Silver mania is rampant! All of a sudden — well, almost — in the
span of a few short years, the price of silver has risen from $5 to $6
per ounce to more than $40. It has become a speculative medium —
perhaps not quite like tulip bulbs, but not unrelated either.
For many years silver was integral to the U.S. coinage system. The
first U.S. pattern coins dated 1783 were mostly of silver. The first
federal coins made for circulation by the government were the 1792
silver half dismes struck in Philadelphia a few months before the Mint
Beginning in 1794, and continuing until 1964, silver was employed
to make multiple denominations.
By 1964, a shortage of silver bullion and rising prices precluded
its further use. Later coins have been commemorative and bullion
coins, not used as money but sold at a premium.
In 1964 there was a fear that the silver price rise would be
short-lived. Quite a bit was written to counter this, including that
the main use of silver was in making photographic prints, and that was
a dynamic business. Then there was jewelry. Further, in India in
particular, silver was held as an investment.
Still, interest in silver endured — for jewelry, for use in
certain electrical products, and, increasingly, for investment. Soon,
the investment tail was wagging the commercial-use dog. Prior to 1964
the price was pegged at $1.27 per ounce — for generations. No one
thought of investing in the metal.
With the price free floating and rising in the mid-1960s,
investing became important. So did the production of silver medals,
such as by the Franklin Mint, various art medals (one from the Bowers
and Merena series by Frank Gasparro is illustrated), and silver “rounds.”
Then in the late 1970s, the Hunt brothers in Dallas attempted to
corner the silver bullion market, the price went up and up, to nearly
$50, and millions of coins, art medals and the like were melted. Then
the price crashed. Now it is up again.
Silver is now a full-fledged gambling/investment game, never mind
its commercial uses.
One negative is that lightly worn 20th century silver coins, once
collectible at low cost, have been melted in quantity, while the
remaining ones are expensive.
Be careful, please!
I do like to watch out for my Coin World readers.
Q. David Bowers is chairman emeritus of Stack’s Bowers Galleries
and numismatic director of Whitman Publishing LLC. He can be reached
at his private email, firstname.lastname@example.org,
or at Q. David Bowers, LLC, Box 1804, Wolfeboro, NH 03894.