All major U.S. coins before 1965, excluding the nickel and penny, contained 90% silver content. The term “90% silver” is a short way for investors, collectors, and buyers to refer to pre-1965 dimes, quarters, half dollars, and dollar coins, as a group. The term also serves to differentiate these coins from post 1964 coinage. Typically these coins are not considered for their numismatic value, and they are often traded for their silver bullion content in $100, $500, and $1000 face value rolls or bags.
This is the beginning of an in-depth, or “ultimate” guide – if you will, about 90% silver coins. Investing in 90% silver coins is not only a black and white subject of values going up and down over time on a spreadsheet. People choose to collect these coins for personal, practical, and even historical reasons. Often, the stories that lead one to collect come from generations passed and can include milestones and memories from the lives of their loved ones. I’d like to share one such story, and how I discovered the true value of 90% silver coins. It begins with an anecdote from more than 70 years ago.
Born on March 8th, 1926, Billy Gene Lemons grew up in the tiny village of Ringgold, Texas. During World War II, he was drafted into the US Army and stationed in Munich, Germany. While in the army, he received medals of honor for distinguished service as a sharpshooter and marksman. He also achieved the rank of corporal, serving as a Military Policeman. While in Munich, he along with others, had the responsibility of guarding the headquarters of visiting dignitaries and VIPs who were there to oversee the occupation forces. One of those dignitaries was General George S. Patton.
Corporal Lemons’ military stint was not the stuff of epic movies, but to his family and friends, he was a hero deserving of all the honor and respect due the men and women who served in World War II. Decades later, Billy loved telling his family the story of how the troops were instructed not to eat food given to them by the locals – for fear of being poisoned by Nazi sympathizers.
On one occasion, while riding a troop train, a resident family of the occupied city had pitched a large chunk of cheese on the train in appreciation. As commanded, the soldiers were not going to eat it, but one man could not resist. He cut off a big piece and began to enjoy it. A few minutes later the train traveled into a tunnel. As it became pitch black, the same soldier screamed, “Damn it boys, don’t eat any of that cheese! I’ve gone blind!” The squad knew better, and had a big laugh as they came back into the sunlight.
Billy Gene Lemons was my grandfather. In September 1990, my grandfather passed away as the result of a brain tumor. I was nine years old at the time. Among the many things left to my father were a variety of foreign and domestic currencies my grandfather had collected during his time in Europe and throughout his life.
The currencies included German marks and an old bank bag containing approximately 100 half dollar Kennedys, most of which were from 1964, making them 90% silver. Billy Gene Lemons knew what most didn’t at the time, which I believe is illustrated in this quote.
“Lenin was right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” – John Maynard Keynes (1883 – 1946), Economist
Billy had been keeping every half dollar he got his hands on since the early 1970’s. First, because JFK was a great and short-lived US president, these coins would have historic value. Second, he collected them because he knew they were worth more than their face value due to the debasement of government-issued coinage throughout history.
“The farther back you can look, the farther forward you are likely to see.” ― Winston Churchill (1874 – 1965), Former British Prime Minister
War is another thief of a nation’s wealth, second only to the severity of a government debasing their country’s coinage. Many times the reason why the debasement is justified is to fund war. This story isn’t new. History has continued to repeat it self and it always ends the same.
a) reduce (something) in quality or value; degrade.
b) lower the moral character of (someone).
c) lower the value of (coinage) by reducing the content of precious metal.
The “c)” definition is the one we are referring to in this guide. Currency debasement of coins has been happening for more than than 2,400 years and in every major empire beginning in Athens, Greece, with the last time being in 1965 in the United States. It’s what every major empire has done right before a major fall, or revaluation of the currency. Typically, those that hold onto their gold and silver come out on the other side in a much better position.
According to Sir Thomas Gresham, a British Economist in the mid-16th century who formulated the principle known as Gresham’s Law:
“When coins of equal face value but different intrinsic value are put into circulation side by side, the coin with the higher intrinsic value will be hoarded and only the coin of lower intrinsic value will remain in circulation.”
Others have also been given credit for this observation, such as Nicolaus Copernicus (Copernicus Law); however Gresham is cited the most in recent history.
Below is a timeline of some pivotal moments in ancient history leading up to modern day legislation that have debased the coinage, often with a result of great inflation and eventual economic downfall of an empire.
c. 2250- c. 2150 BC Cappadocian rulers guarantee quality of silver ingots:
The state guarantee, probably of both the weight and the purity of her silver ingots, helps their wider acceptance as money.
c. 640 – c. 630 BC The first true coins produced in Lydia:
The earliest coins made in Lydia, Asia Minor, consisted of electrum, a naturally occurring amalgam of gold and silver.
c. 550 BC Lydians produce separate gold and silver coins:
During the reign of Croesus the Lydians began to produce coins of pure metal instead of electrum. These were the world’s first bimetallic coinage.
