In the 1870's the United States had just passed through a silver panic that had caused the price of silver to plummet. Old coins that had been hoarded because of their silver value were now worth more as ordinary money at face value, so a flood of old and worn coins were now making their way into circulation. In Congress a new law was about to be passed that was intended to benefit the struggling silver mines of Nevada and other western states, and the U.S. Government was about to be required to purchase between two and four MILLION dollars worth of silver every month and convert it into silver coins.

Henry Linderman, the Director of the U.S. Mint, saw that the country had an urgent need for a new silver dollar coin, so he staged a competition between William and Charles Barber, the father and son team who had worked at the Philadelphia Mint for years, and George T. Morgan, the young new engraver that Linderman had brought over from England. Both the Barbers and Morgan came up with a design featuring a Liberty head, but Linderman preferred Morgan's design, and the Liberty Head dollar (more commonly known as the Morgan Silver Dollar) was born.

One strange characteristic of the Morgan dollar production run is that many of the earlier Morgans were actually melted down and reminted into the later Morgan dollars in 1921 (which is why many of the earlier dates are now so scarce).

Most of the Morgan dollars in collectors hands today are from the various hoards of the coins by banks and other financial institutions who could not keep the coins in circulation because they were so unpopular with customers. Since the hoards were stored in bank vaults in bags, the characteristic markings on these coins from the coins knocking together are known as bag marks. Another significant source of the coins was LaVere Redfield, a Reno, Nevada resident who had hoarded more than seven million dollars worth of Morgan dollars. His hoard was sold at auction in 1976.

Morgan dollars were originally issued every year starting in 1897 through 1904, with one reissue in 1921. The following year the Peace Dollar replaced the Morgan dollar as the Mint's standard silver dollar design, and the production of the Morgan dollar passed into history.