Did Americans Ever Like Dollar Coin?

SteveCaruso & Byran1315: Thanks for confirming my suspicion as the change jar principle.

Conder101: Yes, my phrasing of the original question was sloppy. I did mean "prefer". I had a suspicion that bills were preferred since the late 1800's, but didn't know why exactly. Thanks for the background.




Was this due to a lack of faith in the convertibility of paper notes?




Is it safe to assume that this is tied to bullion value? If so, why wasn't it illegal to melt coin?

During the War it was uncertainty over who would be the winner. Whichever one failed, you did not want to be holding their notes. So the value of the paper rose and fell after each battle depending on who won. After the war you have the massive debt the government had piled on, and the further debt that would come from the reconstruction period. This caused uncertainty over the governments finances and held down the value of the paper. Especially the unbacked Legal Tender notes.



I don't know if it was illegal or not. But with the rising value of silver with repect to gold after 1849 the coinage of dollars fell off considerably anyway. frankly I'm surprised any were coined because every one was made at a loss. This wasn't a problem for the fractional coins after 1853 because their weights were reduced and they were not worth over their face value like the dollars were. (It did result in the disappearance of the pre-1853 coins and there probably was some melting going on because those coins tend to have a higher value and are scarcer today than later coins of similar mintage.)

Carl, I hardly think old western movies would be a valid source for historical information on how coins were used. Considering how much inflation we have had since then, could you imagine how rich you would have to be to afford to go out on a dollar drink night back then?

Let's remember just how valuable a dollar was back then. Plus, considering that the silver ratio was 16 to 1 against gold. Carrying around dollar coins back in the old west would be like carrying around a stack of hundreds today. Go to a convenient store and buy a coke with a hundred. Most of those places don't particularly like it as the change wipes out their change drawer.

Again, as for carrying singles on you, I tend to carry more of a diverse collection of bills. Some fives and tens and a small handfull of dollar coins would be just as easy as carrying around a big wad of singles, but I feel you are dragging that point out just to keep your argument going for some reason. I think most anyone can figure that out.

Also depends on whether or not the vending machine operator has bothered to flip the switch and set their machine to take the coins. Most don't bother doing so.

Before 1862 the BIG reason reason for the preference for coins over paper currency was that there was no national currency that could be depended on everywhere. Instead there were literally thousands of different types of notes in circulation issued by States banks, county banks, municipal banks, private companies, privately owned banks, and fictional banks. Not to mention counterfeits and altered notes. The only way you had to know if a note being given to you was worth something, at how much of a discount from face it was worth based on the financial soundness of the bank, or if it was so much waste paper was to look up each note in a monthly publication you could subscribe to. And the values of many of the notes changed a lot faster than prices in the greysheet.

Back then crooks could literally get a license to print money. Gather together $25K in gold and silver and get a charter to forma a bank. Then you could print currency up to the amount of gold and silver you had. Of course there was no one there to make sure you didn't print more than that, and you could take that same $25K to the next county over and use it t get a charter for a bank there as well. Us the same $25K to get half a dozen charters ($150K in currency publishing authorization) then print and put into circulation fifty percent more than your authorization ($225K). Pocket the profits and skip town letting the banks fail and sticking to holders of the notes for the loss. is it any wonder people didn't trust paper? And it took a while to overcome that distrust even with the Federal paper when it appeared.

Conder101, that doesn't sound much different from the Fed Reserve and their paper bills now days.

Another thing you have to remember about silver dollars back then was that many were shipped over seas because the exchange rate for gold was so much better. That caused us to stop minting silver dollars for years. We still used the Spanish piece of eight though, which our dollar was kind of based off of in the first place.

The biggest problem with vending machines not accepting dollar coins isn't the coin mech. Virtually all multi-coin mechs made since 1979 will accept dollars--at most, there's a yes/no switch to throw.

The problem? The coin slot on the outside of the machine! About a $1 part change, or some supporters "fixed" machines by pounding the slot open with a screwdriver (not recommended, and illegal).

Yes. Of course the profit from a single dollar would be small so you would want to do this many times or in volume. The problem was that the act of 1853 that lowered the weight of the fractional silver also limited the legal tender status to $5 which meant if you tried to exchange more than five dollars wourh of halves at a time the bank could turn you down. And a dollar was a lot of money for the average person at the time so it would be difficult for a person to slowly acquire enough dollars to make it worth their while to exchange the silver in them for gold. This was possible for rich people or businesses do do though. Build up a stock of 1000 silver dollars (or multiples thereof), melt and refine it, and sell the silver for $1080 in gold.