The Seated Liberty Dime, 1853-1891
The early years of the Seated Liberty dime, from 1837 to 1853, were not a smooth road of coinage, but a continual series of feast and famine. The mintage of dimes beginning in 1853 was to be even more rocky, with many of the great rarities and enormously common pieces side-by-side as the years rolled past.
In the late 1840s, the discovery of gold in California had caused silver to become undervalued with respect to gold, and great quantities of coin were bought up by bullion dealers and shipped overseas for melting. By the middle of 1850, little was to be seen in the marketplaces. It was not until February 1853 that Congress finally solved the problem by reducing the amount of silver in the coinage.
The 1853 law kept the dollar intact at its old weight and fineness, but the minor silver coins saw their weight reduced by nearly 7 percent. The reduction was enough that bullion dealers would no longer buy up the silver coins.
The dollar was left alone to maintain the polite fiction that we still had a bimetallic system of coinage, where gold and silver were of equal importance. In real terms, however, the 1853 law created a de facto gold standard; the silver dollar did not circulate in America again until the creation of the Morgan dollar in 1878.
Beginning in the spring of 1853, massive silver coinages were the order of the day. In 1853 alone, more than 13 million dimes were made at Philadelphia and New Orleans. Coinages in following years were also very heavy, due in part to Mint Director James Ross Snowden. He simply ignored a key provision of the 1853 law.
Congress had decreed in 1853 that minor silver coin could be paid out by the Mint only for gold, which meant that just enough would be struck to meet the needs of the public. Director Snowden thought that this provision was too restrictive and began to pay out silver coin for silver bullion at attractive rates, although the government still made a profit. The result was a series of very heavy coinages at the Philadelphia Mint from 1853 to 1858.
As early as 1855, merchants and bankers alike were complaining to the Treasury that far too many silver coins were flooding the country. In 1858, as a result of all these complaints, the Treasury finally ordered Snowden to adhere to both the spirit and letter of the 1853 law. He did so reluctantly and coinage fell off drastically during the latter part of 1858.