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Rare Coins and Politics

A Scandalous Coin

Politics and rare coins might not seem to go together, but they are linked throughout the history of the United States. From the first coins of the 1650s to the change you carry in your pocket today, political influence has been a significant part of United States coinage.

The first coins struck in what is now the United States were minted in 1652, more than a century before the "United States" existed. The Massachusetts Bay Colony struck silver coins from 1652 through about 1682, yet all but one of the denominations always carried the date 1652 regardless of the actual year of issue. Why? Politics. Since the coins were minted openly, there was real intent to fool the British Crown into believing that all of coinage in circulation was actually minted in 1652, when there was no monarchy. Instead, it was probably a courtesy. The colonists were saying: "We're going to continue to mint our own coins while not appearing to flagrantly ignore your edicts."

In 1665, after receiving a book of laws from the colonists, the King's Commissioners requested that a number of laws be changed or repealed. Among them was the following: ". . .title money, the law about a mint house, etc., be repealed, for coining is a royal prerogative, for the usurping of which yet act of indemnity is only a salvo."

Salvo? More like a salvation, as the coins were desperately needed in the colonies. It was time when wampum, musket bullets, and counterfeit foreign coins were used as money alongside the few legitimate coins that were available. The colonists ignored the request of the Crown, evidently without penalty.

The Civil War of 1861-65 presented tremendous problems for circulating coinage. The silver half dime was one of the many denominations that wasn't circulating, and the five-cent fractional currency was considered to be a poor substitute. A solution to the problem was a coin of a new metal, and coins struck in nickel were introduced.

Nickel is impractical for coin production, as its hardness is conducive to laminations, die breaks, poor strikes, and many other problems. When James Pollock, director of the Mint in 1865, proposed a new nickel alloy for coinage, he was under the influence of political pressure. His personal preference was for coins made of French bronze, but nickel magnate Joseph Wharton had many friends in Congress, and the new nickel alloy won out. Nickel had been used in the copper-nickel cents of 1856-64, but the demand or nickel became unprecedented with the introduction of the three cent nickel (1865) and the five cent nickel (1866).

Nickel coins are still struck today, of course, and many of the problems are just as prevalent. Try putting together a set of problem-free Jefferson nickels, let alone such series as Buffalo nickels or Shield nickels.

The political clout of the followers of the late Anthony Comstock led to a significant change in our coinage in 1917. Hermon MacNeil's magnificent Standing Liberty quarter design, first introduced in 1916, was beautiful and popular. It was also scandalous, at least to the highly vocal Society for the Suppression of Vice. Treasury Secretary William McAdoo was bombarded with complaints about Miss Liberty's partial nudity, and in mid-1917 the design was modified to cover the lady. It is often argued that there were other reasons for the change, such as 1) the type one coins wouldn't stack, or 2) the chain mail placed on Miss Liberty was a symbol of war, or 3) it was done so the coin would strike up better. Argument #3 is totally invalid, as the type one Standing Liberty quarter is consistently far superior in strike to the type two. The other two arguments have a degree of credibility based on surviving documents, but the most important reason for the change was almost assuredly a case of "comstockery" as the prudery was labeled by prominent writers of the era.

While the incidents of coins mixing with politics mentioned above are famous ones, perhaps no other case can quite compare to the Morgan dollar. The Mint Act of 1873 abolished this denomination, along with the other issues such as the three-cent silver and the half dime. By 1878 the silver dollar was back as the result of extreme political pressure from the silver interests, such as the owners of the gigantic Comstock Lode, a monumental silver mine in Nevada. Overriding a presidential veto, the Bland-Allison Act of February 28, 1878 provided that the government would purchase $2 million to $4 million in domestic silver for coinage into silver dollars. It took less than two weeks for the new design to be approved, the dies made, and the first proofs struck.

