Remember when the first clad quarter came into your hand? I do.
It was in the autumn of 1965. My father mentioned at suppertime that he had gotten one of the new quarters that day.
I stopped eating and ran up the stairs to my parent’s bedroom and went right to the bureau where they put their change.
Sure enough, there was the brand new clad quarter.
It was exciting. It was history in the making. In the next three years, clad coins displaced the silver dimes and quarters in circulation.
There was much talk in collector circles that taking silver out of the coins was symptomatic of an inflationary spiral that would devalue the U.S. dollar severely over time.
If you had been around at the beginning of it all in 1965 and someone had made you the following proposition, what would you have done?
You could put aside $1 in good old silver quarters to preserve your purchasing power for the next 51 years. Or, you could invest that $1 in a bond paying 4.95 percent compound interest, not to be touched for the same 51 years.
Which option would you have chosen?
I expect most if not all coin collectors would have opted to put aside the silver quarters. I know I would have. In fact, I still have a few such coins that I set aside those many years ago.
Clad coins were called trash by many back in the day. Many collectors left the hobby because of them.
Putting aside the fact that bonds did not come in such a low denomination and ignoring the issue of potential taxes on bond interest, how would your bond paying 4.95 percent interest turned out in good old 2016?
Interestingly, as silver was trading at $16.43 ounce, the race between the silver quarter and the bond was absolutely tied.
The $1 in silver quarters was worth 11.75 times face value, or $11.75. The same four silver quarters with $1 face value in 1965 put into paper have also reached a value of $11.75 today.
Amazing, isn’t it?
Buzz blogger Dave Harper has twice won the Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper "Numismatic News."
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