa republican senator William B. Allison added amendments on the bill that eliminated this provision while it was in the Senate. The Bill was passed in the fall. The Bill also allowed for the first time, the questionable practice of using paper silver certificates that represented a stored amount of silver.

Interestingly enough, the Bill was immediately vetoed. President Rutherford B. Hayes saw the veto overridden on February 28, 1878. This became known as the Bland-Allison Act and it required the Treasury to purchase from two to four million in silver monthly. It was to be changed into silver dollars at the previous gold/silver ratio of 16:1, making a gold ounce equal to sixteen ounces of silver.

By October of 1877 Linderman wrote a letter to Mint superintendent James Pollock asking him to:

"Instruct Mr. Morgan to prepare without delay, dies for a silver dollar with designs, inscriptions, and arrangement therof to be the same as the enclosed impression for the Half Dollar and numbered '2' substituting the words 'one dollar' in place of 'half dollar'."

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