The Silver Search: Morgan Dollars, Nevada & the Indian Rupee

 

With the advent of the First World War in 1914, the World was divided into opposing camps, each arming themselves to the teeth for the cause of destroying the other. With Britain being one of the allied powers, its colonies, such as India, were dragged into the war and had to support the British in their war efforts. The Indian war efforts in the First World War was in the form of large supplies of food, money, ammunitions, & manpower- with the British Indian Army of 1.3 Million soldiers outnumbering the British Army, at the start of the war. As a result, shortages soon surfaced across the subcontinent, as the economy took a hit. Even the mints weren’t spared. Prior to the war, colonial India used to import about a quarter of its Silver requirements for purposes of minting its coins. With the war efforts, this issue aggravated as a sharp decline in the supply of silver hit the mints. The colonial administration was in a mess as it became difficult to redeem its currency for silver on demand.

The Senator & his Silver State

The State of Nevada in the United States was one of the largest producers of Silver, with numerous Silver mines in operation, earning it the name “the Silver State”. Beginning with the discovery of Silver mines in Comstock in 1858, the silver production boomed from 1912 to 1921. This timing came as a great advantage as it helped in the war efforts during the World War, and the later post war recovery. Taking advantage of the situation, Senator Key Pittman of Nevada sponsored the Pittman Act of 1918, which was enacted on April 23, 1918 by the US Congress. This legislation provided Britain with the Silver it needed to meet the shortage in India, and provided for a federal stimulus for the Silver Mining industry masked as a deal between the Treasury and the Mining companies.

At the height of its mining operations during the 1912-1921 period, Rochester District in Nevada produced over 200 Metric Tons of Silver & 1.6 Metric Tons of Gold. Today most of the town of Rochester is abandoned. Pictured here is Upper Rochester, Nevada in 1918 [Credit: Nevada Historical Society]

The provisions of the Pittman Act authorized the conversion of standard Silver dollars, not exceeding 350 Million dollars, into bullion for sale or use in subsidiary silver coinage, and directed the purchase of domestic silver for re-minting an equal amount of standard silver dollars. It is no surprise that the US Treasury procured the bulk of domestic silver for replenishment from the Senator’s own state of Nevada at a rate higher than the market value.

Under the Act, an equivalent of 270 Million (270,232,722 dollars to be exact) standard silver (Morgan) dollars in the Treasury Vaults of San Francisco & Philadelphia mints were melted for their silver bullion, of which north of 259 Million silver dollars were sold to Great Britain at a rate of a dollar per ounce with additional mint charges, and shipped to the port of Calcutta (now, Kolkata). The rest of the 11 Million silver dollars were re-coined into subsidiary American silver coinage in the form of dimes, nickels & quarters.

An example of a 1903 “Morgan” Dollar Issue from the Philadelphia Federal Mint, many of which were melted down under the Pittman Act of 1918 and shipped to Calcutta [Credit: American Numismatic Society]

Say Hi to the new Issues!

To compensate for the Silver that was taken out from the Treasury, an equal amount of Silver certificates were withdrawn from circulation as they couldn’t be redeemed by the treasury for their value in silver. Due to this, Federal Reserve Bank Notes were issued in 1918, as an emergency replacement of the withdrawn Silver certificates, with the One & Two dollar Federal Reserve Bank Notes being issued for the first time.

Emergency Issues of Federal Reserve Bank Note were issued in 1918 to compensate for the withdrawal of Silver Certificates of equal value. The 1918 Series (dated 1914) Issue saw the introduction of the new One & Two dollar denominated Federal Reserve Bank Note. [Credit: Banknote Museum]

A Two Dollar Federal Reserve Bank Note featuring Thomas Jefferson on the Obverse [Credit: Banknote Museum]

Starting 1921, the US Mint was required to issue silver dollars under the Pittman Act from the domestically procured silver. This was to ensure the replenishment of the silver that was removed from circulation owing to the Pittman Act. The Morgan dollars were last minted in 1921, with the introduction of the “Peace” dollar the same year as the standard silver dollar, it being called “Peace” as a mark of commemoration for Allied victory & the end of First World War. The Peace Dollar continued to be minted till 1935.

An Example of a 1921 “Peace” Dollar minted by the Philadelphia Mint using domestically procured Silver, as was required by the Pittman Act of 1918. “Peace” Dollars were minted from 1921 through 1935 at the three US Federal mints in Philadelphia, Denver & San Francisco   [Credit: American Numismatic Society]

(Re) Minting the Silver Rupee

With ships laden with American silver reaching the port of Calcutta, the mint in colonial India swung into action. In 1919, the then Calcutta mint facility at Strand Road produced a total of 211 Million pieces of One Rupee bearing the effigy of George V, the King & Emperor of India, while the mint at Bombay produced 226 Million such pieces. Other silver coins, such as the quarter & half rupee soon followed suit.

A 1919 Silver One Rupee Issue of Bombay Mint, bearing the effigy of King George V. The Silver contained in most of the coins issued in 1919, particularly the One Rupee, can be traced back to the US “Morgan” Dollars sold to Great Britain under the Pittman Act [Credits: Joseph Kunnappally]

While not much thought is put into the source of a coin’s metal, it is interesting to see how they provide us with an equally captivating sliver of history & art as does the design and historical significance of a minted coin. It is certain for sure, the next time you hold a 1919 Silver Rupee in your hands, you shall be holding more than just a British Raj rupee- but a Morgan dollar that traveled across the high seas to be an Indian rupee, thanks to the actions of one Nevada senator.

 

-Soubhik Chatterjee