Early mistrust of paper money is largely responsible for coinage being popular in early colonial American times
. Dollar coins made from silver mined in Central America and minted in Mexico were in circulation among the colonies as well as some coinage from Europe. Some colonies minted their own currencies. Many of these were made of silver or other precious metals. After the Revolutionary war, the US made its first attempt to print paper money. This was not received well. Colonists distrusted any money that did not have any real value.
It was Thomas Jefferson who first suggested a perceived value currency made of alternative metals that were similar to those foreign coins that were already in circulation among the people. The Coinage Act of 1792 started the official production of the silver dollar. The United States Mint issued dollars made of silver from 1794-1803. The first 1,758 dollar coins made in October 1794 were handed out as souvenirs to important dignitaries. Coins from this period can be extremely rare and valuable. They are worth many times their weight. They were issued in two designs: Flowing Hair and Draped Bust.
The 1804 silver dollar is one of the most famous and rare coins ever minted. They were actually produced in 1834 as gifts for Asian dignitaries in exchange for trade rights. An old die was used by mistake and 19,000 coins were made that bore the date 1803 instead of 1804. By the time the mistake was detected few coins remained to be made. Only fifteen coins with the date of 1804 were made. Today these are the most valued coins ever minted in the US. In 1999 one of these rare dollar coins was sold at auction for over $4 million.
The California gold rush lessened the value of gold coins and silver became even more valuable than gold during that period. In 1853 the silver dollar contained $1.07 worth of silver. Production of dollars made of silver was changed to contain less silver. The Morgan and Peace dollars reflect this change. They contain .77 oz of silver per coin. The popularity of dollar coins made of silver decreased among the American people. Even in the 1850s the coins were mostly used for international trade. Most silver dollars made from the late 1800s to today contain less than 50% silver and are mostly for collection though most are still legal tender.