406 – 405 BC Athens issues bronze coins with a silver coating:
The Athenian public hoards silver coins which as a result, quickly disappear from circulation, leaving only the inferior bronze ones.
269 BC Regular issues of silver coins are minted by the Romans and widely circulated:
Despite the example of the Greek colonies on the southern Italian mainland and Sicily, and the example of Carthage, the Romans are relatively late in adopting coinage.
30 BC – 14 AD Reign of Augustus Caesar:
Augustus reforms the Roman monetary and taxation systems issuing new, almost pure gold and silver coins, as well as new brass and copper ones. He also introduces three new taxes: a general sales tax, a land tax, and a flat-rate poll tax.
54 – 68 AD – Nero – The First Debaser:
He slightly debases the gold and silver coinages, a practice copied by some later emperors, starting mild but prolonged inflation.
250 AD – Silver content of Roman coins is down to 40%:
At this level inflation accelerates.
270 AD – Silver content of Roman coins has fallen to only 4%:
284 – 305 AD – Reign of Diocletian:
Diocletian makes vigorous attempts to get to grips with the problem of inflation using a variety of methods but these prove only partially effective at best.
295 AD – Diocletian reforms the coinage:
This fails to halt inflation, probably because the older coins remain in use and, in accordance with Gresham’s law, drive the good coins out of circulation.
c. 675 Silver starts to displace gold in Saxon coinage:
Initially silver is used with gold as an alloy but early in the 8th century silver and base metals are the only ones used.
1100-1135 Reign of Henry I:
The quality of England’s silver currency falls drastically.
1124 Punishment of the mint masters:
At the Assize of Winchester on Christmas Day, all the mint masters are punished by having their right hands cut off. Not surprisingly, this produces a temporary improvement in the quality of the coinage.
1344 The Weight of the Penny is Reduced:
To reduce the temptations offered to illegal exporters of coin, the weight of the penny, which had remained almost unchanged for 200 years, is slightly reduced.
1351 Another Reduction in the Weight of the Penny:
Edward III makes a more substantial reduction than the one he made in 1344.
c. 1455 China abandons paper money:
There are no known references to paper money being in circulation after this date. Thus, after well over 500 years of experience with paper currencies, during which there have been repeated episodes of inflation and currency reform, China ceases to use paper money.
1526 Nicholas Copernicus writes his Treatise on Debasement:
With many provinces of his native Poland and other parts of Europe suffering from debasement the great astronomer argues that it is the total number of coins in circulation, rather than the weight of metal they contain, that determines the level of prices and the buying power of the currency.
1542-1551 The Great Debasement:
Henry VIII debases the coinage of England as a means of raising revenue. In Ireland, the debasement started earlier, in 1536, and did not finish until 1560.
1560 Elizabeth I begins the reform of England’s debased coinage:
This is a first step toward the complete replacement of the debased coinage she inherited from her predecessors. Thomas Gresham, after whom Gresham’s law (“bad money drives out good”) is named, is an influential adviser. The debased coins are recalled and melted down, and the base and precious metals separated. The recoinage program is completed in 1561.
1640 Seizure of the mint by Charles I:
In another move to solve his financial problems, Charles I seizes the mint and keeps one-third of the bullion for six months.
1792 US Coinage Act:
The Dollar is adopted as the unit of account, based on a bimetallic standard, subdivided into 100 cents. Foreign coins are supposed to lose their status as legal tender within 3 years of the US coins coming into circulation.
1795 Hyperinflation in France:
The total nominal value of the assignats in circulation reaches 20 billion livres. Riots in Paris pave the way for the rise of Napoleon.
1796 France replaces the assignats by a gold-based currency:
This has the effect of drawing bullion back from Britain.
1806 President Jefferson suspends the minting of silver coins:
This is because of the tendency of these new coins to disappear from circulation, as an unintended consequence of the US 1792 Coinage Act.
1816 Privy Council recommends establishment of the gold standard:
This proposal is accepted, and in accordance with a related proposal, a new British one pound coin made of gold, the sovereign, is produced.
1834 US Coinage Act:
This makes a slight reduction in the value of silver relative to gold in order to encourage more gold to be brought to the mint. However, it hastens the disappearance of much of the remaining silver in circulation.
1853 US Subsidiary Coinage Act:
The silver content of half dollars, quarters, and dimes is reduced by about 7%, making it no longer worthwhile to sell them to silver metal dealers. Therefore, the new coins remain in circulation.
1861-1865 The US Civil War:
The Confederacy finances its war effort mainly by printing money. In addition to the Confederate notes, the States, railway, insurance, and other companies also issue notes. The resulting hyperinflation renders Confederate paper worthless. By comparison, inflation in the North is relatively moderate as the Union government raises very substantial sums of money by taxation and borrowing.
