The Pittman Act of 1918 ordered that
hundreds of millions of dollars be melted at a profit.
The reason is that the German government during World
War I hoped to destabilize British rule over India
by spreading rumors that the British could not redeem
their paper currency for silver. Hoarding of silver
followed and the price rose, which risked the British
war effort. The British asked the United States, its
ally to sell silver to increase the supply and lower
the price. The Pittman Act was passed in response.
It gave the U.S. the authority to melt and sell silver
to the British government from 350 million silver
dollars at the rate of $1.00 per ounce of silver plus
the value of the copper in the coins. Over 270 million
coins were melted. The proceeds were to be used to
purchase new silver for dollar coins at a premium
over the market price. As in the Bland-Allison Act
of 1878 and the Sherman Silver Purchase Act of 1878,
the Western silver industry was again supported at
taxpayer expense.
At the Mint, the Morgan dollar hubs had been destroyed
because no one expected further dollar coinage. Morgan
assisted by Assistant Engraver John R. Sinnock made
copy hubs. Because they had less detail and were made
with lower relief, they were of poorer quality. The
new 1921 dollars had Liberty with a flat cheek, bold
lines of hair, and no crease above the chin. The stars
were larger than the original. The reverse showed
the eagle with a flat breast with virtually no feathers
and arrows parallel to each other. Since it was believed
that most of the new dollars would not circulate,
no great care was used in making them. Eventually
they were released in mint-sealed bags and used primarily
in the Nevada gambling industry. During the 1970s,
millions were melted for bullion as the price of silver
increased.
In 1921 there were no official proof sets sold; however,
Henry Chapman, a noted collector-coin dealer, went
to the Mint and asked that mirrored proofs to be struck
for him. Evidently Morgan had a private business using
Mint equipment to make secret products like these
proof coins. Morgan sold ten proofs to Chapman and
five to Ambrose Swasey, an engineer, scientist, and
philanthropist. In 1924 Chapman bought another 1921
proof dollar from Thomas Elder, a noted dealer. He
paid $5.75, which was a large amount for a proof dollar
at the time. Researchers believe that Chapman paid
the higher price to raise the value of the pieces
he had in stock.
Genuine proofs of this date are extremely rare; the
situation is confused because a number of prooflike
coins were sold as “Zerbe Proofs.” Farran
Zerbe was the former president of the American Numismatic
Association and publisher of The Numismatist. Allegedly
a number of proofs were struck at his request to provide
quality examples of the final issue of the Morgan
dollar.
In the July 1955 issue of The Numismatist Stuart Mosher
wrote, “In 1921 he [Farran Zerbe] was in California
awaiting the arrival of the dies that were to be used
to strike the first Peace dollars at the San Francisco
Mint. The mint phoned him that the dies had arrived
and he hastened there to see them put into operation.
The new 1921 dies had arrived all right but they turned
out to be dies for the old Morgan design which had
not been coined since 1904, and not the dies for the
Peace dollar which he had worked so hard and long
to promote.
“Mr. Zerbe told … [Mosher] that he suggested
to the chagrined mint officials that they could assuage
his disappointment somewhat if they would strike off
a few Morgan dollars from the new 1921 dies in Proof
condition. They were happy to oblige and manufactured
about two dozen which he bought and later handed out
to his various coin collecting friends throughout
the country.” It’s reasonable to assume
that Zerbe did the same thing at the Philadelphia
Mint as well. Hence, there may well have been two
different strikings of the 1921 Philadelphia proofs.
In its population report, NGC has certified 23 Chapman
proofs and 44 Zerbe proofs, one of which is a cameo.
Similarly, PCGS has certified 42 Chapman proofs, one
of which is a cameo. PCGS has also certified 82 1921
“Specimen Zerbe Special Strikes” and 4
1921-S “Specimen Zerbe Special Strikes.”
In his Silver Dollar Encyclopedia, Bowers makes a
distinction between proofs and presentation pieces.
Evidently PCGS agrees with Bower’s point of
view.
