When Was Silver Removed From US Coins?

From the earliest days of the United States, silver held a prominent place in the nation’s coinage, serving as a reliable medium of exchange. Its inherent value as a precious metal provided stability to financial transactions. For nearly two centuries, silver coins were a familiar sight in daily commerce.

The Coinage Act of 1965

The Coinage Act of 1965 marked a significant shift in U.S. coinage. Enacted in 1965, this legislation brought about a fundamental change in the composition of most circulating coins. The primary objective of the Act was to address a growing national coin shortage.

The immediate impact of the Coinage Act of 1965 was the complete removal of silver from dimes and quarters. These denominations, previously minted with 90% silver, were replaced with a copper-nickel clad composition. The new coins featured a core of pure copper bonded between outer layers of a copper-nickel alloy, resulting in a distinct copper edge. This change allowed for mass production of coins at a lower cost, which began entering circulation in late 1965.

Evolution of Coin Composition by Denomination

The composition of U.S. coins underwent specific changes across different denominations.

Dimes and Quarters

Dimes and quarters, which had been 90% silver, transitioned entirely to a copper-nickel clad composition. This new metallic makeup ensured these coins could be produced more economically and in greater quantities to meet public demand.

Half-Dollars

The half-dollar experienced a phased reduction in its silver content. Initially, the Coinage Act of 1965 reduced the half-dollar’s silver purity from 90% to 40%. This coin retained a silvery appearance due to its outer layers containing 80% silver and 20% copper, with an inner core of 21% silver and 79% copper. However, the silver content in the half-dollar was entirely eliminated by a subsequent law in 1970, making it copper-nickel clad starting in 1971.

Dollar Coins

While dollar coins had not been issued for circulation for many years, the Eisenhower dollar, minted from 1971 to 1978, was introduced as a new dollar coin. Circulating Eisenhower dollars were composed of a copper-nickel clad material, meaning they contained no silver for general commerce. However, special uncirculated and proof versions of the Eisenhower dollar were struck for collectors, which did contain 40% silver.

Economic Factors Behind the Change

The decision to remove silver from U.S. coinage was driven by economic pressures. In the early 1960s, the market price of silver rose considerably, largely due to increased industrial demand. This surge in silver prices meant that the intrinsic value of the silver in dimes, quarters, and half-dollars often exceeded their face value.

When the melt value of coins surpassed their monetary value, it became profitable for individuals to hoard and melt down silver coins for their bullion content. This widespread hoarding led to severe coin shortages across the nation, disrupting daily transactions and causing significant inconvenience. The government needed to maintain a stable and adequate supply of circulating currency to facilitate commerce. The shift away from silver also marked a broader transition in monetary policy from a system tied to precious metals towards a fiat currency system, where the value of money is not backed by a physical commodity.