In the modern era, JM Bullion and other authorized coin dealers provide investors and collectors the opportunity to purchase gold, silver, platinum, and palladium products that boast a minimum purity level of .999. In the case of coins such as the Canadian Silver Maple Leaf, American Gold Buffalo, and Somalian Silver Elephant, the purity level is a far more impressive .9999.
While these coins are coveted by many numismatists, that does not mean that all can afford or get their hands on (due to limited supply) these beloved and valuable products. Somewhere in the middle of the field exists products such as historic US coinage containing 40% silver or 90% silver. You’ve no doubt seen these products offered before. What’s the backstory on these coins, and what’s their value as an investment tool?
Redefining “Junk” Silver
The term “junk” silver is commonly used in the industry to describe coins with 40% or 90% silver content in them. In reality, these products aren’t truly junk, as that would indicate they have no inherent or monetary value whatsoever. Were these coins truly junk, you’d just throw them out or leave them to sit in a drawer somewhere unnoticed for eternity.
Junk silver is simply a term used to describe a circulated silver coin that has no value other than that of the silver metal used to mint the coin. Only on the rarest of occasions do junk silver coins have any collectible value, and they are nowhere near the collectible or investment value offered by coins such as the Canadian Maple Leaf, American Eagle, Chinese Panda, Australian Kookaburra, and so many other products.
So, what is the allure of 40% silver and 90% silver to an investor?
Purity Comes First
Investors turn to silver precious metals as a safe haven during rocky economic times, such as the recent Brexit vote of the United Kingdom. As an investor, it never hurts to allocate part of a physical holding of precious metals to junk silver coins, due in large part to the minuscule premiums that dealers place on these products when compared to silver bullion and proof coins, as well as bullion silver bars.
However, there is a big difference between the value of 40% coins and 90% silver coins. While both remain below their bullion and proof counterparts, 40% silver coins are considered highly illiquid compared to other coins with .999 purity or greater, and even when compared to 90% silver coins.
Justifying the Discount
While both 40% and 90% silver coins are massively discounted compared to bullion and proof products, 40% silver comes with a discount that you should be wary of taking. The primary reason for this is the difficulty that comes from separating the silver content out of that product when you look to liquidate your coins by selling them.
Refiners that would be interested in purchasing 40% and 90% silver coins are going to be much more interested in purchasing the 90% silver coins because separating the 90% silver content from the 10% copper in those coins is much easier, and more valuable by weight than it is to separate the 40% silver from the other 60% metal alloy in the content of those 40% silver coins. A refiner will always factor in the cost of separating those metals should you choose to liquidate your coins, and the preference will always skew in favor of the 90% silver coins.
Make no mistake, both products are a worthwhile investment depending upon your financial means and the diversity you wish to have in your precious metals holdings, but you have to consider the curve of silver products as a whole. If you consider it as a bell curve, where .999 bullion coins represent the peak in the curve, 40% silver coins occupy the low end in price and value, while proof coins with extremely high premiums occupy the opposite end. What you’re left with in the middle are a range of coins from 90% silver to .999 bullion coins that offer the best investment bang for your buck in most cases.
Origin of 40% and 90% Silver Coins in the US
American silver coinage prior to 1965 was struck with a .900 silver content and a 10% copper content. A glut of gold, and to a similar extent silver, in the US in the mid-19th century led to the striking of coins with such high silver content, but as both metals fail to hold up to the rigors of handling and use as a medium of commercial exchange over time, copper was eventually added to increase resistance to damage and corrosion.
However, in the early 1960s the nation’s silver supply was rapidly diminishing and the Coinage Act of 1965 altered the silver content of most US coins by removing silver entirely from most coinage programs. All United States dimes, quarters, and half-dollar coins, as well as dollar coins, feature 90% silver content.
Following the enactment of the Coinage Act of 1965, all dimes dated 1965 and later are clad coins that contain no silver at all. These coins feature a cupronickel alloy with a copper center. US quarters dated 1965 and later are all copper-nickel clad coins with the exception of dual-dated Bicentennial Quarters, which contain 40% silver and were sold only in Mint Sets and Proof Sets from the San Francisco Mint.
Additionally, the half-dollar coins dated 1965 through 1970 feature 40% silver content. Those half-dollars dated 1971 and later are copper-nickel clad coins, again with the exception of Bicentennial Half-Dollars sold by the San Francisco Mint in Mint Sets and Proof Sets (40% silver). Lastly, Eisenhower Dollar coins dated 1971 to 1974 feature 40% silver.
Popular Designs with 90% Silver Content
The most popular, currently available, 90% silver US coins are dominated by the dime, quarter, and half-dollar. Most of these coins date from 1892 until the cessation of 90% silver coining in 1964. The popular designs you’re likely to find include the following:
- Barber Coinage: Charles E. Barber was Chief Engraver of the United States Mint from 1879 until his death in 1917. In the early 1890s, he was responsible for the redesign of the dime, quarter, and half-dollar coins to replace the Seated Liberty image from Christian Gobrecht, Philadelphia Mint engraver whose designs were dated from the 1830s. Barber’s Head of Liberty design was featured on the obverse of all 3 coins, while his dime design featured a wreath with face value and his quarter and half-dollar designs included the torch, olive branch, and oak leaves.
- Standing Liberty Quarter: Created in 1916 by Hermon Atkins MacNeil, this design replaced the Barber Coinage series quarter in 1916 and ran until 1930. It featured Liberty standing in the gap of a wall, with the American heraldic crest on a shield in her left hand.
- Washington Quarter: Still in circulation, this 1932 creation of John Flanagan replaced MacNeil’s design and remained 90% silver until 1964.
- Mercury/Winged Liberty Dime: A creation of Adolph A. Weinman, this image is one of the nation’s most iconic and was in circulation from 1916 to 1946.
- Roosevelt Dime: Another image still in circulation from the mid-20th century, the portrait of President Roosevelt came to the dime just a few months after his death in 1945 while in office for a fourth term. Roosevelt Dimes with 90% silver content are dated between 1946 and 1964.
- Walking Liberty Half Dollar: One of the two most iconic designs ever to grace an American coin, Weinman’s beloved Walking Liberty was on the half dollar from 1916 to 1947, and now graces the American Silver Eagle series.
- Franklin Half Dollar: The image of Benjamin Franklin, a favorite of then-US Mint Director Nellie Ross, came to the half dollar following the Walking Liberty design in 1947/48, but last only until 1963.
- Kennedy Half Dollar: Only one year of issue for Kennedy Half Dollar coins contains 90% silver, the initial year of 1964. Kennedy was put on the half dollar in commemoration of his life and service just three months after his assassination while in office.
On a particularly fun side note, the Kennedy Half Dollar remains one of the harder-to-find 90% silver coins. When these coins were first released into circulation starting in January 1964, so many Americans were still in shock from his death and began to collect the coins as a matter of remembering him. Given the collectible value at the time and the one-year issue of 90% silver versions, finding these coins isn’t always easy.
Look for 90% Silver from JM Bullion
Keep an eye on our online catalog in the weeks ahead as 90% silver products, including many mentioned above, come to our collection for investors to purchase. If you have questions, you can contact JM Bullion at 800-276-6508, chat with us online through our website, or send us an email.
*Comments in this blog regarding the investment value of 40% and 90% silver are strictly for the purposes of this post, and do not replace the value of financial advice from trained professionals.
