Why was silver "really"removed from coins by the U.S. government in 1965?

I am asking because I have heard several conspiracy theories and I just want to find out the real reason. At the time, was it in the best interest of the country as a whole or was it economically viable for corporate America? What are your thoughts? Please no flame wars.

 

Log in or Sign up to hide this ad.

I'll be interested to hear the responses to your question.

My understanding is the value of silver in the coinage was higher than the denomination; therefore, they wanted to avoid hoarding, etc...and gradually switched to full clad.

 

The US Government didn't remove silver from circulation. The US citizens did.

 

I do know that there was a coin shortage due to the rising price of silver and like you said; the government wanted to avoid mass hoarding. I even heard that it was done because the fiat currency we currently have was doomed to collapse.

There simply was not enough gold to back up the paper we kept making to cover the interest of the interest of the interest that the government borrowed. To be honest I really don't know. But thank you for your response.

 

Something that I found interesting was how they minted 90% silver coins with the date 1964 all the way through 1966. They did this along side the copper nickel ones with normal dates.

 

Hmmmmm....interesting.

 

Please, no conspiracy theories...

The price of silver had been rising such that the cost to produce silver coinage was starting to overtake the actual face value of the coins. This would mean that any residual profit that the US government made by producing coins would evaporate and each coin would run the government a deficit. Additionally, many other countries had either completely abandoned producing coinage in silver or had debased their coinage previous to the US change to clad. By 1960, the yearly average price of silver of 91-cents per troy ounce resulted in each quarter having about 16.5 cents of silver in it. This, plus the cost to manufacture each coin, was starting to push the US Mint toward running in the red.

The government did something logical, which might be shocking, and switched to clad coinage instead so as to save money. However, some states with large silver mining interests would have taken a large blow to their economies and, thus, silver coinage was produced with the date of 1964 for some time after the year. Additionally, half dollars were made in 40% silver. Presumably, this helped soften the economic blow to silver mining states. Also, by producing silver coinage in conjunction with clad coinage, the government might have been hoping to make the public believe that silver was not being withdrawn from circulation. I believe that silver was actively withdrawn by the US government, as well as the public, and that by 1970 or so nearly all of it (save for those pesky 40% silver half dollars) was essentially gone.

Gold was not used to back up silver coinage, nor was it used to back up clad coinage or paper currency save for gold certificates.

 

Thus why I asked. Thank you for all your responses. Enjoy what remains of your day.

 

because if the government could get us off the gold standard they could print as much money as they wanted to so that they could have complete control over the economy. In addition the United States was in a position to make all other currencies based upon the foundation of the us dollar so that they could control the economy internationlly as well. The federal reserve is still trying to get it right so we no longer have severe economic recessions. The next test is when the federal reserve starts making moves next year too early or too late we're heading back to a recession and another stock crash. If they time it just right our economy will see recovery much faster and this nightmare will be over around 2018ish. let's hope they get it right.

P.S if you need to borrow money for whatever reason now is the time as interest rates are going to begin increasing.

 

I like your reply but I don't see any mention of the fact that if silver pushed beyond $2.00 and ounce, then each coin the government produced would have more silver in it than its face value.

Not only that, but the manufacturing uses of silver were really pushing its price up. Things such as film, transistor and integrated circuit manufacturing were HUGE consumers of silver!

There really was no alternative except for the US to get in step with the rest of the world which no longer used silver in their coinage.

Look at today. People find a "silver quarter" and they turn around and sell it for melt value and STILL walk away with a profit. Imagine of you could go to the Bank, get a roll of 90% Silver Quarters and for $10 then turn around and sell it on eBay for $100?

THAT is what the Government was faced with and THAT is why a cheaper metal was used for coinage in 1965.

 

Umm, Germany (Fed. Rep.) went from silver to Cu-Ni for the 5 DM circulation coins in 1975. That would be ten years after '65. Those were Ag625 though ...

Christian

 

This is an interesting point. I was not alive at the time. Obviously, the govt did not make people turn silver coins in, but did they collect all silver coins from banks and swap for clad?

 

The value of the silver exceeded the face value of a silver dollar when the price of silver went above $1.30 The metal was worth more than the face value of the 90% silver dimes, quarters, halves when silver reached $1.38

Silver rose above $1.30 on July 8, 1963. By 1964 it was flirting with the $1.38 level (Remember the Coinage Act of 1965 that gave us the clad coiage was not passed until May 1965. So for a ear and a half the metal content equaled or exceeded the face value.) And there had already been a coin shortage going on before the silver prices rose. This just made it worse.

By 1967 silver had reached $1.60 making $1 in silver coins worth close to $1.20 in silver. In 1968 silver reached $2.57 an oz ($1 in silver coins had $1.90 in metal.) Is it any wonder why everyone (and the government) was pulling all the silver coins they came across.

 

I heard it was because Eric Sprott was going to corner the silver market. However, the Trilateralist Commission, in conjunction with Skull and Bones, brought in the World Bankers to shut the scheme down. That was the Genesis of the "Helsinki Incident" of 1968.

 

I heard the dentists were behind it. For years they had been melting silver coinage for the amalgams. They'd melt a quarter, then charge $150 for the filling. Something had to be done. It was the only way to stop them.

 

That sounds weird enough to be true.

 

Converting to clad coinage was a win win for the government. The face value of the new coins exceeded the cost to produce them so the Treasury 'booked' the profit. Why did they mint huge numbers of SBA dollars when they knew circulation had zero probability? Same answer as above.

 

To what...something above zero ??