The Sherman Silver Purchase Act set the amount of silver to be purchased monthly at an exact figure-187 tons per month. When the act was repealed in 1893, the mine owners were rich and the Treasury vaults were overflowing with unneeded silver dollars. It wasn't until 1898 that legislation provided for the disposal of the remaining silver through continued silver dollar mintage. In 1904, the silver finally ran out in 1893, the mine owners were rich and the Treasury vaults were overflowing with unneeded silver dollars. It wasn't until 1898 that legislation provided for the disposal of the remaining silver through continued silver dollar mintage. In 1904, the silver finally ran out, and Morgan dollar production ended for 17 years.

The story of the Morgan dollar was nearly finished-but not quite. In 1918 the Pittman Act was instituted, which required the melting of up to 350,000,000 silver dollars. A little over a quarter of a billion-that's right, billion-were actually melted, but political pressure caused another weird scenario. The silver lobby persuaded Congress to include a clause that domestic silver be purchased to replace the silver dollars lost in the melting. What was this silver used for? Starting in 1921, it was used to mint silver dollars!

Coins and politics. Politics and coins. After nearly 350 years, they are still inextricably entwined, an integral part of our past and an inevitable part of our future.

The three-cent nickel: the alloy won out over silver

“You shall not crucify mankind on a Cross of Gold!”

Those were the words of William Jennings Bryan at the Democratic Convention in 1896, and a crowd of 20,000 delegates and party supporters cheered him on. The presidential candidate was only 36 years old at the time, but the speech vaulted him to the forefront of the party and won him the nomination. As famous as the speech is even today, there is still some confusion over what the controversy of “Free Silver” was all about.

Under Grover Cleveland the federal gold reserves had fallen to nearly zero, and J. P. Morgan was called in to bail out the government, which backed its paper money with these nearly non-existent gold reserves. Morgan made a gigantic profit from the government bonds he received in payment, and the public perceived that Cleveland was in cahoots with the devil himself.

With Cleveland politically dead, Bryan took the opportunity to push the Populist platform that proposed equal footing for silver as a currency reserve. The noted historian Kenneth C. Davis, in his book Don’t Know Much About History, explains it this way: “’Free Silver’ became the new Populist rallying cry, a demand to return America to a standard using both silver and gold coins.” As superb an historian as Davis is, he doesn’t have the facts quite right on this one.

Gold and silver coins already had equal footing in 1896, but only gold was being used for reserves, and the intrinsic value of the gold coins was greater than that of its silver counterparts. The silver interests (mine owners, etc.) wanted to make silver coins bigger, for one thing, and anyone who has seen some the so-called “Bryan money” from that era can attest to the oversized coinage that was proposed. Secondly, if silver became 50% of the national reserves then demand and prices would soar.

“Free Silver” was the solution to the country’s economic woes, or so it was thought, and Bryan and the Democrats/Populists nearly rode the wave into the White House before losing to Republican William McKinley.

Bryan’s brilliant verbal skills carried him to two more nominations, both unsuccessful. Today he is perhaps best remembered as the prosecuting attorney in the famous “Monkey Trial,” when a Tennessee schoolteacher named John Thomas Scopes was prosecuted for teaching evolution in the public schools. Bryan won an empty victory in that trial, and died soon afterwards.

Did you know that the beloved Mercury dime is actually a symbol of fascism? Wait, don’t throw away your beautiful set until all the facts are in! We live in a world of change, and nothing changes as fast as the American language. On the reverse of the Mercury dime there is a fasces, which is a bundle of rods bound around an ax. In Roman times, it was a symbol of authority, and it made a wonderful representation of America’s power when it was introduced on our coinage in 1916.

To quote once again from Kenneth Davis: “When Benito Mussolini adopted the term [fascism], he used it quite proudly. In 1925, Mussolini installed himself as head of a single party-state he called fascismo. While most of Europe disarmed [after the First World War], Mussolini rearmed Italy during the twenties. Mussolini saw military adventurism as the means to keep the Italian people loyal, and Italy embarked on wars in Africa and in support of General Francisco Franco’s Spanish rebels.”

From Roman times until the early 20th century the root word “fasces” and its derivatives shared a positive connotation. Mussolini changed that forever, and today the word “fascist” carries a strongly derogatory meaning.


Article provided by Joel D. Rettew / FastCoin.com.

 
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