By Richard Giedroyc
It was a half century ago, in 1964, that the United States officially ended minting circulating silver coins. Granted, due to a compromise between President Lyndon B. Johnson and U.S. Congress some silver would be retained in the half dollar for a few more years, but the death of specie and birth of fiat currency coins was at hand beginning in 1965.
This may have been the climax, but the United States is only one of the many countries whose coinage had been composed of silver that were at the time converting from silver to base metal coins. U.S. bank notes would continue to be redeemable in silver, but this too was halted in 1968. Despite the outward appearance of these events the worldwide demise of specie in favor of fiat coinage actually began years earlier.
Although the fiscal activities of the United States are usually used as the example, in fact the date in which each country switched from silver to base metal circulation coinage varies from place to place. As the spot price of silver increased countries worldwide increasingly sought to decrease or cease the use of silver in coinage.
Mexico is a good example through which the slow demise of silver coinage can be followed. A 1905 monetary reform reduced the silver content of most coins (The 1 peso was the exception until 1918 when its silver content was lowered to .800 purity.). Only two years later silver was reduced to 0.720 fine content, then in 1947 reduced once more, this time to 0.500 purity. In 1950 0.300 fine silver 25- and 50-centavos as well as 1-peso coins were introduced. Ironically a 0.720 fine 5-peso coin was introduced at the same time. In 1957 the 1-peso coin silver content was reduced once again, this time to 0.100 fineness. There was no change in the 5-peso coin purity, while a 0.900 fine 10-peso coin was introduced.
At the time of the introduction of the nuevos peso in 1993 ringed bimetal coins with a 0.925 fine silver central plug were issued, but this experiment, at that time the only circulating silver coins anywhere, soon failed.
The Soviet Union withdrew all circulating silver coins during the early 20th century, long before most other countries. In 1931 all silver 10-, 15-, 20-, and 50-kopek as well as the 1-ruble coins were ordered withdrawn. Soviet Premier Josef Stalin was not pleased with the pace of the recall of these coins. He allegedly had several high ranking bankers shot, which encouraged the public to turn in all silver coins much more expeditiously.
Canada felt the pressure of the rising cost of silver during the early 20th century, decreasing its silver content coins from 0.925 fine to 0.800 fine in 1920, then reducing the metal purity once more in 1967 to 0.500 fine, then ending all silver circulating coins one year later.
France withdrew its silver content coins early in the century, ending all its 0.835 fine coin production in 1920. It resumed some circulating silver coinage in 1960, but by the early 1980s once again all its coinage was being struck in base metals due to the rising price of silver.
A significant number of countries ceased striking circulating silver coins during World War II. Notable among these, Ireland had been striking 0.750 fine silver coins since 1928, but discontinued them after 1943. Great Britain ceased its 0.925 fine or sterling silver circulation coinage after 1946, a year after the end of the war.
Australia and New Zealand continued the practice longer. Although Australia lowered its silver coin purity from 0.925 fine to 0.500 fine in 1946, it did not cease silver coinage production until 1964. It then issued a lone 0.800 fine 50-cent coin in 1966. New Zealand coinage continued its 0.500 fine content continuously through 1956, then changed to base metal coins.
Switzerland’s currency has always been associated with stability. Its banks are a magnet for depositors across the globe. Swiss silver coins of 0.835 fineness were issued continuously between 1875 and 1967, with the 5-franc coin struck once again in silver during 1969. No silver coins have been struck for circulation since that time.
There are many other examples that could have been illustrated here, but readers are likely more familiar with these. The price of silver coupled with politics caused the demise of silver coinage. Will fiat coinage continue, or at some future date will governments be forced to begin issuing specie coins again, even if in significantly higher face value denominations? This is the 50th anniversary of our fiat coinage. Who knows what may be next.