By Ron Drzewucki – www.moderncoinwholesale.com …..
Collecting Strategies on building a 40% silver Short Set
1965 was a momentous year for U.S. coinage. It was the year we made the switch from silver alloy to clad, and for many it marks the boundary between “real” money and whatever you’d want to call our coinage since then. To some collectors, the word “modern” is synonymous with the “debased” coinage of the current era.
It’s an understandable argument.
But not all coins from the “modern” era are made of clad. The production of precious metal coins and bullion products has only improved since then, with technological and engineering developments allowing for purity of up to five decimal places in commercially marketable products. Much respect to the Royal Canadian Mint, especially.
And in 1965, not all circulating coins were clad, either. The Kennedy half dollar, the largest denomination coin in circulation, still retained some silver and did so through 1970. In 1971, as a result of the same law that removed silver from the half dollar, a collector’s issue Eisenhower dollar would use the same alloy–a 40% silver mixture.
Since then, there have been special silver releases for both coins (notably the bicentennial), but no regular, business-strike silver coinage. The years between 1965 and 1971 may have been less historic than we think (much of the rest of the world had already adopted clad coinage), but for the most powerful economy in the world they were a period of transition between two great eras.
The two-member “40 Percent Club” is the kind of representative short set that we may never see the likes of again.
Silver Clad Kennedy Half Dollar: 1965-1970
The half dollar saw a design change in 1964, only 16 years after Ben Franklin had replaced Adolph Weinman’s Walking Liberty design.
On the face of it, this seems like it flouts the Coinage Act of 1890’s provision that coin designs can only be changed after 25 years. What the law actually means, however, is that the Mint can’t make design changes to the nation’s coins independently of Congress until said design has been around for a quarter century (after that it’s every man for himself I suppose; it hasn’t really happened that way).
After the assassination of President John F. Kennedy on November 22, 1963, Congress acted quickly and a bill was passed in late December that placed a revised version of the effigy from Gilroy Roberts’ Kennedy inaugural medal on the obverse of the silver half dollar. Congress’ quick action and the use of pre-existing assets enabled the Mint to produce the first Kennedy half dollars in January 1964.
Since 1964 was the final year before the clad transition, Kennedy halves from this year consist of 90% silver. As a matter of fact, that was kind of the point of honoring Kennedy on the half dollar – Congress wanted him on our silver coinage, and first lady Jackie Kennedy didn’t want to displace George Washington from the quarter. Keep these facts in mind when I talk about the Ike dollar.
The Coinage Act of 1965 was the legislative tool Congress used to remove silver from the majority of the country’s circulating coinage. It was done in response to the rising price of silver on the free market and the resulting coin shortages (not to mention the fear thereof). The act also maintained silver in the production of the half dollar, albeit at the reduced 40% level.
Technically, though, the law authorized the Secretary of the Treasury to mint 90% silver dimes, quarters and half dollars for a period of five years maximum if there wasn’t enough clad coinage in circulation to meet commercial needs. Enough was made, however, and the public seemed to accept it so this never happened.
The 1965 Coinage Act also ended production of a silver dollar coin over that same five-year period. This was in reaction to the 1964 Peace dollar debacle and was seen as one way to fight those in Congress who, for a hundred years or more, had helped line the pocketbooks of western mining interests at the expense of the rest of the nation. Practically though, it meant that the U.S. Mint could avail itself of the necessary supplies of silver to issue the other denominations whether the Treasury Secretary chose to continue 90% silver production or went with just the 40% Kennedy half dollar.
According to the Red Book, the first year saw a mintage of nearly 66 million pieces. This almost doubled in 1966, and by its peak in 1967, over 476 million 40% Kennedy halves had been produced over the first three years.
1968 saw the production of business-strike Kennedys moved from Philadelphia to Denver, and San Francisco minted the first Proofs of the series. Mintages were still fairly high, with about 250 million business strikes made and a little over 3 million Proofs issued.
The numbers were definitely on the downward track by 1969, and in 1970 only 2,150,000 business strike Kennedy half dollars were manufactured, exclusively for that year’s Mint sets. Proof mintages reminded fairly constant until the end, at about three million a year.
Unfortunately, the 40% Kennedy halves failed to circulate effectively (as did the 90% silver 1964 issue). Simply put, the public knew our coins were being changed to a clad composition and people hoarded the silver. Gresham’s Law strikes again.
