In the early 1960s, the U.S. faced a dwindling supply of silver that threatened to elevate the demand of coins such as the dime and quarter—coins that at the time contained actual silver—beyond their face value. The Coinage Act of 1965 aimed to address this shortage.
This silver shortage spurred people to hoard significant amounts of dimes and quarters. Some even melted the coins to produce silver bullion.
In response, President Lyndon B. Johnson wrote a special message to Congress proposing changes to the coinage system.
“We must take steps to maintain an adequate supply of coins,” wrote Johnson, “or face chaos in the myriad transactions of our daily life—from using pay telephones to parking in a metered zone to providing our children with money for lunch at school.”
To avoid the sort of chaos Johnson envisioned, government officials decided to replace the coins’ silver with copper and nickel. On July 23, 1965, Johnson signed the Coinage Act of 1965 and their plan became law.
In his remarks at the ceremonial signing of the Act, Johnson explained:
“The new dimes and the new quarters will contain no silver. They will be composites, with faces of the same alloy used in our 5-cent piece that is bonded to a core of pure copper. They will show a copper edge…
Now, all of you know these changes are necessary for a very simple reason—silver is a scarce material. Our uses of silver are growing as our population and our economy grows. The hard fact is that silver consumption is now more than double new silver production each year. So, in the face of this worldwide shortage of silver, and our rapidly growing need for coins, the only really prudent course was to reduce our dependence upon silver for making our coins.”
The passage of the Coinage Act of 1965 resulted in “clad coins,” composed of a copper core surrounded by a copper-nickel alloy.
The move worked, as the Federal Reserve Bank of New York observed at the time, stating that it had “substantially reduced the domestic use of silver for coinage….”
The Act also called for the gradual reduction of silver content in half-dollars, from 40% to the same composition as the dime and quarter.
The JFK Connection
Why a gradual reduction for the half-dollar as opposed to the immediate change that hit other coins? Because the half-dollar’s design had changed not long before to honor President John F. Kennedy, who was assassinated in November of 1963.
Released in March of 1964, the Kennedy silver coins garnered a great deal of attention from an affectionate public still reeling from his untimely death. They were immediately hoarded by silver enthusiasts and people who wanted a memento of Kennedy. The Mint tried to improve circulation by producing more half-dollars, but their efforts failed. Officials reduced the silver content from 90% to 40% in 1965, and completely eliminated the coin’s silver content in 1971. The Kennedy half-dollar was one of the last American coins to be made of 90% silver.
Even though more than 433 million Kennedy half-dollars were produced, the coin rarely appeared in general circulation. Some attribute this to its silver content and members of the general public still eager to collect as much silver as possible.
Many, though, point to the shared trauma of the young president’s demise as the reason for its popularity.
From Scarce to…Yours
Among the statements President Johnson made about the coin dilemma, he included this one:
“Silver is becoming too scarce for continued large-scale use in coins.”
Today, of course, the landscape is a bit different. While silver never returned to dimes and quarters, beautiful and pure silver coins returned to the public in a big way.
The 1 oz. Silver American Eagle Coin is just one example of the brilliant silver coin opportunities for precious metals buyers and history buffs alike.
If you’re ready to shop .999 pure silver coins, call U.S. Money Reserve at 1-844-307-1589 or buy silver coins online. Knowledgeable Account Executives are standing by to answer your questions about silver, American coinage, and the future of precious metals!