In more than 25 years investing in premier rare coins, a few legendary coins come to mind. These are the "classics" –coins that have literally made fortunes for some of the richest investors and collectors in America. These select few coins are timeless beauties. They’ve held their value for decades… continue to be loaded with appreciation potential…and should be part of any rare coin portfolio. Among the "classics," one of my all time favorites is the stunning Morgan Silver Dollar.
Born From the Ashes of the Civil War
Perhaps no coin I know has such a rich tapestry of history behind it, including politics, war and social unrest, like the Morgan Silver Dollar.
Although this coin didn’t appear until 1878, its story actually begins in the early days of the Civil War. At that time, people in the Confederacy hoarded silver and gold coins. They understood the importance of currency with intrinsic value.
But the United States pulled precious metals out of circulation. They needed the gold and silver to pay off wartime debts and interest on loans, including those from European countries.
Even so, a surplus of silver started to build up. This was due to: 1) the discovery of a great storehouse of silver at the Comstock Lode; and 2) the fact that the newly unified Germany under Otto Von Bismarck, went on the gold standard and dumped tons of silver on the open market. Naturally, silver prices dropped.
By that time in this country, there were powerful men who owned sizable interests in the Comstock Lode; men such as Stanford, Ralston, Crocker, Hearst and Sutro.
These "Silverites," as they were known, were alarmed at the drop in silver prices, so they pressured Washington to do something about it. The government tried minting a silver dollar to be used only for trade with the Far East. This siphoned off much of the surplus silver. But it wasn’t enough.
So, in 1878, Congress mandated the creation of a brand-new silver dollar. It also required the government to buy between two and four million dollars worth of silver each month to make the coins. To create this coin, Mint Director Henry Linderman hired an engraver from England by the name of George T. Morgan. Morgan’s hiring infuriated the Chief Engraver at that time, a cantankerous man by the name of William Barber.
Barber was so incensed that he was not asked to design the coin, he did everything he could to sabotage Morgan’s efforts to design a new silver dollar. He even said there was no room for Morgan to work in the mint. So, Morgan created most of his designs at the boarding house where he was staying.
The Face That Launched a Million Coins
During that time, Morgan met a respectable, local schoolteacher by the name of Anna Williams. She had the kind of classic beauty he needed for the face of Liberty.
At first, she refused: Proper young women of the time didn’t model for artists. She later agreed when she considered how her likeness would be used.
The result was a coin of timeless beauty and value.
So, the surplus coins were bagged and kept in vaults.
The Silverites sensed that these indeed were special coins, so they bought up hordes of them.
When the price of silver rose once again, these already wealthy investors multiplied their fortunes.
Today, the Morgan Silver Dollar can be the foundation of any portfolio — as an investment, part of a collection, or as a way to preserve money in times of inflation or instability.
How a $40 investment became the richest silver "strike" ever discovered in America
One of the key sources for the enormous amount of silver needed for the Morgan Silver Dollar was the legendary Comstock Lode.
The story of the Comstock Lode begins in 1857 when a prospector, by the name of Henry Comstock, was seeking gold in the eastern slopes of Mt. Davidson, not far from Reno, Nevada.
Comstock soon encountered a problem that all gold prospectors had. When they were working their claims, a blue sticky mud kept sticking to their picks and shovels. But they wanted gold so badly, they were willing to put up with "that dang blue stuff."
Why the "Blue Stuff" Became a Fortune in Silver
As it happens so often throughout history, in their zeal to pursue one opportunity, people tend to overlook or ignore a greater opportunity. So, when the gold started getting scarce, and Comstock thought the value of the mine was diminishing, he sold it for $11,000. Never one to hold on to his earnings, he drank and gambled away even that small sum. Henry Comstock died penniless.
Another prospector sold his claim for $40 to George Hearst, the father of William Randolph Hearst, and ran down the mountain announcing " I tricked the Californians." That $40 investment became one of the richest mines in the West, creating one of history’s legendary fortunes.
What none of the prospectors knew, was that "the Californians" were actually shrewd businessmen who recognized the true value of the mines.
One day, a local rancher was walking past one of the mines and saw piles of the blue mud the prospectors kept throwing away. He picked up a sample and took it back to San Francisco to have it assayed. As it turned out, this muck that was plaguing the miners in their quest for a few flecks of gold was actually high grade silver ore. It wasn’t long before a group of San Francisco investors began quietly taking over claim after claim.
Nearly $100,000,000 of Silver Taken in Just 3 Years!
Once the California interests bought out many of the mines, the Comstock Lode started producing silver in great quantities. At that time, the techniques for refining silver were quite crude. They used a mercury amalgam, which not only poisoned the rivers, but left half of the silver behind. Since the ore was so rich, no one seemed to care.
In fact, the mines were so productive that President Lincoln pushed through statehood for Nevada even though it didn’t have the population required by the Constitution. The gold and silver from the state helped the North pay for their effort in the Civil War.
Then one day, in 1873, miners discovered a vein of rich silver ore about the thickness of a knife blade. As they followed the vein, it gradually widened. Eventually, this thin ray of hope became a vein 320 feed wide. The ore was so rich, that they had to mix it with waste rock in order to process it.
In 1875, the vein produced a whopping $25,000,000. In 1876, $32,000,000. And in 1877, the richest bonanza year ever, the take was $36,000,000.
In all, the wealth from the Comstock Lode was the source of some of this country’s most legendary fortunes. It helped save the Union... build the nation’s railroads... and provide silver to produce the stunning Morgan Silver Dollar.
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