Last Time Face Value Exceeded Melt Value On World Silver...?

@X2an -

Thanks for the input - I have a few of the 5 franc coins as well - but they're in a different folder so I didn't think to check their melt value recently.

I hope other readers have more input for other currencies!

jeffbuckles You raise one of my favorite topics when you say:



Most collectors seem to believe that before 1965 that the US produced coinage that was based on "intrinsic" value and that the US was on a "silver standard". Both of these beliefs are actually incorrect. Virtually the entire world used a gold standard by the first half of the twentieth century. Silver coins were "tokens" with a value set by law (fiat value) higher than the intrinsic worth.

The US has been operating on a Gold standard since 1873. That was when a new monetary policy was passed into law. Silver interests referred to the Act as the Crime of 1873. At that point in time silver was abandoned for use in intrinsic coinage and all silver coins including the silver Dollar became "tokens". Only gold coins were treated as having a full intrinsic value. Everything else had fiat value.

The driver for this change was manifold. A driving factor for the US was the discovery of the Comstock lode of silver in Nevada. This discovery made the US the largest producer of silver in the world. It created a silver glut. Supply exceeded demand. As world economic pressure moved to adopt the gold standard, the US found itself fighting the tide. If silver was coined at a 16 to 1 ratio - gold would flow to Europe to prop up silver values and we did not have adequate reserves. Germany adopted the gold standard and dumped millions of ounces of silver on the world silver markets causing an immediate devaluation of silver. So on world markets a silver dollar was worth less than a gold dollar and creditors overseas demanded payment in gold not silver.

So in 1873 we chose gold as the standard monetary metal.

That meant that silver itself became only a commodity. The price was based on supply and demand for the metal. There were only a few exceptions to this. Some like China were important but that is another story I have told many times.

By 1893 the intrinsic worth of a US silver dollar hovered in the 30-40 cent range. In the 1930's the value of a dollar fell to it's lowest point ever at just under 30 cents.

Government mints now operate as profitable businesses. That fact is often lost in the process of many historical discussions. At one time, it was not so. Coins contained intrinsic value based on metal content. When the coins were worn down to 95% of full weight they were melted and re-coined. Allowing worn coins to circulate meant that newly made coins would be hoarded and never circulated. (This happened in England). In those days the government absorbed the loss to maintain a respected currency.

Coins that circulated and were worn past the 95% mark often were discounted by businesses. They used to weigh silver coins to determine actual value.

This discussion may seem to be simply academic detail, but when history is not understood correctly (at least on this macro-level) incorrect ideas can cause us to make errors particularly in my field of authentication. To distinguish a Contemporary Circulating Counterfeit from a Numismatic Forgery these historic concepts often form the basis on which a decision rests. The availability of a profit for the manufacture of any coin by a counterfeiter or forger must first exist.

It is a truly rare counterfeiter that makes his wares for his own amusement.

Sorry to digress, but all coin collectors should understand the main forces behind the manufacture of coinage.

@swamperbob @Sap

Thanks for the extensive and detailed input.

I think the Swiss coinage is most interesting because their coinage has changed so little in the last 150 years or so. It would be fairly simple for some silver coinage to find its way into circulation, much like we sometimes find a silver dime or quarter here in the US. But not so in the UK, Mexico, or Germany, etc. where the coinage has been replaced or completely redesigned in recent years. Makes me wonder if we have any coin roll hunters from Switzerland here who can share their experiences?

On a related note, in my collection I have a silver (0.925) commemorative 5 euro coin (Barcelona) from 2010. Its face value is about US$5.69 but it's bullion value is about US$5.89:

https://en.numista.com/catalogue/pieces45422.html

Of course, I paid about US$30 for it at a shop in Spain, so I wouldn't ever spend it, but I'm sure that more than a few kids cracked open their coin sets and spent those silver coins on candy etc. Kudos to the lucky cashier who pulled those out of the drawer.

(edited for spelling)

It could be argued since 1853. Until then anyone could bring silver to the mint and it was made into coins of nearly full intrinsic value with unlimited legal tender status. In 1853 the government cut that off and from that time forward silver was purchased but coins were only made for the government account, The silver content was reduced and the legal tender status was restricted to no more than $5. The silver coinage became to some extent a subsidiary coinage.