Team, As many know 1964 was the last year 90% silver was used in regular US coinage, after which 40% was used for a few years until 1970 when it stopped altogether. What was the reason or reasons for this change? It's odd that nearly all the world silver coinage also followed this change in the early to mid 1960s as well and switched to clad. I'm sure it's a pretty well known/obvious reason but has escaped me never-the-less Take Care Bone
The price of silver had risen to a point that the dime, quarter, and half dollar had a melt value above their face value. It was for similar reasons that they switched the Cent from copper in 1982.
By 1964, silver was approaching $1.29 an ounce, the point where a subsidary US silver coin had a melt value exceeding face value. As it crossed the threshold, there was a general fear that all the silver coins would be pulled from circulation, crippling commerce. Throughout 1964 and into 1965, massive quantities of 1964 dated coins were minted and dumped into circulation, the idea being there would be so many so easily obtainable that people's hoarding instincts would be quenched. Massive quantities of 1965 dated clad coins were minted and stored, ready to take the place of the silver coins once minting of them was stopped for good. The perceived need for a "prestige" coin prevented the half from going non-silver all at once. it finally went non-silver in 1971, being 40% silver form 1965 to 1970. I don't know the details of other countries switch over as well. England went from sterling silver coins to 50% silver in 1920, and to no silver at all in 1947. Irish coins lost their silver shortly thereafter, in 1950.
The "REASON" why silver was eliminated from coinage is that it was hampering the ability of governments to run massive budget deficits and finance them through the various central banking systems. The price rise in silver was, in reality, a reflection of the debasement of the currency that was taking place. This forced the government to make a massive bet that they could circulate coinage with no intrinsic value and require its acceptance though a campaign of deception plus enforcement of legal tender laws. It worked. But the result is that prices at the present time are approximately 8X higher than they were in 1964. The more proper way to view this is that the money in your pocket has lost 85% to 90% of its purchasing power.
Cloudsweeper's explanation aside, could the government have somehow raised the value of the dollar instead? I mean, instead of maintaining that, for instance, silver quarters had become more valuable than .25 dollars, couldn't everyone have just said, "Hey, this one dollar bill is worth more now because these four quarters are worth more now." ?
There was signficant inflation before the silver was taken out of coins. What $1 bought in 1946 took $1.60 in 1964. Coins in 1964 were a tiny part of the money supply, then as now being mostly demand accounts in banks and other financial institutions. From the 1870s on silver coins were tokens, and money because the government said they were, not for the value of their silver. A silver dollar in 1940 had about twenty-seven cents worth of silver in it. In 1961, it was still just eighty cents worth. It's true that inflation accelerated as the 1960s went on, but that had to do with the government spending billions it didn't have fighting the Vietnam War, funding Great Society programs and sending men to the Moon. The fact that clad coins were tokens wasn't a factor; silver coins had been tokens for the previous nearly 100 years.
If you really research it you will find that 90% silver coins were minted till 1970---and they were all dated 1964......the Gov. kindof put up a date freeze. Speedy
Partly true. The elimination of silver coinage was the last step in a very long process of removing any intrinsic value from the money supply. First came the demonitization of silver, followed by gold. The final elimination of silver coins completed the process. But it is incorrect to call silver coins "tokens" because the silver content ensured that they had significant intrinsic value whether or not the government wanted to admit it. If the silver coins were "tokens," they wouldn't have been hoarded, and they wouldn't still command significant value in excess of face or numismatic value.
Token coinage is by definition coinage that has less intrinsic value than face value. US silver coinage was token coinage after the Bland-Allison Act of 1878, except for the occasional spike in silver value during periods of uncertainity, such as World War I. As I observed earlier, the silver in a silver dollar was a small percentage of its face value for decades. The fact that minor coins didn't even contain a token amount of silver after 1970 wasn't the culprit behind the "process of removing any intrinsic value from the money supply". That was accomplished in name in 1933 but had been in fact since 1907. After the latter date, only a small fraction gold of the gold needed to redeem all the paper money in circulation - and supposedly redeemable in gold on demand - was on hand. The convertablility of paper money into gold was a bluff thereafter. So long as most people didn't try to redeem their paper money for gold, there was enough gold to redeem any note that was actually proferred. So long as people perceived they could get gold for their paper money whenever they wished, most of them didn't care to do so. $1000 in paper money (even in large size notes), fits in your pocket. Fifty ounces of gold is a burden to carry and hard to conceal. This bluff was called in 1933, when four years of depression and bank failures convinced enough people to hoard gold that it essentially vanished from commerical channels, contributing to the final collapse of the banking system in the days prior to FDR's inauguration. That's why the government was forced to go off the gold standard in name as well as in fact at that time.
