Data on 1980 Silver Melt

Does anyone have any reliable data on the silver coin melt leading up to the 1980 silver price spike and crash?

I am interested in some studies detaling what percentage of certain coins were melted (I know there is no way to know for sure).

 

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Silver Melt Data

Henry Merton authored a book (The Big Silver melt) on the silver melts of the 1960's. He provides very good data on what was melted during those years. He claims that about 1.24 million ounces of US coins were melted between 1966 and 1969. That's about 65% of every silver coin minted between 1916 and 1964.

I have been researching and collecting data for about 6 years now and am compiling it in a book of my own (not sure if I'll publish it or not) that suggests that only between 7% and 8% of the silver Roosevelt dimes remain. I have good correlation to verifiable data and am tracking it issue by issue so that I can predict the true rarity of each issue in the series.

That suggests that since 1969, 70% or so of the remaining common date silver has been melted. Much of it was melted when silver prices were run up by the Hunt Brothers in the early 1980's and some of it is still being melted today.

Some issues like the 1955 dimes remain largely unmelted because they were minted in low numbers and were perceived to be rare while issues like the 1948S have been melted such that there are less than 3 million specimens remaining for that date/mint.

 

I'm more interested in knowing why when the price of silver goes up does silver get melted down. Is there some mechanism that correlates high silver price with more melting. And if silver were to go up overnight to $50 an ounce, do you think that melting would happen again today?

 

Silversurfer has a good point. When outfits like SilverTowne buy silver at coin shows, they're melting it whether they pay $6/oz or $50/oz. I don't get why high silver prices automatically mean MORE melting than normal.

 

Good point. The amount of silver melted around 1980 must have been tremendous. I don't know how anybody could accurately quantify it. My guess would be that most of the silver available to melt [such as granny's tea set] at prices below $25 or so is gone. When prices go higher, I think more people sell their silver to melt because of the higher profit margin over their cost. And since higher prices are indicating tighter supplies for industrial users, smelters probably have a greater demand for it. A spike to $50 will probably have collectors cracking out MS69 bullion to melt.

 

I don't know if I'm following you on that. If silver were $50 an ounce, why not just sell the MS69 coin for the new price. Why does it have to be melted? I can understand melting grandma's tea set, but why would bullion, that tracks the price of silver, be melted down more when the price goes up? Or how about rare coins for that matter.....wouldn't the price of silver going up help the price of those rare silver coins? Why melt them down? What is the mechanism for melting silver bullion or coins when the price goes up?

 

Maybe I am wrong on this but I think that a majority of the silver that was melted back in the earily '80's silver silver art bars that were minted in the 1970's. There were more silver art bars around at that time.

For example, take the silver art bars that were minted by Hamilton Mint. There were a lot of them that were minted between 1973 to 1976. There were about 10,000 of each Hamilton Mint bar that was minted back then and there were several series that Hamilton Mint made. A Hamilton Mint series of 50 art bars had a mintage of 10,000 PER art bar in that series. So, with those kinds of mintage numbers, then a whole lot of those Hamilton Mint bars had to be melted down during the early '80's. Again this is just a wild guess on my part.

When I looked at the 4th edition of Archie Kidd's book called "An Indexed Guide Book of Silver Art Bars", there were some data on certain silver art bars that were melted down and it gave the number of bars for that particular silver bar that were melted down. I do not know how they got the number of bars that were melted down but that it must have took a lot of deep searching by the authors of that silver art bar price guide. I thought that was interesting to me.

I do not think that there were many records that were kept in terms of how much of any particular silver coin or silver bar that was melted back then but I could be wrong on that too.

I am guessing on this too I think that a lot of silver bars and coins that were melted in the '80's was needed for industrial use. I guess at that time it was better for a person to send a silver coin or bar to the smelter as opposed to trying to sell that particular silver coin or bar on the retal level because since the silver went up to $50/oz, I lot of people probably could not afford that silver coin or bar and it went unsold. I guess it was better for the dealer to send it to the smelter and get money for it right away as opposed to attempting to sell it to the retail marketplace and not selling for $50 spot silver price back then. In other words, I think that there was more use and demand for it as an industrial metal as opposed to selling it to collectors.

