Silver bullion and U.S. Silver coinage

When coins had intrinsic value

On September 9th, 1963 the price of pure silver hit $1.293 per ounce. That was a new record for the 20th century and it caused a problem for the U.S. Treasury Department: coins in circulation were now worth their face value. That is, counting the cost of refining to pure silver (coinage was 90% silver at that time), a silver dollar in the palm of your hand was actually worth one dollar for the value of the silver in it.

There were few if any silver dollars actually in circulation by 1963, but dimes, quarters and half dollars were and they also contained 90% silver. Silver dollars did turn up now and then — they were the chips used at casinos and were popular as Christmas presents.

Ten silver dimes would have weighed just a tiny bit less than one silver dollar, so even the minor coins were in danger of being worth more than their face value.

The end of silver coinage

It was the rising price of silver that caused us to stop using that metal and change in 1965 to the “clad” coins you might have in your pocket right now. These are made with alloys of copper and nickel, so are in no immediate danger of being worth more than their face value. Today, with silver prices much higher than they were then, making this change may seem like the most obvious and necessary thing to do, but there was not complete agreement on that back then.

It was not an easy change. The new coins had to work with vending machines, which were more popular then than now and most accepted only coins.

Make more Silver Dollars

In hindsight, it seems almost incredible that two Montana Senators (Mike Mansfield and Lee Metcalf) proposed a bill that would start minting silver dollars again. These large coins had last been minted in 1935. The Senators solution for the price problem was to reduce the silver content to 80%, which obviously would not have solved the problem for very long. Silver was $1.63 an ounce by 1970 and surged way up in 1980, only to settle down to the $4-$5 range for a number of years. Those 80% silver dollars would have been worth far more than face value. As I write this in April of 2020, silver is trading at around $15 an ounce, so those dollar coins would be worth $12.00 for their silver alone.

The Senator’s interest came because Montana was and is a mining State. The more silver demand, the better for Montana. The law actually passed and coins were made, but all were destroyed before being released to circulation.

Or were they all destroyed? Some may have escaped destruction.

A “fantasy” piece from my collection. Moonlight Mint overstruck these on genuine peace dollars.

Demand for Silver

Silver has many uses (see Wikipedia for details). One use that was quite strong then was photography; that has diminished greatly due to digital cameras, but at that time most people expected that use to increase.

However, the demand I’m speaking of and that the Senators wanted silver dollars for was Silver Certificates. We don’t have these today — they were no longer produced starting in 1965. Each originally had the following promise:

“This certifies that there is on deposit in the Treasury of the United States of America (number) silver dollar(s) payable to the bearer on demand.”

That was later changed.

“This certifies that there is on deposit in the Treasury of the United States of America (number) dollar(s) in silver payable to the bearer on demand.”

That change turned out to be important, as we will see.

If you did march down to the Treasury back then and demand that they make good, they would have paid you then in silver dollars. With the increase in silver prices, people started doing just that and then selling the coins, some of which had value to collectors even beyond the silver price.


As I mentioned, casinos were big users of silver dollars. First, that was the tradition. But also chips such as are used now are easier to counterfeit and (of course) cost money to manufacture. Silver coins are much harder to fake.

With rising prices, silver dollars started exiting casinos, so of course casino owners gathered up silver certificates and went to cash them in.

In April of 1964, those casinos cashed in silver certificates for some 18 million silver dollars and hauled them back to Nevada.

Numismatic value

The Treasury had plenty of silver to hand out — there were some 1.8 billion dollars in silver certificates outstanding in 1963 and there were 1.7 billion ounces of silver stockpiled. That was not a problem.

What was a problem, or an opportunity (depending on your point of view), was that many of the silver dollars being handed out had numismatic value — that is, they were valuable to coin collectors.

For an example, until 1962 the 1903-O (“O” meaning that it was produced at the New Orleans Mint) silver dollar was a very rare coin in uncirculated condition. In 1962, many thousands of that date and mint-mark came out of Treasury vaults, driving the price down so much that, for a while, they were selling for no more than any other common date. As I write this, they sell for hundreds and even thousands of dollars in the highest conditions.

Cherry picking rare dates prior to silver prices climbing sometimes involved trading in for a $1,000 bag, removing any rare dates and then returning the rest to the Treasury — that must have been annoying. As prices started to rise, no returns were made.

The numismatic potential was not lost on our Government. They halted handing out silver dollars and instead told people to take their silver certificates to Assay Offices in New York or San Francisco. There, the bearer would be handed an unmarked brown envelope containing .77 ounce of silver (one dollars worth at the time). Needless to say, not too many folks were interested in that trade!

At this point, the Treasury had only about 3 million dollars remaining. This was also when Senator Mansfield made a passionate speech on the Senate floor asking Congress to “rescue a major American tradition” and strike 45 million new 80% silver dollars.

That law actually passed. President Lyndon Johnson signed it into law in 1965 and — perhaps even more amazing is that in that year, the U.S. Mint in Denver struck over 300,000 dollars dated 1964! These were remelted and not released to circulation (though rumors of very illegal 1964 silver dollars turn up now and then).

It was not until 1970 that Congress figured out what to do with the remaining silver dollars. The coins were sorted, graded, packaged and offered for sale in 1972. There was not tremendous interest, so that was shelved and tried again in 1979. This time there was more demand and all were sold by 1980, though not without controversy.

So, there are no more bags of silver dollars sitting in Treasury vaults.

Decades later, everything has changed. Casinos use chips and often just electronic cards that store your money while you are in the casino. Digital cameras have cut the photographic use of silver by 70% and it is still falling. You will almost never find a silver coin in circulation (I did find a dime in 2014, though).

Is silver a good investment? At today’s prices, it may not be — though I do think it’s not at all a bad idea to have a few silver coins around in case of economic collapse. I like the older “Mercury” dimes for that. They are apt to have numismatic value and are therefore slightly more expensive, but they are easily recognizable as being silver. That isn’t true for the later Roosevelt series, which became “clad” in 1965 and therefore require closer examination.

A 50 coin roll of those Mercury dimes might run you around $100 or so today. If you can afford it, a few 1/10 ounce gold coins would be nice too, but if you are trying to buy food in a time of economic collapse, a tenth ounce of gold is a lot to pay for a meal. A silver Mercury dime might be just about right.

Mercury dimes

You can also buy 1 ounce bars of .999 silver. These are a bit more bulky than dimes, but their value would naturally be higher — a bar like that might buy you safe lodging for a week.

A silver bar

Also interesting is that silver can purify water. I think I’d rather have water purifying tablets, but in an emergency you might want to remember that. Sunlight works too, so both together might be better than nothing at all.

These things are not my interest. I love these coins for their beauty and the historical connections.

Originally published at Edited, updated and expanded for Medium. Collecting and learning about coins has been a fascinating hobby that has taught me so much. There is history, art, engineering, greed, robberies, politics and more. Today coins have nearly vanished from our daily lives, so not many children become interested. I think that’s sad.


Uses for Silver, 1964 Congressional Record Reprint — Silver Dollars, In Answer to Inquiries Concerning 1964 90% Silver Dollar Coins, 1964 Morgan dollar discovery reported in new book, Decline in Photographic Use, Silver Certificates, 300,000 dollars dated 1964, 1903-O Morgan Dollar Values, GSA Silver Dollar Sales, Silver as a Bacteriostat

Retired Unix Consultant. Kicking back and enjoying writing now. Not seeking work, not selling anything. No longer responsible for my old aplawrence site.

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