Silver Dollars Get Melted...

In 1918, an interesting problem plagued Congress - the United States government still had hundreds of millions of Morgan dollars in storage - minted 15 to 30 years previously.  The US treasury was paying for storage of these coins yet had a silver shortage.  Congress passed the Pittman Act in 1918, which led to melting 270 million of the dollars for use in subsidiary coinage and for sale to Britain, then a wartime ally.  Silver interests secured legislation requiring the mint to later replace the melted silver dollars.  Figures on the date and mint mark of the melted coins were not kept, so collectors do not have precise population reports.  Almost half of all Morgans produced during their first run from 1878 to 1904 were melted.  Certain dates seem virtually nonexistant.

... And More Get Melted...

In World War II, the United States government again needed silver.  Millions of silver dollars still sat in storage, apparently unwanted and gaining little interest from the numismatic community.  The Silver Act of 1942 led to the melting of millions more silver dollars.  Much of this silver was used for subsidiary coinage, then still made of the same 90% silver alloy.  The fate of the Morgan dollars attracted little attention at the time; millions still sat in bank vaults and could be obtained simply by redeeming a silver certificate. 

Rising Silver Prices Lead to More Melting

By the early 1960's, rising silver prices caused many to hoard silver coinage and melt it since the coins' intrinsic silver value exceeded the face value.  At that time, the dime, quarter, and half-dollar were still made of the same 90% silver, 10% copper alloy that had been used for almost 200 years.  Old silver dollars were still available from government vaults at face-value.  No silver dollars had been minted since 1935, although several 1964-dated Peace dollars were minted, then immediately melted in early 1965.  (For more on 1964 dollars, see The Mythical 1964 Peace Dollar: Does it exist? ) 

The mint first blamed collectors for the shortage, and ordered a date-freeze on all new coins for 1964.  Soon however, the mint adopted a different strategy.  In mid-1965, it switched new coin mintage of the dime and quarter to a copper-nickel clad alloy containing no silver.  Half-dollars were made using a copper-nickel-silver clad alloy of only 40% silver.  These changes ensured the face-value of the coins exceeded their bullion value and thus eliminated the financial motive to hoard new coinage.  Old coins, dated 1964 and earlier, rapidly disappeared from circulation, and many were melted.  Many silver dollars met the same fate.  It is estimated that between the multiple round of meltings, less than 20% of the original mintage survives.  Many once-common date coins became quite rare. 

In the last four decades, these coins have gained a following of their own.  They have become one of the most visible and collected symbols of American coinage.  For even the common dates, their numismatic value far exceeds the cost of the metal from which they are made.