Why did they melt proof coins in 1861?
RYK
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I have read some rendition of the following at least a dozen times:
As with all silver proof coinage dated 1861, this Civil War issue is rarer than generally assumed. The listed proof mintage is 1,000 pieces, but its been reported that at least 600 of those went unsold and were later melted.
The above is from the Pinnacle inventory description of an 1861 silver dollar.
While I can understand why many proof coins went unsold in 1861, why not just toss them into circulation? Why melt them, only to have to make additional circulation strike coins in 1862? Seems like a waste of effort, time, materials, etc. to me. Is there a reasonable explanation for all this?
As with all silver proof coinage dated 1861, this Civil War issue is rarer than generally assumed. The listed proof mintage is 1,000 pieces, but its been reported that at least 600 of those went unsold and were later melted.
The above is from the Pinnacle inventory description of an 1861 silver dollar.
While I can understand why many proof coins went unsold in 1861, why not just toss them into circulation? Why melt them, only to have to make additional circulation strike coins in 1862? Seems like a waste of effort, time, materials, etc. to me. Is there a reasonable explanation for all this?
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The same thing holds true for left over commemorative coins that are not sold. In those instances where the leftovers were put out into general circulation (Columbian half dollar, Monroe etc.), it had a bad affect on the after market.
To finance the enormous cost of the war, the Union at first tried to borrow gold (by issuing bonds). Unfortunately, early Union defeats made that impossible and gold coins were hoarded, disappearing entirely from circulation by the end of 1861 (except in California).
Some silver continued to circulate, until the ocean of greenbacks began to appear in April 1862. The gold value of greenbacks began falling immediately, leading to the hoarding of silver coins, too. By mid-1862, all silver coins had disappeared from circulation.
So, assuming that the proof silver coins were left in the Mint's inventory at the end of 1861, they wouldn't have just released them into circulation because very little silver was actually circulating at that time. (And, after the Civil War, the Mint only sold proof coins for gold, or a premium price in greenbacks.)
By 1862, the Philadelphia mint would have only struck silver coins to order, when a depositor brought silver to the Mint for coinage and then the coins would have been almost immediately exported.
Check out the Southern Gold Society
Can anyone trace the comment about 1861 proofs being melted to contemporary documents?
When you write the book covering it, I will buy it.
issues of February 1967 and March 1966. On the other hand the 1862 proof coins (silver set ) did not sell out and were in fact sold to
collectors in the mid 1870s when discovered in the coiner's vault.
It is not clear why the sets were melted but silver coins circulated normally until June 1862. Mint Director James Pollock may simply have
felt that it was easier to melt them than to keep track of differing numbers of coins. In 1860 and 1861 collectors could order individual
pieces and did not have to buy complete sets as was true beginning in 1862.
Denga
Great post! Stick around and post more often.
<< <i>While I can understand why many proof coins went unsold in 1861, why not just toss them into circulation? Why melt them, only to have to make additional circulation strike coins in 1862? Seems like a waste of effort, time, materials, etc. to me. Is there a reasonable explanation for all this? >>
While DaveG's explanation is possibly the real answer, I am a government non believer in what they tell us about just about anything. For instance when it comes to melting coins such as the 1861's, who was there to note that it did happen. Why they melt some things and then replace them is standard government job preservation. What the Mint does and when they do it would only be known by the Mint people themselves and the stories they release to the public is as trustworthy as to where our tax dollars go.
Modern researchers look for original operating records - the kind of day-to-day routine reports that describe what has happened. Then, you build from there. Getting these in sufficient quantity to understand what happened for the mid-1860s and earlier is very difficult.
<< <i>Denga,
Great post! Stick around and post more often.
Indeed. I read Denga's other post and s(he) is clearly a world class numismatic researcher.
in 1966. The information was derived from consulting original Mint internal records which show what happened
very clearly. In point of fact, the Mint itself did not even know how many proof coins were made in 1860
and 1861 until researchers published this information in the 1960s. The proof figures for 1862 onwards
were first printed in the late 1940s as the result of a request to the Mint Bureau by Lee Hewitt, editor
and publisher of the Numismatic Scrapbook Magazine; a few of these figures have since proven to be in
error, however.
It is worth noting that the original fiscal records of the 1860s were subject to quarterly audits by a special
bureau of the Treasury Department. These audits still exist at the Archives and may be consulted by
researchers. This was true not only for the Mint but all government departments. In 1840, for example,
the auditors disallowed a payment to Robert Ball Hughes for modifying the obverses of the silver coins.
Mint Director Robert Patterson had to spend considerable time and energy in getting this payment
approved as legitimate Mint business.
Denga
<< <i>Tossing the Proof coins into circulation would have sent a bad message to those had paid the premium prices for them from the mint. How would you have felt if you paid the equivalent of a day’s wages as a premium for Proof coins only to see them released to the public at face value? Melting them is only fair thing to do.
The same thing holds true for left over commemorative coins that are not sold. In those instances where the leftovers were put out into general circulation (Columbian half dollar, Monroe etc.), it had a bad affect on the after market. >>
Well said Bill
Go BIG or GO HOME. ©Bill
<< <i>Tossing the Proof coins into circulation would have sent a bad message to those had paid the premium prices for them from the mint. How would you have felt if you paid the equivalent of a day’s wages as a premium for Proof coins only to see them released to the public at face value? Melting them is only fair thing to do.
The same thing holds true for left over commemorative coins that are not sold. In those instances where the leftovers were put out into general circulation (Columbian half dollar, Monroe etc.), it had a bad affect on the after market. >>
That would seem to be the case from a modern perspective, but in the mid-19th century (and until much later) there was little or no collector premium on proof coins. The number of active coin collectors - people who would pay a premium for a rare coin or were collecting year sets, etc. - was very small. Proofs were made for collectors and sold to collectors at a small premium. (In the 1890s, minor sets sold for 2-cents over face value, the 4-piece silver set was $2 with the minor coins sometimes included. The expense was not in the premium for silver and gold, but in the face value of the coins.) Once collectors of the day had a chance to buy current proofs, the rest were put into circulation. There was nothing unfair about this since all the “real” collectors had already had a chance to update their collections. If someone wanted to pull a proof from circulation - accepting that it would very likely be damaged from use - that was ok: "real" coin collectors had already gotten their special coins from the mint. Neither the “pristine proof” nor one plucked from circulation carried much value beyond its denomination. Occasionally, perfect proof specimens sold at auction for less than circulation strikes - after all, anyone could buy proofs from the mint, but few bought perfect circulation specimens from the mint.
Had the proofs carried a substantial premium, as was the case with commemorative halves that sold for two or three times their face value, then I suspect collectors (and ordinary citizens who had bought the commemoratives in good faith) would have been upset about quantities of proofs dumped into commerce. One of the reasons given by A. Piatt Andrew in 1910 for making satin gold proofs (called “bright” by the mint) instead of sandblast gold proofs was that the sandblast gold looked too different from normal coins to be put into circulation, thus forcing the mint to melt any unsold pieces. (They melted 399 unsold sandblast gold sets in early 1909.) A similar reason was given by Adam Joyce in 1916 for discontinuance of all collector’s proofs – sandblast silver coins were too distinctive to be put into circulation and matte minor coins were too similar to be of interest to collectors and not popular.