The United States has minted coins in several denominations since the inception of the US Mint in 1792.  As other countries did, coins were made of silver and gold for larger denominations and copper for smaller denominations such as the half cent and large cent coin.  The reason for this was simple; a silver cent would have been a very small coin.  Nickel as a composition would not be introduced until the Shield Nickel in 1866.  Early on, the silver coins had different percentages of silver than what we know of today.  The half dime, which as the 5 cent coin of that period, contained 89.24% silver.  The first dimes, quarters, half dollars and dollar coins of the time also contained 89.24% silver.    

This seemingly odd percentage of silver continued for these coins until 1837 for dimes, 1838 for quarters, 1836 for half dollars and 1837 for silver dollar coins. The change was mandated by The Law of January 18, 1837 to 412 1/2 grains in weight and .900 fineness.  From that point on, through 1964, dimes, quarters, half dollars and dollar coins contained 90% silver. Twenty Cent Piece coins were also made out of 90% silver.  Also interesting to note is Three Cent coins were first made out of a 75% silver alloy (1851 – 1853) and then conformed to the 90% alloy beginning in 1854 through 1873.  It should be noted that there were Three Cent coins also issued from 1865 through 1889 that were a copper-nickel alloy.

There was not too much concern regarding the amount of silver in coins, as the coins had more face value than silver and no matter what happened, would always have a value of silver as well.  In 1950, the price of silver was 75 cents per ounce.  It quickly shot up to around 90 cents per ounce, then back to 85 cents an ounce and then gradually went back to 90 cents an ounce by the end of the decade.  In November 1961 the government suspended silver bullion sales by the Treasury at the formerly fixed price of 91 cents.  Once this happened, quotes for silver began to rise and by 1963, silver reached $1.29 per ounce.  At this price a dime had 9 cents of silver value and a quarter had 23 cents silver value and this was a growing concern in the government.  Demand for silver for manufacturing had risen during the last several years and showed no sign of slowing down.  As supply continued to dwindle, mostly because mining and recovery of older silver could not keep up with demand, Washington debated over silver's future role in coinage and settled on a copper-nickel composition for dimes, quarters and a 40% silver alloy for half dollars. 

In 1965 dimes and quarters were made out of a copper-nickel composition as the price of silver was going up to the point that coins were worth more than face value due to their bullion content.  Half dollars from 1965 through 1969 were made out of a 40% silver alloy and then in 1971, half dollars were made out of the same material as dimes and quarters.  Production of silver dollars had ceased in 1935, expect for some experimental Peace Dollars made and destroyed in 1964. 

This change obviously caused hoarding of silver coins.  It is interesting to note that coins dated 1964, and still made of silver were made well into 1965 to keep up with demand.  By 1968, silver was up over $2.00 per ounce which put the silver value of a quarter at 36 cents. Most silver coins disappeared from circulation very quickly.

So then, what is considered Junk Silver?  First, the term is an industry term and does not really mean the coins are junk.  It is just an industry term.  Now, the answer is not quite as easy as you might think, but it is not that hard either.  First, junk silver is usually considered to be coins that have no numismatic value.  They are usually silver coins where the price of silver has caused the bullion value of the coin to exceed any numismatic, or collector value.  To illustrate this point, I will use an example of a common date Mercury Dime.  Let’s say when silver was around $4.00 per ounce the bullion value of a common 1945 dime was 29 cents.  The collector value might have been 35 cents for an average coin.  The value of a 1945 dime in AU condition might have been 90 cents.  I do not have an old pricing magazine available so this is just an illustration.  Now imagine silver goes up to $10 per ounce.  The common 1945 dime now has a bullion value of 72 cents.  Here the bullion value has now exceeded the numismatic value.  The average 1945 dime still may have the same demand from collectors, but since silver is now at $10, the value of the coin is 72 cents.  Now image silver goes up to $15 per ounce.  The silver/bullion value of the dime is $1.09.  This now exceeds the numismatic value of the average condition dime as well as the AU dime.  With silver around $40 per ounce, you can see why most Mercury Dimes now have a bullion value exceeding numismatic value.

In this example, I used a very common 1945 dime.  The same logic holds true for coins with higher numismatic value.  As silver continues to climb, $40 per ounce as I write this, the bullion value of many coins has exceeded the bullion value.  So then, is there a general guideline of Junk Silver vs. Collectible silver?  In general terms yes.  The chart below is my guidelines.  Please note, this will vary by dealer.  Additionally, as silver continues to climb, more and more coins that carry numismatic value today may be reduced to junk status simply due to the increase in bullion value.  This merely means the bullion value has now exceeded the numismatic value.

 So what should you do if you have silver coins dated before 1965?  Take a look at them and inventory them according to the chart above.  Once done, I can provide you with a quote to determine their worth.  From there it is up to you.  Contact us for a Quote.  If interested in learning more about how to value coins, please see What Makes a Coin Valuable?

 

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