Silver and Gold Facts
SILVER
Both silver and gold coins were not minted from 1804 to 1819, since they would not circulate. They were worth more than face value, and all silver dollars, as well as the gold coins, were instead shipped overseas for a profit. The problem abated some by 1805, but the mint did not begin until the 1820’s to mint them again. By 1830, the problem was worse again. In 1834, the gold in gold coins was reduced slightly, and this put them back in circulation again. All gold coins from 1820 to 1833 are therefore very scarce, most having been melted for the bullion content.
The California Gold miners actually preferred silver over gold, and always traded their gold dust for silver coins.
The price of silver had been low enough since the late 1870’s that the silver in a dollar was only worth 91 cents. But by 1935, the silver in the dollar reached a low of 53 cents – so the silver dollar was no longer minted after that year.
Silver was used in the War Nickels of 1942 to 1945 because one of the customary ingredients in the customary alloy – nickel – was a crucial wartime metal. Copper was less crucial, and still available for coin use. Silver was plentiful (at least to the Government), and not needed in the war effort, so it was used in the nickel as 35% of its alloy. Nickel had to be taken out of the coins, so the alloy was 56% copper, 35% silver, and 9% manganese. All of the mints used a very large mintmark above the dome of Monticello on the reverse of the coin (and this was the first time that the Philadelphia mint had a mint mark). This was to distinguish these nickels from the earlier issues in case they needed to be recalled. In 1946, after the war shortage ended, the alloy was restored to the original 75% copper and 25% nickel alloy still in use today. Plans to recall the “war” nickels were considered, but not implemented – but the public heard of these plans, and saved these nickels. However, there was no major hoarding of them. Even at its time of issue, the war nickel contained more than 5 cents worth of silver, but the war nickels were not especially hoarded until the early 1960’s, when all silver coins were pulled from circulation.
Silver values were fairly stable after the war years. It was not until 1964 that silver coins had more silver in them than their face value. The next year, silver boomed, and all silver was taken out of the dime and quarter. The half’s silver was reduced to 40% (from the 90% before), then in 1971, it became all clad like the others. In that year a “silverless dollar” was made – the Eisenhower dollar – but this had a 40% collector version made as well until 1976. Then, the quarter, half and dollar collector coins were made in 40% for the Bicentennial of 1976, with clad circulating versions also made. Since 1992, the Mint has made 90% silver versions of the dime, quarter and half for collectors, with the circulation issues made in the clad alloy.
German silver was first named in 1830, when a German brought this nickel-silver alloy to Sheffield, England. However, it was invented in China much earlier, and was imported to Germany. Then along came World War I, and the intense dislike for anything German. The alloy was useful still, so its name was changed to simply nickel-silver.
GOLD
Gold ingots were rolled to the proper thickness from much thicker strips, before they were sent to the blanking mills (to punch out the planchets for the coins). The ingots made for the $20.00 and $10.00 pieces went through 3 times, while the ones destined to become $2.50 and $5.00 gold pieces went through 4 times.
The great gold melt of 1933 resulted in the melting of over 1/3 of the entire mintages of $20, $10 and $5 gold pieces : 67,856,029 of the $20’s – or 39% of the mintage ; 21,423,342 of the $10’s – or 37% of the mintage ; and 27,539,662 of the $5’s – or 35% of the mintage. However, European banks held most of the others. Estimates have it that 4.9 Million of the $20 pieces, 8 Million of the $10 pieces, 10.8 Million of the $5 pieces and 12.2 Million of the $2.50 pieces were held in bank vaults of other countries as backing of currency for the countries involved. These of course were not recalled in 1933. A small part was hoarded by US citizens – at peril of instant seizure and legal action unless Numismatic Value could be proven – since it became illegal for US citizens to own or hoard gold by 1934. (This was supposedly done by the newly created Federal Reserve to insure stability of the economy in this Depression Era). This ban on gold ownership was not lifted until the Nixon Administration, in 1971, with all restrictions not lifted until the Ford Administration in 1975. Then American gold coins were legal to own again. Around that time, then even more into the early 1980’s, this European gold began to return to the US, accounting for most of the gold coins seen in collections today. A few are from the earlier illegal hoarding (or from having proven Numismatic Value successfully), but most from these come from European banks selling them back to the US for the incredible profit of up to 50 times their face value! (Most sold for closer to 20 times, but that still was a great gain for them.) Gold reached a high of $1000 per ounce in the early ‘80’s, and even a 5.00 gold piece was worth nearly $250.00. Many of the countries simply melted the coins down for the gold directly, as did many American citizens finding that grandma’s old $5.00 gold piece would fetch them a quick $200.00.