1862 US Legal Tender Act and the issue of Greenbacks:
The United States Treasury starts issuing notes that are not convertible into silver or gold but are legal tender for all purposes except payment of customs duties and interest on government securities.
1865 US Contraction Act:
By the end of the Civil War, the Greenbacks are only worth half as much in gold as their nominal value. Under the terms of this act, the government begins to withdraw them from circulation.
1861 US Congress suspends convertibility of notes into specie:
Priority in the use of gold and silver is given to government purposes as a result of the war.
1873 US Coinage Act:
The silver dollar ceases to be the standard of value. Thus, the US is virtually on the gold standard, in practice if not in law.
1971 Britain decimalises its currency:
Instead of 12 pence in a shilling and 20 shillings in a pound, the pound is divided into 100 new pence.
1971 The US abandons the gold standard:
As the system of fixed exchange rates starts to break down the US devalues the dollar twice and then gives up the attempt to fix its price in terms of gold.
1965 Coinage Act:
This eliminated silver from the circulating United States dime (ten-cent piece) and quarter dollar coins. It also reduced the silver content of the half dollar from 90 percent to 40 percent. Silver in the half dollar was eliminated by 1970 through another law.
Information adapted from A History of Money from Ancient Times to the Present Day by Glyn Davies, rev. ed. Cardiff: University of Wales Press, 1996. 716p. ISBN 0 7083 1351 5
As you can see, governments love to debase the currency as a hidden form of taxing, which causes inflation. There ends up being more coins with less value chasing the same amount of goods, which makes the price of those goods go up.
According to a 25-year chart, the average price of silver was $8.73 an ounce in September of 1990. That would put a value of about $316 on my grandfather’s collection of Kennedy half dollars at the time of his passing.
Inflation-Adjusted Spot Silver Price Chart
Chart courtesy of Macrotrends.net
My father gifted those half dollars to me in 1995. A few years later, a thief would steal them all. I’d like to believe the thief ignorantly spent them for their face value of $50 instead of selling them for their silver content. After I realized they were gone, I was overcome with grief. It wasn’t until April 2011 that I realized their silver content. In 1999, I was devastated because of the loss of sentimental value in the collection, but in 2011 I was devastated by the financial loss due to the current spot value of silver. How much was lost?
It was definitely not the $50 face value of 100 half dollar coins! The loss of value included the rise to $52.26 an ounce spot price of silver in April 2011. Those circulated, but good condition, coins contained approximately 36.2 troy ounces of silver, a metal value of $1,890 in April 2011. That doesn’t count the premium, which could have been as much as 5% on top of spot.
Even in January 1980, when my grandfather was still alive, the inflation-adjusted melt value would have been $3,947. That’s not chump change! Before they were stolen, I didn’t have my grandfather there to yell at me for the stupid mistake of showing off our collection.
That was an expensive and gut-wrenching lesson learned. What started as an inherited coin collection of sentimentality, ended with an understanding of the market value of 90% silver coins.
Other than through inheritance, why would someone go out of their way to own 90% silver coins alongside or as an alternative to silver bullion? I’m glad you asked.
From a big picture standpoint, let’s just say the reasons for buying 90% silver coins range. Here are reasons for owning and investing in 90% silver coins.
1. Face Value
Some aren’t comfortable with rounds without a face value, not because they don’t know the value, but because buyers might not. Familiarity and trust is key when trying to liquidate silver bullion. However difficult, it is still easier to counterfeit a silver bar versus a coin, thus 90% coins could hold more weight (no pun intended) with buyers, since they hold a recognizable and accepted face value that is legal tender by law.
2. Sentimental Value
Unless a relative was a serious collector and owned graded coins in protected certified slabs and you knew this, you might come across a stash that was built up for a rainy day after he or she had already passed on. Along with capturing an era of time, you’re also reminded of that loved one by this collection.
3. More Silver Per Coin
Some choose to hold 40% silver coins. These coins tend to have a lesser premium and be less rare because they are more recent in strike year. Although they are less rare and easier to find, it takes more than twice as many coins to bare the same amount of silver. Some choose to hold 90% for this reason.
4. Premium Arbitrage
In times of shortages, 90% coins can fetch higher premiums than silver bars. Often investors hedge by buying different types of precious metals. One can take this even further by buying different classes of silver within bullion to profit from the arbitrage, or at the very least keep a balance when price dips come.
5. Perceived Disasters
Historically, spikes in Sell-To-Us premiums for 90% coins have come in months leading up to a perceived crises. When have premiums been up to 50% on 90% silver? The months leading up the year 2000, due to the Y2k bug scare. Premiums were also up in mid-2012 when there was uncertainty about the Mayan calendar “running out.” Some are pointing toward 2020 as being another pivotal year. No one can predict the future, but perceived crises and fear mongering will continue and, as they say, perception is reality.
