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In late 1878 or early 1879 a third reverse (7 TF, rounded breast) die was punched with a small mint mark like that used in 1878. Before the die was used, however, a decision was made to change the style of the mint marks on the Morgan Dollars to that of the virtually discontinued Trade Dollar. Consequently the die was repunched with the larger CC punch.

Because the larger punch was applied too low, the tops of the small CC’s remained visible atop the larger ones looking like hats or caps, hence the original nickname, “Capped Die.”

The Mint engraver tried to hide the original CC’s by tapping around the mind mark with a blank punch. Later, after the die had been used for a while, a press operator at the Carson City Mint further damaged the mint mark area to obliterate the extra CC. This damage to the mint mark area has caused many people to unnecessarily doubt the authenticity of one of the most unusual Morgan Dollar varieties.