History Through Coins: The Great Depression

Posted on 5/12/2020

A collapsing economy was reflected in falling mintages of US coinage.

The catastrophic tumble suffered by the New York Stock Market in October of 1929 was just the most dramatic and visible cause of the Great Depression of the 1930s. It was prompted by years of speculative buying on “margin,” putting a small amount down on stocks that all parties were certain would keep rising in value. When overall economic indicators suggested that industrial production and the sale of consumer goods were falling during 1928-29, buyers’ resistance within the stock market set off panic selling and margin calls that speculators large and small could not cover.

The breadlines of the Great Depression are captured in this sculpture at the Franklin D. Roosevelt Memorial in Washington, D.C.
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Unable to cover such huge losses, both individual and institutional investors went bankrupt. Banks called in loans, and when these loans proved uncollectible, the banks were in danger of failing. Indeed, such fears set off “runs” on their cash supplies, as account holders attempted to withdrawal all of their funds. Far too often, however, the money ran out short of the amount shown in a bank’s books, and the banks simply shuttered their doors in the faces of panicked savers. In a time before federally insured savings, there was no recourse for depositors.

In truth, there had been signs of trouble for years. The boom in farm commodity prices prompted by America’s feeding of Europe during and following World War I came to a crashing halt in the early 1920s, and farmers struggled throughout that otherwise prosperous decade. Slowed commerce was evident in the reduced production of coins at the Denver Mint during the late 1920s, as it was from that facility that the Midwest received its coinage. Many of the pieces that were produced during that period were withheld from release at the time, remaining idle in vaults for some years afterward. Collectors of the mid- to late 1930s found an abundant supply of Mint State survivors among the nickels, dimes and quarters dated 1924-D through 1929-D. Even today most of these issues remain more plentiful than their mintages would suggest.

By 1931 it was evident that few additional coins were needed, and the US Mint’s overall payroll dropped rapidly, going from over 1,000 people at the end of the 1920s to just 392 by June 30, 1933. The three mints then active kept their remaining employees engaged in assaying and other miscellaneous tasks, while the actual production of coins plummeted to its lowest point in decades. Several denominations were not produced at all during a few of the years 1931-33, and the tantalizingly low mintages of those issues that were coined sparked a frenzy on the part of coin collectors who, until that time, had shown almost no interest in current coinage of the United States. Thus began the modern coin collecting segment of the hobby.

The one-cent piece was always the most widely used of United States coins, and it was only in 1815 that no cents were coined. This record was in danger of being broken in 1931-33, as the demand for new pieces plummeted. Many of the cents struck with those dates remained in vaults until finally needed for commerce in 1934-35. Such was the case with the 1931 Cents from the San Francisco Mint. Only 866,000 pieces were struck, and almost none were seen until early 1935, when dealers like Norman Schulz of Salt Lake City were able to buy bag quantities and fill back orders. This issue thus remains common in Mint State and rare in any grade below Fine.

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Coin: 1931-S Lincoln Cent graded NGC MS 65 RB

The 1931-S Nickel is another coin that one might expect to be rare in Mint State, yet isn’t. A mere 194,000 pieces were struck at the San Francisco Mint in January of 1931, and then production ceased for lack of new orders. The other two mints coined none at all. On November 19 a very concerned Mary M. O’Reilly, Acting Director of the Mint, wrote to the San Francisco Mint’s superintendent that “This amount, if allowed to be the total coinage for the year, would send the nickels of 1931 to a premium and would cause the Treasurer and this bureau a good deal of trouble for years.” She then added “…it is suggested that you discontinue the coinage of dimes and prepare to run on nickels for the balance of the calendar year.” Thus it was that the final production of 1931-S Nickels rose to 1.2 million pieces, most of which were not released until 1935.

