Why are circulated US Silver War Nickels (1942-1945 P,D,S) so cheap?

Anyone ever notice that you can pick up rolls of Silver War Nickels for as low as a penny apiece each over spot? At 35% Silver content, the current melt value of a War Nickel is $0.96. Even on eBay you can find rolls for 41 or 42 bucks with free shipping, and APMEX sells half rolls at less than 20 bucks if you pay by check. Why so low? Do they not sell well to junk silver dealers? It doesn't seem to make sense. That's the only thing I can think of, perhaps it's more costly to refine the lower % of the precious metal as opposed to 90% pre-1964 US silver coins. Any other ideas?

 

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This is pretty much the reason why they often trade not just close to spot but under it.

 

You guessed it, it costs more to refine lower percentage precious metals.

 

I believe that it is still illegal to melt US coins for the metal. Until the nickel goes completely out of circulation all you can do is hold them.

 

Oddly, few get really melted I'd think. We tend to pass them around in rolls and bags and album holes. Sometimes I wonder if some higher grades are not traded more by collectors' hands than their original purpose as coins, especially since the days of a good nickel cigar gone so long now...

PER GROUCHO MARX:
The nickel today is not what it was fifteen years ago. Do you know what this country needs today?...A seven-cent nickel. Yessiree, we've been using the five-cent nickel in this country since 1492. Now that's pretty near a hundred years' daylight saving. Now, why not give the seven-cent nickel a chance? If that works out, next year we could have an eight-cent nickel. Think what that would mean. You could go to a newsstand, buy a three-cent newspaper and get the same nickel back again. One nickel carefully used would last a family a lifetime!

 

In December 2006, the U.S. Mint announced its new rules on pennies and nickels. It warned that melting coins or exporting them in large quantities is forbidden. If you bring cash to another country, a $5 limit applies to these coins. You can mail up to 10,000 pennies overseas, but a legitimate collector must purchase them.

 

Every detailed discussion of this rule that I've seen says that it specifically exempts war nickels. I can't find the law right this minute, though, just a bunch of dead links.

War nickels sell at or below melt because nobody wants to pay full melt value for them, because they're harder to refine and bulkier to hold. In other words, buying bulk war nickels at melt is no bargain, because you'll still get less when you sell them.

 

I like to search them for varieties and errors. They're a lot of fun. I'm not sure what I'll end up doing with them, probably pass them along when I go. Here's my favorite find from a purchase of war nickels:

 

True, yet their numistmatic value for the lowest circulated grades hovers just a few cents above that. Even on eBay the going price with shipping is about a buck eighty if you look at individual coin sales history. It remains an odd duck in American coin history, and actually has the ironic distinction of having the highest silver content per $1 of face value of any other coin, even American Silver Eagle .999 fine Bullion Dollars.

At today's silver spot price of $17.04 a troy ounce, $1 face value of War Nickels has silver content of $19.17, yet they remain on the sidelines in desirability. Weigh that against a Morgan or Peace Dollar at a lowly $13.17.

 

Heh, yep. They're weird and fun. I keep hoping to find a Henning counterfeit nickel in change someday. I love that story, a guy who counterfeited they say nearly 500,000 nickels in 1944 and forgot the "P" mint mark. They go for 50 bucks or so as collectors items. Leroy Henning. He had previousy been arrested and also served time for counterfeiting $5 bills.

 

I'd love to find one as well

 

I bid on one on eBay the other day, it went for 25 bucks or so, dang.

 

I had a couple of Racketeer Nickels 1883, gold plate, no CENTS on reverse, sold one, guy said it was a counterfeit counterfeit, in other words not an ORIGINAL 19th century plating, but a recent one. I never knew there was a distinction. I had bought a fake fake. I refunded him and told him to keep it. Is there NO integrity left in this world?

 

I don't recall them, particularly those heavily circulated, ever having a real-world collectible premium.

And he was almost certainly right; live and learn....

 

That makes more sense...

And in this respect, you very well may be right. I don't recall ever seeming anyone worthwhile offering such coins, other than in a generic bowl type thing, and even then it's usually more of a novelty premium.

 

And how was he able to tell the difference between the contemporary gold plate and the modern gold plate fakes? What are the markers between the 2 coins?

 

They do harbor a certain charm for many collectors, though, especially as a standalone small set. The historic significance of the reason for the silver content though is fascinating. At that time during the war silver was less valuable than nickel because Nickel was so important to creating weaponry.

 

I believe the Originals that were counterfeited by gold plating in the 18 hundreds were rim edged, a fairly laborious effort. At the time though $5 was a lot of money, and worth the extra work to pass off the fake. Oddly, as The Story Goes, the perpetrator was never convicted at trial as he was a deaf mute and his lawyer argued that he never specifically said they were real gold coins. and I cannot remember the guys name. Sorry.

 

Well, the original nickel was 3 cents. So perhaps there is something to this idea.