The 1881 silver dollar – a perfect solution

The 1881 Morgan silver dollar was born into an America which saw the first telephone company formed, along with the Sioux Chief, Sitting Bull, surrendering to US troops in Montana.

Together with the assassination of president Garfield, electric street lights being switched on in Britain, to illuminate the first town to get them, at night, and the gunfight at the OK Corral, in Tombstone, Arizona – 1881 was quite a momentous year.

Morgan silver dollars had been in circulation for a couple of years at this point – and had proved to be very popular because of their size and utility.

They were not easily lost, were heavy and large – and because of this they were useful in the rough-and-tumble of everyday life, where horses were the norm for travel and things could easily fall out of pockets and saddlebags – especially if you were in a hurry.

The silver dollar coin was perfect for the time. Horse based travel was hard, long and slow. Silver coins were easily transportable and because they were not as valuable as gold coins, did not make you such a target for robbery and were a universal means of exchange across the United States. The dollar value meant that the coin was not too big an amount to give change for – but not too small an amount to be useful in everyday exchanges.

Silver lining

The design of the 1881 Morgan dollar was identical to the original release in 1878.

With a silver content of 90% and a weight of .7735 ounces, the average value of a Morgan silver dollar today is somewhere around $30. In good state one could fetch around $625.

The melt value of such a coin would be the spot price of silver right now. Any numismatic value over this is the additional coin grading value placed on the coin.

This is known as “Numismatic Value versus Intrinsic Value.”

Should the value of silver (the intrinsic value) drop there is still a value to the coin. This means that the coin with a numismatic value is a good long-term investment.

Of course, should the value of silver rise, it may be the case that the melt value, at the time, is more than the numismatic value of the coin.

The reason this is important for the 1881 silver dollar is because the US Mint was still establishing itself. The Carson City mint was not producing as many coins for circulation as its other mints.

Today, this means that there are fewer examples of Carson City minted 1881 Morgan silver dollars floating around, and this makes them more valuable than, say, the same coin with a Philadelphia or San Francisco mint mark.

It goes without saying, but the better the condition of the coin, in terms of its clear, clean strike, luster, and general condition, the higher the price the coin will fetch. Morgan dollars in an extremely fine mint state can fetch thousands of dollars.

Silver prices are largely irrelevant to such coins – if your coin is worth $50,000, the fact that the silver is worth around $16 is immaterial really.

The pot of silver at the end of the rainbow

One of the old design quirks which crept into the manufacture of the Morgan silver dollar is the effect known as “rainbow toning.”

This is a metallurgic quirk which is thought to be due to the way in which the metal alloy from which the coin is made, cools and forms after it has been struck.

The resulting coin is striking in its appearance. A myriad of rainbow colours appear across the face of the coin giving it a technicolour hue, and making it even more attractive than in its original silver state.

To the uninitiated, a coin with this appearance may seem tainted or worthless – but the sky’s the limit when it comes to the value of such coins.

One, which was NCG MS68+ graded, and had a green Certified Acceptance Corp. sticker, fetched $45,825 at auction in 2014 – even though it was originally estimated at “just” $25,000-$27,500. Not bad for $16 worth of silver!

So, keep an eye out at collectors fairs, flea markets – and other places you might find coins for sale – bear in mind the Carson City mint mark, and the rainbow toning effect, and who knows what you might find out there.