On This Day: The US Silver Dollar Becomes Legal Tender (1874)

On This Day: The US Silver Dollar Becomes Legal Tender (1874)

Jeanette Lamb - February 16, 2017

On the 16th of February 1874, the United States Silver Dollar became legal tender. They were first minted in 1794 and stopped being made in 2011 (unless for collector’s editions). This was entirely due to their lack of popularity, which is uncommon throughout the rest of the world where most dollar currencies are coins. Americans prefer and widely use the dollar bill, one theory is that they are too similar in size to the quarter coin.
The US silver dollar was inspired by the Spanish dollar. Prior to the American Revolutionary War, coins from various European countries circulated without restriction throughout the US Colonies. The Spanish dollar in particular was commonly used. It was being minted in Mexico with silver being mined throughout South America. They were recognized in the US colonies as legal currency until 1857.

On This Day: The US Silver Dollar Becomes Legal Tender (1874)
American Eagle Silver Bullion Coin, Photo: Silver Trading Company

The Revolutionary War put pressure on the colonies to form their own currency. When the process began, paper was preferred to manufacturing and distributing coins. Financing the program at the early stages of the war prevented minting rates. It was a slow process, but one Jefferson and others knew to be important.
By 1874 the Bland Allison Act was passed. It gave way to the return of silver coins, which were to be minted and used throughout the entirety of the US. Controversy around the minting of silver coins hinges on the old banking system. It used silver and gold to give value to the coin itself, but silver was disappearing and made it necessary to think up a new system. However, instituting the system willy-nilly would run farmers and miners into debt. To soften the monetary transition, the Blank Act was enacted, making silver legal tender.