A Magnificent 1840 Seated Dollar
In our January 26-27, 2012 New York Americana Sale we are pleased to offer a magnificent 1840 Seated dollar Proof-65 (NGC) (Lot #4836), that is important for several reasons. Of course, 1840 is the first year the silver dollar resumed production in earnest, after a small flurry of activity in 1836 with the release of a tiny number of Gobrecht dollars into the channels of commerce. Prior silver dollar production had ceased when the last 1803 silver dollars were released into circulation two generations before and had long since disappeared from daily transactions.
This 1840 silver dollar represents our “unit” of coinage, the famous dollar in silver (later dollars were also struck in gold starting in 1849). Not only is this dollar one of the initial Seated Liberty coins struck in Proof, but also it remains in Gem condition. The surfaces are a delight to study and the quality of the early craftsmanship is seen in the engraver’s design work. While the number of Proofs struck in this year was higher than later years, it certainly wasn’t great, 50 pieces. However, the present coin is one of the finest graded by either grading service, with a total of four seen at the unexcelled Gem level. It would be difficult to overstate the historical significance of this Gem Proof 1840 Seated dollar.
The “dollar” unit in America was defined in the Mint Act of 1792 as containing 371.25 grains of pure silver, or 416 grains of standard silver (1,485 parts fine silver to 179 parts alloy). Thus the impractical fraction to produce the necessary coin silver came out to be .89243 pure silver, with the balance being a blend of copper or other alloys. Both Thomas Jefferson and Alexander Hamilton proposed adjusting this blend to a simpler 90% silver to 10% alloy, and Congress was expected to pass the necessary paperwork. Such logic failed to pass muster in Congress, although Mint Director David Rittenhouse had already acted on the proposal by telling the refiner to use the proposed alloy mix instead of that stated by current law for the production of the 1794 silver dollar. Jumping the gun by Rittenhouse resulted in some trouble, as depositors of silver bullion received about 1% less on their silver deposits returned as coins based on this flux. The logic of a 90% silver mixed with a 10% alloy was finally adopted, but not until 1837.
As the gold fields in California began to hum in 1849, Congress proposed striking a gold dollar to circulate alongside the silver dollar, reinforcing our bi-metallic coinage system. The official gold to silver ratio had been 16 to 1 since the founding of our country, and this useful measure was again employed to properly measure the gold weight of the gold dollar. Thus a gold dollar weighs 25.8 grains, or one-sixteenth that of a silver dollar. In theory, both coins would circulate together freely—as long as the price of gold and silver remained steady in relation to each other. This of course, was not to be the case; immense quantities of gold found in the California Gold Rush from 1849 until the 1860s, followed by even more silver pulled from the Comstock Mines in Nevada beginning in the 1870s, disrupted this plan time and again. Today, this 1840 dollar stands tall, as one of the first and finest of its kind, bringing to mind an era of prosperity and significance.