History of Silver
For thousands of years, silver has been prized for its beauty, its malleability for the production of jewelry, religious artifacts, food vessels and other wares, and as the basis of currency throughout the world. Discovered in what is now Turkey around 4000 BC, and introduced in Egypt around 2500 BC, it was for centuries considered more valuable than gold and was monetized by the Chinese as early as 475 BC.
In the 1500s, with the colonization of the Americas, silver flowed from mines and mints in Mexico, Bolivia, and Peru to Spain and the rest of Europe where silver coinage became commonplace. It is estimated that nearly 2.5 billion troy ounces were produced between 1500 and 1800 AD. In 1792, silver played an important role in the United States monetary system when Congress based the U.S. currency on the silver dollar.
In the late 1800s and 1900s, silver from North American mines in Nevada, Colorado, and Utah resulted in annual production averaging 190 million troy ounces, and silver coinage was widespread from coast to coast. In the 20th and 21st centuries, advances in production and refinement techniques, coupled with explosive demand for industrial and investment purposes have seen the value of silver rise to historic levels.
Prior to the American Revolutionary war, coins from many European nations were in wide circulation in the American colonies as were coins that were minted by the various colonies. Chief among the coins in use was the Spanish silver dollar, also called pieces of eight or eight reales, which were minted in Mexico. These coins, along with others of similar size and value, were in use throughout the colonies, and later the United States, and were legal tender until 1857.
The first paper currency used in the United States was the Continental which came into being at the time of the nation’s birth but was not accepted by the populace. In 1776, the Continental Congress authorized plans to produce a silver coin to prop up the rapidly failing Continental which was all but a total failure. Several prototypes were struck in brass, pewter, and silver, but a circulating coin was not produced at that time due in large part to the financial difficulties of running the Revolutionary War. The failure of the Continental exacerbated a distrust of paper money among both politicians and the people. The letters of Thomas Jefferson indicate that he wished the United States to eschew paper money and instead mint coins of similar perceived value and worth to those foreign coins circulating at the time.
The Coinage Act of 1792 authorized the production of dollar coins from silver and the United States mint produced silver dollar coins from 1794 to 1803, and then ceased regular production of silver dollars until 1836. The first silver dollars, precisely 1,758 of them, were coined on October 15, 1794 and were immediately delivered to Mint Director David Rittenhouse for distribution to dignitaries as souvenirs. Thereafter, until 1804, they were struck in varying quantities.
The silver dollar is one of only two denominations (the other being the cent) minted in every year from its inception during the first decade of mint operation. However, the order was given by President Thomas Jefferson to halt silver dollar production due to the continued exportation of U.S. dollars. The Spanish 8 Reale, which was slightly heavier than the US dollar, nonetheless traded at a 1-to-1 ratio. As a result, U.S. dollars went to the Caribbean where they were traded for heavier 8 Reales, and those were then brought back to the US where they would be re-coined into more US dollars; the difference in silver, then, was kept by the exporter. This ensured that no dollars would circulate in the US, but would instead be exported for their heavier counterparts overseas, leaving little but old, foreign money to circulate in the United States.