The following is re-posted from the “Bowers on Collecting” column on Coin Update
I continue to discuss topics proposed a few weeks ago by readers. Next up is this from Matt from Santa Rosa, California:
When I read about the 20-cent coin that was issued by the Mint only between 1875 and 1878 I hear about how no one liked the coin and they did not circulate. When I look to buy one for my type set most of what I see for sale are circulated coins. If the coin did not circulate where are all the Uncirculated 20-cent pieces?
I will answer in two parts—this week, continuing into next week:
The 20-cent piece, called by some a double dime, was born of the “Silver Question,” the great political issue of the 1870s. In the West, particularly at the Comstock Lode in Virginia City, Nevada, but also in other locations, silver was mined in ever-increasing quantities in the 1860s and found a ready market for coinage, not only domestically but worldwide. In the 1870s, that changed when several European countries reduced the silver content of their coins, and domestically, there was more silver metal available than needed for coinage. In the 1860s, a silver dollar contained a dollar’s worth of metal based on the bullion price.
When the price was falling in the 1870s, there was a call by Western mining interests and citizens for the free and unlimited coinage of silver. In 1873 the Trade dollar, a new denomination, was launched, and depositors of that metal could take their return in these coins, which were 90% silver and weighed 420 grains. These were made legal tender at face value and took the place of the 416-grain Liberty Seated silver dollars discontinued in February 1873, by the same coinage act that created the Trade dollar. Silver output continued apace, and by the summer of 1876, the price had dropped to the point that a Trade dollar had less than a dollar in silver at the market price. On July 22 of that year, Congress abolished the legal tender status.
In the meantime, in 1874, Senator John P. Jones of Nevada proposed that a new denomination would increase the use of silver. The double dime would be convenient in circulation as it would replace two dimes. There were a couple of problems. First, in the East, silver coins had not been used in circulation since the spring of 1862, when uncertainty about the outcome of the Civil War prompted citizens to hoard every silver coin in sight. By that time, gold had already disappeared. Legal Tender bills took their place, but could be exchanged at par only with other Legal Tender bills, not for silver or gold. It was thought that when the war ended in April 1865, silver would return. That did not happen, as the financial stability of the Treasury Department remained in question. Accordingly, it was not until after April 20, 1876, that silver coins returned to commerce.
In the West, Legal Tender bills were illegal under the California State Constitution, which prohibited paper money. Silver and gold coins remained in circulation, a curious situation. Accordingly, when Senator Jones proposed the 20-cent piece in 1874, it could only circulate in the West. Pattern coins were made in 1874, and the first coins for circulation in 1875. Another problem arose: It was easy enough to use dimes in circulation or to use quarters. The 20-cent piece fell betwixt and between.
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