I have always considered that more of the reason that gold was eliminated from circulated coinage, but I guess that same would hold true for silver.
Silver dollars still continued to be minted with the Coinage Act of 1792 standard weight of 371.25 g which is the definition of a dollar. The price of silver measured in gold dollars after the shift to the gold standard was less than a gold dollar, but the intrinsic value of the silver dollar remained. The effect you cite refers to the exchage rate between the two as the eastern banking establishment, which kept its reserves primarily in gold, fought for market share against the faster growing western banks, which kept their reserves mostly in silver. It really has nothing to do with token coinage.
Do you have a link or know were you read that? I do you call reading a few years ago that some '64s were minted in '65, but I don't recall them going as far a '70
You don't have to go far HERE - scroll down. But it was only for 3 years in all but one denomination and that was 4 yrs, not until 1970. But I think Speedy is right in one way, if I recall correctly the law that allowed it to happen was not repealed until 1970.
"Knowledge Through Education" 1964 Coins Minted For Three Years! by Ken Potter -- NLG July 14, 2003 This 1964 Straight Clip Dime Could Have Been Minted Anytime Between Jan 1964 and April of 1966 While most collectors believe that 1964 was the last year that the United States Mints struck 90% silver coins for circulation -- 1966 was actually the last year of the 90% silver coinage output for circulation! Specifically, 1964 dated 90% silver coins were produced from January 1964 through April of 1966! According to Domestic and Foreign Coins Manufactured by Mints of the United States 1793-1980, published by the Department of the Treasury/Bureau of the Mint: "Public Law 88-580, Sept. 3, 1964 authorized the Mint to inscribe the figure 1964 on all coins minted until adequate supplies were available. Public Law 89-81 repealed that legislation . Coins bearing the year 1964 were produced from Jan. 1964-Apr. 1966". The date freeze was initiated by the government as a stratagem to fool the public into believing nobody was hoarding silver. The theory was if they kept dumping millions of 1964 dated silver coins into circulation long after the date "inscribed" on the coins, it would appear as though nobody was hoarding. It was also hoped the record-shattering mintages would be so high collectors and investors would refrain from stockpiling rolls and bags of the coins as potential collectibles (the 1960s were the peak years of the "roll boom" when it was thought by many saving rolls - even bags of each issue was sure to result in huge profits at the end of the rainbow). The Mint’s action hoped to "buy" time to produce enough clad coin to replace the silver coins and time to develop sorting machines to quickly withdraw the silver coin once enough clad coin was produced. The government's attempt to circumvent "Gresham’s law" failed and the more silver the Mints poured into circulation the more silver the public was able to hoard. It’s also interesting to note the government’s "date freeze" and concurrent production of silver and clad coinage created a scenario that allowed for an occasional silver planchet to slip into the presses striking clad date coins and an occasional clad planchet to slip into the production of the 1964 dated silver coins. These pieces are referred to as "Transitional Errors" and are highly sought after and command prices in the three to four figures range. According to The Illustrated Error Coin Pricing Guide by Geoffrey Noe, 1965, 1966 and 1967 Roosevelt dimes are known struck on silver planchets, 1965 Washington quarters are known struck on silver dime planchets (Yes - you read that right!), and at least one 1964 dated Kennedy half is known struck on clad planchet. In the past I’ve owned a 1966 Roosevelt dime struck on a struck 1962-D silver dime! Opinions expressed in articles or other features posted on the CONECA web site do not necessarily represent official CONECA policy or those of it's officers. The act of submitting material shall constitute an expressed warranty by the contributor that the material is original; if not, the source and permission must be provided. Counters provided by Andale. I never knew this ! I knew they dropped mintmarks during this era, but not that 1964 coins were made right alongside other years. I'm surprised there aren't a whole lot of errors out there.