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Coin: 1931-S Buffalo Nickel graded NGC MS 65

Despite the ravages of the Great Depression, all three US Mints contributed to the coining of dimes during 1931. The quantities were necessarily small, with Denver having the lowest production. This issue was perhaps a make-work project, as that mint didn’t even receive dies for dimes until after the new fiscal year began July 1. Like so many Denver Mint coins of the late 1920s and early ’30s, the 1931-D was released only in very small numbers until the economy began to recover in 1934. And, like those other dimes, this issue was widely saved by collectors and dealers when finally available. Fairly common in Mint State to this day, examples were extremely difficult to find in circulation during the 1930s. A 1937-38 survey of 5,000 dimes taken from circulation in the area of Rock Island, Illinois, where D-Mint dimes generally prevailed, turned up just seven examples.

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Coin: 1931-D Mercury Dime graded NGC MS 64

The production of quarter dollars had ceased after the opening months of 1930, and no additional pieces were needed for circulation until 1934. It was desired, however, that a coin be issued to commemorate the bicentennial of George Washington’s birth in 1932. The typical avenue for such pieces was the series of non-circulating commemorative half dollars, but Congress and President Hoover had soured on these often-abused programs. Instead, it was decided to issue a circulating quarter dollar with Washington’s portrait. The winning entry was submitted by sculptor John Flanagan. Though no quarters were needed in the channels of commerce, all three mints nonetheless struck 1932 Washington Quarters. Denver and San Francisco minted just enough for those collectors who may have desired three-piece sets, while Philadelphia coined more than 5 million for the benefit of the general public seeking single-coin keepsakes. Many were indeed saved, and Gems are fairly plentiful today.

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Coin: 1932(P) Washington Quarter Dollar graded NGC MS 62

Half dollar production had been quite high during World War I, and starting in 1922, production was suspended at the Philadelphia and Denver Mints, while that of the San Francisco Mint was only intermittent. A moderate issue of 1929-D and 1929-S Half Dollars should have carried the nation through the lean years of the Great Depression, yet a mysterious emission of 1.7 million halves was produced at the San Francisco Mint in 1933, its only coining activity that year. These pieces were unusually well struck for a design that typically is weak at its centers. Despite being a bit costly at the Gem level, 1933-S half dollars make for splendid type coins, and they also serve as a curious anomaly from this period of sparse coinage.

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Coin: 1933-S Walking Liberty Half Dollar graded NGC MS 67+

All new bills for commemorative coins were shot down during the administration of President Herbert Hoover (1929-33), but that didn’t prevent the Oregon Trail Memorial Association from ordering up 5,000 half dollars from the US Mint at Denver in 1933. You see, this issue had been authorized seven years earlier, and no limit was put on the number of different date/mint combinations that could be requested by the Association. It therefore went to the well again and again, knowing that coin collectors would buy each and every issue to avoid having incomplete sets. Though Congress finally cancelled all such “serial” commemoratives in 1939, by then the OTMA had received no fewer than 14 issues of the same coin! (The 1933-D example shown has a tripled obverse die, though there is little premium for a variety of a coin that is already scarce by virtue of its low mintage.)

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Coin: 1933-D Oregon Trail Half Dollar graded NGC MS 67

By the time the Great Depression overtook America and the world, gold coins were no longer circulating in daily commerce. Despite the official price of gold being locked at $20.67 per ounce, all gold coins were already bringing slight premiums. By 1931, when Britain went off the gold standard, American gold coins were being exported and hoarded overseas. Most of the few issues produced from 1930 until minting ceased in 1933 are quite rare today, as few were issued at the time, while the vast majority were withheld and melted during 1936-37. The only United States gold coin that was released in large numbers and thus remains common today is the Philadelphia Mint’s 1932 Eagle (or ten-dollar) piece. Nearly 4.5 million were made. The many survivors tend to be highly lustrous and are a favorite with those seeking a single example of this beautiful coin type.

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Coin: 1932 Indian Head Eagle graded NGC MS 62

History Through Coins previous columns:

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