I do not know if this answers Silver Surfer's question or not but this is just a wild guess for why silver was melted back then and why we could possibly have another "big melt" if silver were to go back to $50 (or more). Again I could be wrong on all of this.

 

I think that since Silver is used in so many commercial processes, that when prices start to rise, industries start buying quantities to stockpile. I mean, if you use 10000 oz a day in your business and the price starts to jump, you buy all you can before it goes higher. When that demand hits the smelters, they make more ingots. Of course, people who use a lot of it probably deal in futures to hedge their costs against the price of the actual bars. But I think that causes the melt to increase when prices go up. IMHO

 

When/if the price of silver quickly doubles, a lot of people will run to sell them at a profit, fearing that the price will go back down. Depending on who buys them, they might not be closely examined for numismatic value before melting. Rare coins obviously don't fit this category.

 

Are you guys paying attention??? If you are about my age its a very wise decision......... you can get a silver roosie that is poised to be worth money in our lifetime because everybody and there mother are cashing them in for less than a double cheeseburger (not a Mcdouble) LOL


Also keep in mind that Roosevelt is actually a Top 3 President all time.....In my book he is Number one ( not because I collect dimes either). the list of things he accomplished controversial or not is remarkable.

One last note, you mention 1955 being hoarded and you are spot on once again. I bought plenty of original rolls thinking I was doing something big only to realize that were plenty more being listed in auctions later

 

Please do your part and melt all your coins if silver hits $50 an ounce. That will just make mine that much more rare...and valuable....thanks in advance for your cooperation.

It is estimated that of the silver Morgan and Peace dollars minted about 17% of the original minted amounts survive today. I'd keep this in mind as they are large and to many untrained people collectible. If only 17% of those survive today, what percentage of dimes, quarters and halves survived? Keep in mind these were minted some 30 more years before they metal content was changed to nonprecious metal, and in a much larger volume. There are still plenty that have survived, but how many will survive the next melt? I don't know what you'll do, but I plan to pass my little collection to my daughter and will beg her to do the same.

 

Since I have no grandkids and my kids have no interest in coins, I will either sell them for melt or to collectors. Take the new money and take a trip or gamble with it. LOL But I sure am not going to let a dealer take advantage of my wife after I am gone.

 

Uh Oh! That's how it starts...:computer:

 

This is my sentiment, exactly. Besides, you can't make 500% profit by flipping during a massive melting. First you take what you own and send it in for melt, take the profits and buy more. Send the second batch in for melt and take your additional 10% profit, or whatever. Go to buy again and find that there isn't any available because either people are hanging on to it as the price goes up, or it is all being melted down. You now have no silver and have to sit back and watch the price go though the roof. Soon, the collector pulls out his MS69 coin and is more than happy that he saved it and didn't send it in to be melted.

YMMV.

 

There's plenty of stories about rare coins that only a few examples in MS condition exist and they are worth 10's of thousands of dollars. And then some 92 year old geezer dies and they start to look at his estate and find 5 of those rare coins in MS condition. All of a sudden the 10's of thousands of dollar coins drop like a rock and only become worth maybe $2000. So, sampling isn't necessarily a good method to decide the actual true rarity of something.

 

What's happening today is simply history repeating itself with gold and silver pricing leading to increases in melting..People have to realize that silver is a valuable industrial metal. One of the largest users of silver is actually the photograpy industry. When the price of silver is low, as it was in the late 90's ($5/oz. or so) collectors have little incentive to melt coins that yield a small profit relative to their numismatic value. Many collectors simply hold on to them for that numismatic value rather then their metallic value. And it is ironic that the last great melt of the 80's actually made the numismatic value rise for silver coins due to those coins becoming more scare to collectors, and albeit, less valuable to melters. In 2010, we are starting to see a slight repeat of the 80's silver melt. Gold today is seeing a repeat of the 1930's melt. In the future, if and when silver goes back to a level that makes melting less profitable (margins after refining, transporting, and reselling), the numismatic value will again rise for those silver coins still in existance. Collectors will prize them for their increased scarcity and historical values. Hoarders/investors will keep them around for the time when silver spikes again and melting becomes a very lucrative business once again. The lesson...You can't go wrong buying silver "junk" coins today as they currently have great metallic value but they will have increased collector value if silver dips below the "breakeven" point for the refiners. Simple supply and demand at work.