Clinic: Collectors fingered but were not guilty

By: Richard Giedroyc

Coin collectors were blamed for the circulating coin shortage of the 1960s. What was the real cause?

The price of silver can take most of the blame. It was government controlled at the time of the Coinage Act of 1965 passage, but it looked like the spot price of silver would soon rise to a point at which it was profitable to melt the coins. The general public started hoarding. Later in the decade prices did rise and the public scrapped virtually all dimes, quarters and half dollars. Congress was slow to react and ready to blame anyone convenient politically. Coin collectors don’t represent a block of voters, making them a good target. The Vietnam War was also blamed for all the wrong reasons. Mintmarks were removed in 1965 in an effort to discourage collectors. Once the copper-nickel clad coinage was introduced the problem persisted with the half dollar since the silver content of that denomination was reduced, but not eliminated.

The 1965 to 1967 Special Mint Sets were produced during the coin shortage of that period. Why did the Mint decide to offer these when they were supposed to be addressing the coin shortage of the time?

Despite all the complaining by the U.S. Treasury and Congress each still kept its eye on profits. Special Mint Sets were considered to be a stopgap measure to satisfy collectors in the years in which proof sets were not issued. The coins were produced at the San Francisco Assay Office from overpolished dies that result in a prooflike coin. The coins, however, received no special handling and for that reason often display contact marks.

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Even if the government really believed coin collectors were behind the coinage shortage of the 1960s, is there truly anything they could have done about it?

There were some congressional discussions about outlawing coin collecting. The only thing this would have achieved would have been to drive the hobby underground, while encouraging even more coin hoarding since it would have made coin speculating into a black market activity.

Could the United States experience a coin shortage today, or are circumstances too different from what they were during the 1960s?

Our dependency on coins and bank notes has decreased since that time. Today credit and debit cards, electronic transfers, and other more modern systems dominate commercial activity. We no longer have precious metal in our circulating coins, discouraging their being hoarded or scrapped. We in the United States could still have a coin shortage, but it is less likely than when specie was the main source of commercial activity. There are many other places in the world where cash is king and a coin shortage is more likely for that reason.

What were the circumstances that finally ended having silver in the half dollar beginning in 1971?

The Treasury sought permission to eliminate silver in the silver-clad half dollar in May 1969. It was Dec. 31, 1970, when President Richard M. Nixon signed legislation given them this authorization. The Mint announced that no 1970 half dollars would be struck for circulation after the deadline date for ordering mint sets, making the silver-clad 1970-D half dollar the key date in the series.

Gold and silver in circulating coins were taken for granted until the 20th century. Do you see any metals now in use for coins that might someday become obsolete as well due to the intrinsic value of that metal?

Copper and nickel are the most likely metals to increase in value sufficiently to force their elimination from coins.