Sponsored by Democratic Senator from Nevada, Key Pittman, the Pittman Act of 1918 “authorized the conversion of not exceeding 350,000,000 standard silver dollars into bullion and its sale, or use for subsidiary silver coinage, and directed purchase of domestic silver for recoinage of a like number of dollars.”
The main reason for the passage of this act was the need to finance the Great War in Europe. Wars require troops, armaments, and munitions, and all of that requires money. Gold quickly became scarce as all money of intrinsic value does during war, but America had quite a lot of silver dollars in circulation. There were far more than were being used for commercial needs, although eventually America’s entrance into the war did create a demand for all coins.
In 1918, the Germans attempted to weaken Great Britain by spreading rumors that the British could not back its silver certificates. This led directly a monetary crisis in India, and Britain bought up U.S. silver bullion in order to stabilize that situation and prevent a run on banks. The U.S. facilitated this purchase to help its ally. The Pittman Act resulted in the melting down of nearly half the silver dollars minted by under the jurisdiction of the U.S. Government to date. Of the 270 million total, 259 million of these were melted down and sold to Great Britain for this purpose.
Mining companies benefitted from the Pittman Act because every coin melted down and sold had to be replaced by a new coin made from mined silver, according to the Pittman act. Nevada’s nickname is “The Silver State,” a moniker that arose because of the 19th century Silver Rush. Silver could literally be scooped up from the ground then for a brief period of time.
In 1921, the Mint began producing Morgan dollars again in record numbers, but that coin was quickly superseded by the Peace dollar to commemorate the end of World War I. When in 1928, enough silver dollars had been minted to replace the supply of what had been previously melted down, the Mint stopped production. Although the Peace dollar made one more appearance in 1934, the complete run consisted of only 24 coins.
Coin collectors may wonder how many of each issue of Morgan dollars were melted down, but that is a mystery that will never be solved. The U.S Government wanted ounces of silver to melt into bullion, and was not worried about the historic or numismatic value of the coins it destroyed.
If you are looking for a specific Morgan or Peace dollar or would like assistance with your collection of any rare coin, please contact Grand Rapids Coins today. We are here to help you.