Interest in silver seems to be picking up again,
How do I know?
It isn’t just the $30.90 an ounce price that I see on the Kitco website this morning. It is also indicated by the nature of inquiries coming my way.
I had a question about my Thursday blog where I had provided the then current value of $1 face value of pre-1965 dimes, quarters and half dollars expressed as a multiple of face value.
The writer wonders how I arrived at the figure I did.
It is a matter of taking the weight of $1 in silver coins and multiplying it by the silver ounce price.
But what weight figure to use?
Unworn U.S. silver coins weigh in at 0.72338 ounce per $1 face value. This works out to 723.38 ounces per $1,000 face value bag, which was the standard face value quantity back in the days when these coins were supplied to the banking system.
When silver coins began to trade for more than face value, the bag quantity of coins used by the banking system was simply adopted as a convenient quantity for trading in the coin business.
However, not all coins are unworn. In fact some coins are worn slick. How can you be in the business of buying and selling in quantity each and every day and not be required to weigh each and every coin, or each and every bag?
The answer worked out by the dealer community was to factor in the wear.
On average, the weight was 0.715 for each $1 in silver coins. That means the $1,000 bag on average contained 715 ounces of silver, or 8.38 ounces less than if it were all unworn coins.
This has been a hobby shorthand ever since.
Is it still accurate?
If you are buying uncirculated bags it most certainly isn’t.
If you are buying bags of circulated Barber quarters or Standing Liberty quarters, this average weight calculation would likely be higher than the actual silver weight because many of the surviving coins are so heavily worn.
What should the average buyer do?
An average is only good so long as it is an average mixture.
If you have reason to believe the quality of the coins is closer to being unworn, you can pay a little more.
If you believe the quality to be less, you can pay less.
But all of this should be part of a discussion with the seller.
In the meantime, nobody has come up with a commonly used alternative to the average of 0.715.
Oh, and at that average, $1 in face value would be worth 22 times face value, or 22.0935 times face value if you want to run it out to the final decimal place, at $30.90 an ounce.
Buzz blogger Dave Harper is editor of the weekly newspaper “Numismatic News.”