6. Smaller Divisible Increments
This is the worst-case scenario more on fringe, but in a true crisis situation, survivalists like to keep 90% silver around because of their divisibility, making them easier to use if basic needs like food and supplies have to be traded on the run. The 90% silver coins are great for the sort of dystopic, post-apocalyptic, Marshall Law scenario of Hollywood storylines we seem to have been bombarded with over the last fifteen years.
With 12 different kinds to choose from, which should you go with? Here are three of the most popular 90% silver coins with links to where you can buy them.
Collectors, buyers, and those that don’t consider themselves either love Kennedy Half-Dollars. Similar to the September 11th attacks, which occurred on 09/11/2001, you’ll often hear those of particular generations ask, “Where were you when John F. Kennedy was shot?” Assassinated in Dallas, Texas, on 11/22/1963, the grassy knoll and a museum that tells of his death is the #1 tourist attraction in the city. Morbid as well as fascinating because of the conspiracy and unanswered surrounding the incident, it’s easy to see why 1964 Kennedy Half-Dollars are the most popular 90% silver coins.
Since we still deal in dimes with Franklin Delano Roosevelt, the 32nd President of the United States of America’s face on them, it’s not a far stretch to own older versions that happen to have silver content. The familiarity factor is a draw in their popularity. If you think about it, most that collect or invest have been using dimes to buy gum since they were five or six years old. Plus, dimes make the math easy – 10 make a dollar as far as face value. See the chart above for their silver content.
Quarters are also quite common, thus another popular 90% silver choice. Quarters have bared the same face of George Washington, the 1st President of the United States of America, since 1932. With several generations familiar with the look of the “quarter dollar” as they were once called more often, this coin is the third most popular when it comes to loading up on 90% silver coins.
When buying from a precious metals retailer, most 90% silver coins come in either $10 face value rolls, or $100, $500, or $1,000 face value bags. Rolls are usually in tubes, which make them quite easy to store. Bags, however, need a safe place and plenty of room. A combination safe would be be ideal. From the previous chart you can see that no matter the era, each denomination of the same value has the same weight. For example, 90% Franklin Half-Dollars and Kennedy Half-Dollars have the same weight and amount of silver. To give you an idea, here is a breakdown of number of coins, and approximate weight, for commonly purchased 90% silver bags, so you know what you’re dealing with as far as moving and storing your collection.
$100 Face Value Bag
Dimes, 1,000 coins, 71.5 troy oz of silver, 4.9 pounds of silver, 5.5 pounds overall
Quarters, 400 coins, 71.5 troy oz of silver, 4.9 pounds of silver, 5.5 pounds overall
Half-Dollars, 200 coins, 71.5 troy oz of silver, 4.9 pounds of silver, 5.5 pounds overall
Silver Dollars, 100 coins, 77.34 troy oz of silver, 5.3 pounds of silver, 5.9 pounds overall
$500 Face Value Bag
Dimes, 5,000 coins, 357.5 troy oz of silver, 24.5 pounds of silver, 27.5 pounds overall
Quarters, 2,000 coins, 357.5 troy oz of silver, 24.5 pounds of silver, 27.5 pounds overall
Half-Dollars, 1,000 coins, 357.5 troy oz of silver, 24.5 pounds of silver, 27.5 pounds overall
Silver Dollars, 500 coins, 386.7 troy oz of silver, 26.5 pounds of silver, 29.5 pounds overall
$1,000 Face Value Bag
Dimes, 10,000 coins, 715 troy oz of silver, 49 pounds of silver, 55 pounds overall
Quarters, 4,000 coins, 715 troy oz of silver, 49 pounds of silver, 55 pounds overall
Half-Dollars, 2,000 coins, 715 troy oz of silver, 49 pounds of silver, 55 pounds overall
Silver Dollars, 1,000 coins, 773.4 troy oz of silver, 53 pounds of silver, 59 pounds overall
As you can see from the table above, you’ll need to be physically able to lift at least 50 pounds if you’re considering buying a $1000 face value bag. The weight of other face value bags vary.
Bags are less efficient with space than rolls and they need sufficient space for storage. If you don’t have the space, you can get more silver per square inch with silver bullion bars.
Even if hidden away, a son, daughter, or unaware spouse might spend your 90% silver quarters on a vending or laundry machine for their face value, which is much less than their melt value in silver. It’s like having a loaded gun the house – you need to educate all parties that live with you.
If math is not your strong suit, crunching the numbers will take more time and brain power when you’re dealing with 90% silver, especially if you break up your bags into odd numbers by randomly selling or giving away a few pieces.
This concludes JM Bullion’s Ultimate Guide to 90% Silver by Neil Lemons.