Some numismatists suggest this abrupt disappearance from circulation made the coin unfamiliar to the general public and too exotic to be taken seriously as useful in day-to-day business. That in turn established a habit of disuse of our nation’s largest coin denomination that continues to this day–and probably contributes to the psychological inertia blocking acceptance of even larger denominations, like the dollar coin.
Silver Clad Collectors’ Coin Eisenhower Dollar: 1971-1974
The story of the Eisenhower silver dollar begins in 1969 with Mint Director Mary Brooks, who wanted to make sure at least one of America’s coins had silver in it when the Kennedy half went all-clad in a couple years. Congress knew of the proposal, so when five-star general, Supreme Commander of the Allied Forces in Europe and former President Dwight. D. Eisenhower died in March of that year at the age of 78, a bipartisan legislative process created the bill that authorized the first circulating dollar coin in the United States since 1935.
Interestingly, since we’re talking about honoring a beloved late former president, the bill called for the Eisenhower dollar to be made of a clad composition instead of silver. But, all in all, it was a common-sense bill aware of the limited use Americans had for a silver dollar at the time; it also removed silver from the composition of the Kennedy half dollar.
Nevertheless. How strange that just five years earlier Congress had demanded that Kennedy be honored on a silver coin but now it passes a law insisting that the Eisenhower dollar be a clad-only issue. Some in Congress protested, but it was the Senate that came to Ike’s rescue, and in March of 1970 the two houses compromised and agreed to the production of a 40% silver collectors’ coin version to be made alongside a clad business strike.
But before that happened, World history was made when on July 20, 1969, mankind first set foot on the surface of the Moon. A proposal to honor the Apollo 11 Moon landing was forthcoming later in the year. It was eventually folded into the Ike dollar bill, and the result was the familiar Eisenhower dollar coin.
The first Ikes rolled off the presses in 1971. Now, compared to the 40% silver Kennedy half of 1965-70, clad Ikes had much smaller mintages – 25% to 50% smaller if you go by year of issue. And the 40% silver collectors’ coin of 1971-74 had mintages exponentially smaller than the clad Eisenhower dollars. Again, according to the Red Book, the 1971-S silver clad Eisenhower had a total mintage of almost seven million. 1972-S had a mintage of over two million. 1973-S and 1974-S saw 1.8 and 1.9 million produced, respectively.
A stark difference when contrasted against the Kennedy half. Why was this, exactly? Was silver really too pricey? Did Congress finally see through the silver dollar con job of the previous century? Was the high mintage of Kennedy halves the result of the trauma of his assassination? Had the times really changed, as Bob Dylan claimed, and a Republican president and five-star general just wasn’t “fashionable” anymore? To greater and lesser extents I’m sure it’s all true.
Conclusion
Like I said before, silver did return to both the Kennedy half dollar and the Eisenhower dollar coin. First came the Bicentennial program overseen by Mint Director Brooks. In later decades, special 90% silver issues were added to the Kennedy series in 1992, which as a whole went officially collectors-only in 2002.
I wish I could talk about 1992 and 2002 Ike dollars, but alas, the series ended in 1978 after it, too, failed to circulate effectively and polling suggested that a smaller, lighter dollar coin would gain wider acceptance. Starting with the Susan B. Anthony and continuing on through the Sacagawea, Native American and Presidential $1 coins, the United States has never returned to a crown- or cartwheel-sized dollar coin.
Which makes sense rationally if not emotionally. Why change the size of a coin if what it’s made of doesn’t determine its value?
I guess that’s another reason the “40 Percent Club” short set is so unique.
-Ron
Don’t forget the 1976 40% silver set, which adds the only 40% silver quarter to the mix.
Hindsight’s always 20/20, but in retrospect the decision to continue minting halves from silver, even though debased, was the final nail in the denomination’s coffin. When silver (artificially) hit $50 per oz, nearly every Kennedy half that was still in circulation vanished into the melting pots. Australia faced a similar problem with its early 80%-silver fifty cent pieces, but moved more quickly than the US Mint to change not just the coin’s composition but its design as well. As a result they’re still in circulation, although not as commonly as lower-value coins. Unfortunately at this point there’s probably zero chance of seeing halves return in the US.