Silver Set the Value for the Coins that Became Standard
Since the Coinage Act of 1792, the dollar has been the primary unit of U.S. currency. That wasn’t by accident. The original Silver dollar coin was based on the size and weight of the Spanish eight reales coin that was in common circulation in the American colonies. Though there were minor differences, the dollar’s genesis can be found in the famous “piece of eight.”
The word “dollar” itself has its roots in “thaler,” the original name of a 451-grain Silver piece struck in the Joachimsthal of Bohemia 20 years after the discovery of America. Silver was the establisher of value for the large, heavy coins that became standard. The establishment of the dollar as the central denomination of U.S. currency had its roots in the price of Silver and the lineage of the thaler, which stretched through the piece of eight. The dollar was set at a specific amount of Silver, and later adjustments to the Silver dollar and other coins had their roots in the intrinsic value of the Precious Metal. But Silver was not the only thing that dollars were made out of. Even our earliest dollar coins, struck in 1794, also contained copper to make them more durable and long-lasting. There’s more than one component to the value of a coin.
The Components of a Dollar Coin’s Value
Any coin has at least two components that make up its value, sometimes three: the face value, the intrinsic (Precious Metal) value and the numismatic value.
Face value is the value stamped on the coin, and it only really matters for the issuing authority. Modern bullion coins are always struck with a face value, but it doesn’t matter because the intrinsic value of the metal is far greater than the face value of the coin. Modern U.S. circulating coinage has face values that are often higher than the intrinsic value of the base metal in the coin.
Intrinsic value is the value of the metal in a coin. “Bad money drives out good,” or Gresham’s Law is one of the common sayings relating to intrinsic value. Back when money was made from metal, it meant that money that was overvalued would drive money that was undervalued out of circulation, and in modern times it’s applied to currency markets.
This could be seen in early American history with the Spanish eight real “piece of eight” coin and the Silver dollar. The American Silver dollar was slightly heavier than the piece of eight but traded evenly. Because of that, speculators would buy up the dollars and send them to the Caribbean, getting pieces of eight in return. The extra value in the weight of the metal of the American coins was pocketed by the speculator. As a result, Silver dollars did not circulate well in the early United States, and Thomas Jefferson banned their manufacture during his presidency until they were reestablished later.
Some coins also have a numismatic or collectible premium. Many people think that the older a coin is, the more valuable it is — this is not true. There are ancient Roman bronze coins that are far less valuable than many coins that were minted this century. The number of coins available, the collector’s demand for them, their historical significance, condition (state of preservation) and aesthetics all combine to give some coins a premium above what they would be worth in face value or intrinsic value.
What a Dollar is Worth
A modern circulating Sacajawea dollar coin, though it might not be frequently seen, is worth exactly the denomination on the coin itself. The metal is base and worth much less than the face value, and there’s no numismatic value to speak of. Any modern base metal dollar not specifically minted to be collectible (for example, in a proof set) likely falls under the same description.
The value of older Silver dollars depends on several factors. Early American Silver dollars (for example, the Draped Bust series of 1795 to 1804) are highly prized, particularly on certain key dates. They have a large numismatic premium in the thousands of dollars, especially for higher-quality specimens.
Liberty Seated, Morgan and Peace Silver Dollars are generally worthless due to higher mintages, but there are exceptions. The Gobrecht Dollar, which was the predecessor of the Liberty Seated Silver dollar is very valuable because of such limited mintages. High-grade (condition) and specific mint marks may also add to the premium. The Trade dollar was minted from 1873 to 1885 and has a little numismatic value, though not as much as some others.
Morgan and Peace Silver dollars are among the most common American Silver dollar coins, and, in low grade, they are commonly available for not much over the spot price of their Silver. A Silver dollar does not contain one Troy Ounce of Silver, unlike newer bullion coins. Morgan and Peace Silver Dollars contain .77344 of a Troy Ounce of Silver. Some issues are noteworthy, particularly the Carson City Morgans and other key dates from the various mints. Later issues like the Eisenhower dollar are mostly devoid of numismatic premium.
There are also Gold dollar coins that were issued from 1849 to 1889. These were not well-liked at the time due to their tiny size. Many lower-grade specimens trade for close to the intrinsic price of their metal, but some examples in higher conditions can fetch a huge numismatic premium.
How Much is a Dollar Coin Worth?
It’s hard to say. Newer dollar coins are mostly worth their face value. Older dollar coins are largely worth their intrinsic metal value with a slight numismatic premium, but some may have a much larger premium. If you have some coins you’re not sure about, it’s worth talking to a professional to get an appraisal. APMEX is always willing to appraise and buy coins. Contact us to find out how we can help you learn the real value of your dollar coins.
Expand your collection today and shop our assortment of 1922-1925 Peace Silver Dollar VG-XF (Random Year).