What Is Constitutional Silver and Why Is It Valuable?
Discover what constitutional silver is, why these specific US coins are unique, and how their intrinsic value is determined.
Constitutional silver refers to a specific category of United States coinage with historical significance due to its silver content. These coins were once part of everyday transactions, serving as a tangible form of wealth. It represents an accessible entry point into precious metals, offering a connection to American monetary history.
Defining Constitutional Silver
Constitutional silver refers to U.S. coins minted for circulation before 1965. They are composed of 90% silver and 10% copper. This blend provided durability for daily use while retaining significant intrinsic value.
A major shift occurred with the Coinage Act of 1965, which largely removed silver from circulating coinage. This legislative action was a response to rising silver prices that made the metal content of coins worth more than their face value. Most other circulating denominations transitioned to a copper-nickel clad composition.
Identifying Constitutional Silver Coins
Recognizing constitutional silver involves checking the mint date on specific U.S. coin denominations. Dimes, quarters, and half dollars dated 1964 or earlier contain 90% silver. This also includes silver dollar coins like the Morgan and Peace dollars, though their minting ceased before 1965.
A quick visual check of the coin’s edge can reveal its silver content; a solid silver-colored edge usually indicates a 90% silver coin, unlike the copper stripe visible on clad coinage. “War Nickels” minted from 1942 to 1945 are an exception, containing 35% silver. Kennedy half-dollars from 1965 to 1970 contain 40% silver.
Understanding Its Value
The value of constitutional silver is determined by its “melt value,” which directly correlates with the current spot price of silver. The metal content within these coins is worth more than their original face value. For example, a pre-1965 dime, quarter, or half-dollar contains a specific amount of silver that can be calculated by multiplying its silver weight (in troy ounces) by the prevailing silver spot price. While investment-grade bullion features a higher purity of .999 fine silver, constitutional silver’s 90% purity still makes it a tangible asset. Constitutional silver coins trade with lower premiums above the spot price compared to modern .999 fine silver bullion products.
Acquiring and Selling Constitutional Silver
Individuals acquire constitutional silver through various channels, including local coin dealers, precious metal dealers, and online marketplaces. These coins can also be found through estate sales or by searching through circulated coinage from banks. Reputable dealers and online platforms provide avenues for both buying and selling, offering convenience and a broad selection.
When selling, the profit derived from constitutional silver is subject to capital gains tax, as the Internal Revenue Service (IRS) classifies physical precious metals as collectibles. Long-term gains are taxed at a maximum rate, while short-term gains are taxed at ordinary income rates. The taxable gain is calculated as the sale price minus the original purchase price and any associated costs. Sales tax applicability on purchases can vary by state, with some states offering exemptions for precious metals.