The history of American silver dollars actually predates the American revolution.

The Massachusetts Bay Colony began issuing paper money in 1690, which ticked off the British. In response, they passed the British Currency Act of 1764, which made Colonial currency illegal.

In many ways, the Currency Act was the straw that broke the camel’s back, because not only did it prohibit the colonies from printing their own money, it required the colonists to pay their taxes in gold or silver.

Eventually, this would prove to be a hardship that the colonists were unwilling to endure. Before long, they were dumping tea in Boston harbor. And a Continental Congress was formed. One of their first acts was to issue money to finance the revolutionary war.

The Continental Congress authorized the issuance of paper money called the Continental. But because the currency wasn’t backed by anything but promises, it never really caught on.

The French agreed to send silver bullion so that a dollar coin could be produced. In response, the colonist quit producing the continental. But the silver never arrived, and the Americans had to rely on foreign currency. The most popular was the Spanish piece of eight, minted in Mexico from South American silver.

By the 1780s, several colonies were producing their own copper coins. But the situation got so out of hand that fixing it was a top priority for Congress when it convened in 1792.

A Coinage Act was passed that same year that authorized a salary for a Director of the Mint. That summer, the first stone was laid at America’s first mint.

Photo above: Flickr pagedooley

Because there was no steady supply of bullion, the production of coins was inconsistent.  But in October of 1794, the newly formed U.S. mint produced 1,758 of the first U.S. silver dollars.

The silver dollars produced in 1794 and 1795 were Flowing Hair silver dollars.  Draped Bust silver dollars were produced between 1795 and 1804.  Thomas Jefferson suspended production of the coins in 1806.

Production of silver dollars didn’t resume again until Seated Liberty silver dollars were issued in 1840.  These were produced in relatively small numbers until 1873.

In the late 19th century, the U.S. began trading more with Asia.  But the Chinese preferred the Mexican peso to the U.S. silver dollar because it contained more silver.

To conduct business in China, American traders had to exchange their dollars for pesos.  What’s worse, they had to pay a commission on the transaction.

The logistics were so unwieldy that in 1873, Congress passed a Coinage Act that authorized the minting of a new silver dollar that had 420 grains of silver -- slightly more than the peso.

The design by William Barber included some subtle and not-so-subtle  messaging.  The silver content of the coin appears on the reverse below the eagle.   Lady Liberty sits on a bale of cotton and holds a sheaf of wheat -- America’s two most important crops at the time.  And Lady Liberty faces left, or west, towards the East.

Before long, U.S. Trade Dollars were the preferred currency in China. 

Unfortunately, the flood of silver from the Comstock Load caused the price of silver to plummet.  And by 1876, the silver in the dollars was only worth around 80 cents.

Production stopped in 1878, but proofs for collectors were minted starting in 1879.  The ten minted in 1884 and the five minted in 1885 are some of the most valuable coins in the world.  In 2006, an 1885 proof sold for $3.3 million.

To prop up the price of silver, Congress passed the Bland-Allison Act in 1878.  It required that the U.S. Treasury purchase $2 - $4 million of silver bullion every month.  The bullion would be turned into silver dollars and George T. Morgan, the Chief Engraver of the U.S. Mint, designed the coin which now bears his name.

Thanks to its elegant, timeless design, today, the Morgan silver dollar is one of the best loved and most collectible American coins. 

Production of Morgan silver dollars stopped in 1904, and was resumed briefly in 1921.  But the story doesn’t end there. 

A series of acts, pushed through by the powerful silver lobby -- the Sherman Silver Purchase Act of 1890, the Pittman Act of 1918, and the Silver Act of 1942 -- resulting in the melting down of millions of silver dollars.  In fact, more the 80% of the Morgan silver dollar that were minted no longer exist.   Because of this, there are valuable Morgan silver dollars with original issues greater than a million.

In 1962, The U.S. government had more silver dollars than they knew what to do with.  So they sold bags of 1,000 coins for face value.  Previously rare, uncirculated coins came on the market, and their value tanked.

Most of the remaining Morgan silver dollars, including many minted in Carson City, were sold off by the General Services Administration in the early 1970s.  Those in the original GSA packaging are popular with collectors.

There are several Morgan silver dollars worth more than $500,000.  Coins from Carson City and San Francisco -- particularly 1893, 1895, 1896, 1903, and 1904 -- are among the most valuable.

To comply with the Pittman Act, 86 million Morgan silver dollars were minted in 1921. But American leaders wanted a coin to commemorate the end of World War I. So President Warren G. Harding commissioned an open competition to design the coin.

Nine artists competed, and an Italian immigrant named Anthony de Francisci won. His wife, also an Italian immigrant, was his model.

The first Peace dollars were minted in December of 1921. Production was steady, and by 1928 enough coins had been minted to satisfy the requirements of the Pittman Act. Some additional Peace dollars were minted in 1934 and 1935 to cover silver certificates -- paper dollars that can be redeemed for silver.

Photo below: Flickr wikicoins user james

U.S. silver dollars are exquisite, little slices of history and art that you can carry in your pocket.   Silver is a beautiful metal.  And there’s something so great about feeling the relief in your hand.

It’s easy to get started, and you can buy a nice coin for as little as $20 or $30.  There are several ways to build a collection.  Choose coins from one mint, or collect coins from the same year from every mint.  This will cost more, but you’ll have a desirable collection. 

Make sure you know the fair market value of any coin you buy.  And be especially careful regarding condition.  This is where unscrupulous dealers can take advantage of beginners.