Owner Comments:
In 1840 the U.S. mint began to issue silver dollars for general circulation on a regular basis. The Liberty Seated design, which had been introduced on the Gobrecht dollar, was retained, but mint officials replaced the beautiful flying eagle with Jon Reich’s “sandwich board eagle” that had been on U.S. silver coins for more than 30 years.
The new dollars quickly proved to be unpopular. Most Americans found the silver dollar too heavy and unpleasant to carry in quantity. Most of the new dollars ended up stored on government vaults. In later years they would be melted and the silver from them used to produce lower denomination coins.
The discovery of gold in California caused a price imbalance to develop between gold and silver. By the early 1850s every U.S. silver coin that was then in circulation, which the exception of the tiny three cent piece, melted for more than its face value. Congress responded by reducing the weight of every U.S. silver coin except the three cent piece and the silver dollar.
It was thought that the government had an obligation to preserve the integrity of the dollar by not reducing the weight of the large silver coin that represented “the unit” in the American coinage system. That misguided decision drove what few dollars that would have been in circulation into hiding or the melting pot because each piece contained $1.04 worth of silver.
By the time this 1862 Proof silver dollar was struck during the Civil War, the paper dollar was worth far less than dollars in gold and silver. By this time the mint listed two prices for sets of Proof coins. There was a price for paper dollars and bank drafts and another lower price for payment in coin. Few modern collectors can conceive of a situation when the price of their new coins would be dictated by their method of payment.