Why Did the United States Stop Putting Silver in Its Coins?
In its early history, the United States issued full-bodied coins whose stated face values matched the value of their metal. Over time, silver became more expensive relative to gold, and additional circumstances created complications for the Federal Reserve. This article explains why the United States ultimately stopped using silver in its coinage.
How Was Silver First Used in the United States?
Soon after the United States was founded, the nation used a bimetallic monetary system based on gold and silver. The founding fathers established in the Constitution that both gold and silver could serve as acceptable currency. In everyday use, however, consumers relied much more heavily on silver because it was easier to obtain.
Silver Coin Shortages in the United States
During the middle of the 1800s, silver rose in price relative to gold after several major gold deposits were discovered, including the California Gold Rush of 1848-55. Since U.S. silver coins contained 90% silver, their bullion content soon became worth more than their stated face values. That difference encouraged speculators to hold onto and melt down silver coins, resulting in repeated shortages. Congress therefore passed the Coinage Act of 1853, cutting the silver content of nickels, dimes, quarters, and half dollars by 7%.
The Decline of Silver Coins
The 20th century brought many additional uses for silver, including photographic film, electrical parts, and batteries. Demand for the metal then quickly exceeded worldwide supply, creating more shortages of silver coins. Although 26 million silver half dollars were minted in 1964 as a tribute to the recently assassinated John F. Kennedy, more than one-third were hoarded and did not circulate. President Lyndon B. Johnson worked with Congress on the Coinage Act of 1965, ending silver use in dimes and quarters while lowering it in half dollars. A few years afterward, half dollars lost their silver as well. Dimes, quarters, and half dollars instead used nickel-and-copper compositions. When this article was originally published, those coins had intrinsic values far below their face values.
These shortages illustrate the long-standing view that silver bullion and coins can be worthwhile investments. At the time of publication, Atlanta Gold & Coin Buyers described itself as the premier coin dealer in the Atlanta area and stated that it provided transparent, professional service to every client.
At the time of original publication, the article described the following: When originally published, readers seeking an appointment with the experts were invited to give us a call today!
