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When numismatics and bullion merged

When I turned the page on my calendar, I realized that we were coming up on the 50th anniversary of the end of U.S. Silver Certificate redemption in bullion.

As of June 24, 1968, the $1, $5 and $10 Silver Certificates that could be found in circulation could no longer be redeemed in silver bullion from the U.S. Treasury.

This was a big deal at the time.

These were the last issues of U.S. paper money that were actually redeemable in something other than another piece of paper.

Hard money writers often cover the gold recall of 1933. Less often do they mention the abandonment of silver-backed paper money.

This came later, fortunately for me.

I remember it well. I had a paper route. Fellow carriers were looking for Silver Certificates in the money paid them for subscriptions.

I was busy looking for silver coins. I had many more of these to go through than pieces of folding money.

These were the days when a week’s subscription was 35 cents.

However, it was hard to miss the mad scramble by coin dealers to buy up Silver Certificates for percentages over face value.

Up, up, up their prices went. The ads in numismatic periodicals got bigger and more numerous.

They were hard to miss.

The premium paid for each Silver Certificate was determined by the rising price of silver bullion.

This was a relationship that became visible when the Treasury stopped mandating the price of the precious metal.

Up until 1967, the Treasury set the price of silver. The market did not.

The final official price of $1.2929 an ounce was the value at which the silver bullion in a silver dollar equaled face value.

Or, put another way, the silver bullion one could acquire by redeeming a Silver Certificate was worth exactly the face value of the note.

There was no profit to be had. There was no numismatic interest.

However, that changed. The floodgates of interest opened when the price of silver was freed.

The top price in 1967 was $2.17 an ounce.

That meant a $1 Silver Certificate could be redeemed for almost $1.68.

The high point for silver in 1968 was $2.56 an ounce.

I don’t remember if that was before or after the end of redemption, but if it was before, a $1 Silver Certificate could be redeemed for almost $1.98 in bullion.

Here was an example of a form of paper money that actually gained value while it was in your pocket.

It didn’t last long.

The closing date of June 24, 1968, brought to an end a 12-month period where bullion could be obtained instead of silver dollars.

On June 25, a $1 Silver Certificate became worth $1 again.

However, the public did not know why the notes were being sought ought. They kept any Silver Certificate they found long after this form of paper money had lost its backing.

For me and other coin collectors active a half century ago, bullion and numismatics merged.

The relationship has endured ever since.

Buzz blogger Dave Harper won the Numismatic Literary Guild Award for Best Blog for the third time in 2017 . He is editor of the weekly newspaper "Numismatic News."

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