Source: My Coin Guides:  Draped Bust Dollars were the second type of silver dollars minted in the United States. The coins would be struck with dates from 1795 to 1803, featuring two different reverse designs. In 1804 production of the denomination was halted, only to make an unusual come back in 1834 when the famous 1804 Silver Dollars were minted. These coins represent one of the foremost rarities in American numismatics. Without a doubt, this is a fascinating series, very important to the history of the young nation.

The Coinage Act of 1792 authorized the striking of the dollar as the largest silver denomination for America. Like the previous series, the new Draped Bust design was created by Robert Scot, the first Chief Engraver of the United States Mint. The same design would be featured on the remaining silver denominations of the era and now provides a familiar image for many collectors of early American coinage.

The obverse of the Draped Bust Silver Dollar features the head of Liberty, facing right, with the word LIBERTY above and the date below. The bust is draped, hence the name given to this design in the 19^th century, which still remains in use. An arrangement of stars appears in front of and behind Liberty, representing the states in the Union. During the series, the number of stars varied from 15 to 16 to 13, as did the arrangement on some of the 1797 silver dollars. Initially, stars were added to the design as more states joined the union, but it was soon decided that the Mint could not add stars indefinitely. As such, in 1798 the number of stars reverted to 13, representing the original thirteen original states.

The reverse of the issues dated 1795 to 1798 was based on earlier work by Scot, which had appeared on the half dimes, half dollars and silver dollars of 1794 and 1795. It features an eagle in the center, encircled by a wreath with the top open by a slim margin. The eagle is seen standing on clouds, just above a ribbon which holds the wreath together. The words UNITED STATES OF AMERICA appear surrounding. No indication of denomination is given, rather this is included on edge lettering of the coin reading HUNDRED CENTS ONE DOLLAR OR UNIT.  This is referred to as the “small eagle” reverse.

In 1798 a new reverse design would be introduced for the Draped Bust Dollar, as well as all other silver coinage. This reverse featured a heraldic eagle, with its wings and claws spread and a shield at its chest. The eagle’s talons grasp a bundle of arrows and an olive branch, while its beak holds a ribbon with the inscription E PLURIBUS UNUM. An arrangement of clouds and thirteen stars appear above the eagle, with the words UNITED STATES OF AMERICA surrounding.

Production of this second subtype known as the “heraldic eagle” reverse would continue until 1804. During that year, production consisted of coins from dies dated 1803 or even 1802. This was common at the early Mint, as it saved money to use dies as long as possible, and nobody was bothered much by the date that appeared on the coins. Silver dollars carrying the 1804 date would be produced in 1834 and subsequent years, and come to represent one of the great rarities of American numismatics.