Precious Metals

Before bullion, modern mint issues filled gap

Editor's note: this is the second part of a feature about the rise of silver bullion coins. The story originally appears in the July issue of Coin World Monthly:

Silver began disappearing at an accelerated rate during the 1960s, but commemorative coins helped fill the gap nicely before there was bullion.

Circulating silver coins were widely used until World War II or shortly after, depending on the nation.

Gradual elimination of precious metal from circulating coinage was accomplished over decades in Great Britain, as the fineness of silver halfcrowns, shillings, sixpences and threepences and the like was subtly changed, culminating in complete elimination of the metal after 1946. 

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Mexico’s use of silver dwindled so low that, among nations whose circulating coins contained silver, Mexican coins famously feature the lowest fineness, .100 fine silver, which was employed for the 1-peso coins from 1957 to 1967.

European countries like Austria, West Germany and Switzerland began abandoning silver for circulation coins about the same time as Mexico. 

Silver stayed in circulating coins longest in German-speaking or predominantly German-speaking areas.

Switzerland’s reputation for stability remained true for its half- and 1-franc coins, which were issued in the same designs from 1875 to 1967 and in the same fineness (.835) of silver, before the Swiss abruptly said “so long” to the shiny metal. 

The final year for Austria’s .640 fine silver 5-schilling coin was 1968, but the 10-schilling (struck in the same .640 fineness) lasted until 1973. 

West Germany outlasted them both, though, issuing a silver 5-mark coin for circulation through 1974. 

Austrian, German commems

With silver gone from circulating coins, what were collectors to do to get an investment fix? 

Older historic issues were popular and in many countries the only option, but some mints kept cranking out the silver, in the form of commemorative coins.

The largest outpouring of silver coins at affordable prices came from two of those German-speaking lands, Austria and West Germany (East Germany also issued silver coins, but those did not penetrate the market in the West because of political considerations). 

Even after dropping silver from circulating coinage, Austria’s and Germany’s commemorative programs in the 1970s and 1980s were at the vanguard of an worldwide commemorative coin explosion, though that long-ago market pales in comparison to today’s issues.

In a sense, these 50-schilling and 5-mark coins were issued for circulation, as, like their euro counterparts today, they were issued at face value in post offices. They were, however, totally directed toward a collecting market, which might be the largest per capita anywhere.

After a few years the 50-schilling coin was mostly abandoned in favor of a heavier, larger 100-schilling coin, which remained in use for commemorative themes through 1979 before a 12-year hiatus. 

The 1970s editions of the .900 fine silver 100-schilling coin celebrated a range of topics in generally enormous mintages, ranging from 1.5 million to 2 million pieces per design, indicating their target market was interested more in silver than in rarity. Targeting changed when the denomination was revived in 1991, minted in a Proof finish only, in mintages limited to no more than 100,000 coins per design. 

Germany also ended its commemorative silver 5-mark coins in 1979 but brought back a silver 5-mark commem eight years later, in 1987.

There were a few other way stations on the road to world silver bullion, however. 

Canada’s Olympian collection

Voluminously produced during the gulf of time preceding the rise of silver bullion coins were the 28 silver coins from Canada honoring the 1976 Olympic Games in Montreal.

The coins — 14 silver $5 coins and 14 silver $10 pieces — were part of a 30-coin program (the other two, in gold, were then illegal for Americans to own) raising money for the event.

The coins, issued during a four-year period, represent different aspects of the games, including various sports and the host nation itself. 

Proof and Brilliant Uncirculated examples were issued, generally several million per design, and the program is by far one of the best known Royal Canadian Mint issues. 

It was extensively promoted both in Canada and abroad, and these pieces have traded mostly as bullion and at bullion-related prices for many years. 

Presidential, bicentennial silver

Americans looking for silver in the nation’s coins didn’t have to wait long after its removal from general circulation.

Of course, the 1965 to 1969 Kennedy half dollars contained 40 percent of silver, but the slain president’s popularity meant many of these coins were saved out as mementos.

The death of a different American president, Eisenhower, prompted another new coin, and the “Ike” dollar was born in 1971. Its mintages include a 40 percent silver version (like the 1965 to 1970 half dollars, made of a silver-copper clad composition) for collectors, issued every year from 1971 to 1976.

The 1976 Eisenhower dollar marked a departure of sorts, as the design was modified in a broader coin program marking the American Bicentennial.

Besides the dollar, designs for the 25- and 50-cent coins were modified for the national party, and silver-copper clad versions of these were issued, though again for collectors only. The event marked the closest Americans would get for a while longer to holding silver coins with circulating designs. 

None of the aforementioned silver coins, in their varying finenesses and weights, provided any simple, easy way to buy world silver coins an ounce at a time. 

Bars and rounds from private producers were suitable for some, but lacked the cachet of an official government imprimatur and denomination. 

A few more years would pass before the veritable silver smorgasbord would be arrayed for today’s collectors to choose from. 

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