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The Great U.S. Mint Silver Coin Swindle

By Tom DeLorey for CoinWeek.com …..
Most U.S. coin collectors know that the United States Mint continued to pump 1964-dated 90% silver dimes, quarters and half dollars into circulation through 1965 and into early 1966. The reasons for doing this were several, some of them quite reasonable at the time.

What most collectors do not know is that in the second half of 1967 the Mint secretly began clawing some of that silver back, melting down dimes and quarters and refining it back into .999 fine bars that could be sold at a higher price than the face value on the coins so destroyed.

The first good reason to issue the coins was to discourage the hoarding of rolls and bags of Brilliant Uncirculated modern coins. In the post-WW2 era there were several years where the total annual mintage of a given date and mint mark combination was relatively low across various denominations. This reflected the fact that the Federal Reserve System routinely recycled older coins back into circulation (minus worn-out or damaged pieces condemned as “uncurrent”) and only ordered new coins from the Mint when the current demand exceeded the recycled supply.

One of the most famous examples of a low-mintage modern coin is the 1950-D Jefferson nickel, with only 2,630,030 made and easily half of those snapped up by speculators. By the end of the decade original $2 rolls were selling for around 10 times that much.

In 1960, the Philadelphia Mint struck only 2,075,000 cents with a Small Date style in early January before switching production over to foreign coins for the next few months. By the time the Mint resumed domestic production in late March the date style on the cent had changed to a large format, and rolls of the Small Date cent skyrocketed. People began hoarding anything BU in the hope that lightning would strike a third time.

Other factors influencing U.S. monetary policy included a surge in the use of vending machines, so that the net demand for coinage always exceeded the recycled supply, and the introduction of the wildly popular Kennedy half dollar in 1964. On top of these factors the Treasury Department, a major player in the bullion markets for over a century, faced an inexorable rise in the market price of silver that threatened to make silver coins worth more as bullion than their face values.

A 1964-dated quarter. Struck in either 1964, 1965, or 1966. Who knows for sure when…

For years it protected the silver coinage supply from being melted by selling virtually unlimited supplies of pure silver at $1.29 an ounce (the level at which the silver in a silver dollar was worth one dollar) but it knew that if it kept on doing this that it would eventually run out of silver.

The Treasury had seen three previous periods when precious metal coins were hoarded and/or melted for their metal (gold in 1834, silver in 1857 and both during the Civil War), and it needed to keep an adequate supply of silver coins in temporary circulation while it ginned up a permanent replacement for them.

That search took time, however, and while it was taking place the Mint had to keep providing coins to the banking and vending machine industries. And so in late 1964 the Treasury announced that they would be freezing the date on coins of all denominations at 1964 until further notice. It saw one immediate victory as the speculative market in rolls and bags of modern coins crashed spectacularly, but there was still the issue of silver going out into circulation.

The testing of new coinage materials included various exotic compositions that might have been more secure in the long run, but in the end the immediate needs of the vending machine industry won out over the exotic materials that might work better years down the road. The sandwich materials authorized by the Coinage Act of 1965 included two copper-nickel outer layers clad upon a pure copper core for the dime and quarter, and two 80% silver/20% copper outer layers clad upon a 20.9% silver/79.1% copper core for the half dollar, the total coin averaging 40% silver.

The new coins were of approximately the same thickness as their 90% silver predecessors but because copper and nickel are less dense than .900 fine silver they weigh a bit less. This weight difference soon became extremely important.

The Mints began striking 1965-dated CN-clad quarters on August 23, 1965, while continuing to strike 1964-dated .900 fine quarters until January of 1966. The last silver quarters were struck at the San Francisco Assay Office (the former San Francisco Mint, which had closed in 1955 due to a then lack of demand for coinage!), which had been re-opened in the early 1960s to help fight the coin shortage. Coins made there before 1968 were struck without mint marks to discourage hoarding.

After a large quantity of clad quarters had been stockpiled (again to discourage hoarding), they were released into circulation in November 1965. The production of CN-clad dimes began a few months after the quarters, but they were not released until January 1966, probably to avoid interfering with the 1965 Christmas shopping season. In those days, when credit cards were not as common as they are today, the Mint typically saw an increased demand for coins from Thanksgiving until the new year. The striking of .900 fine dimes at Denver ended in early 1966.

The 1965 cent and nickel began production on December 29, 1965, and the 1965 half on December 30, but the half dollar does not figure into the silver withdrawal story. Huge quantities of 1965-dated dimes and quarters were struck through the end of July 1966, followed by huge quantities of 1966-dated dimes and quarters in the last five months of 1966.

Normal dating resumed in 1967, but the Mints continued to produce huge quantities of clad dimes and quarters in that year. The reason for this huge mintage was that the Treasury Department wanted to start clawing some of the silver coins back, because it knew that ordinary citizens were doing just that!

Take, for instance, my parents, and my first wife’s parents. All four of them were born around 1920, and they were all old enough to be fully aware of how damned hard life was during the Great Depression. When the clad quarters and dimes appeared both families began hoarding the older .900 fine silver dimes, quarters and halves. Millions of other “Depression Babies” did the same. My mother always told me that she slept better knowing it was there in her hiding place.

As the budding numismatist in the family I was responsible for checking the dates on the coins and putting them in paper rolls and marking the rolls “SILVER”. Canadian silver coins, common in Detroit (except for 50 cent pieces) were rolled and marked separately. My only mistake was when my parents asked if they should start saving the 40% silver halves as well. I did the math and calculated that silver would have to rise above $3.38 for the coins to ever be worth more than face value, and that would never happen! Never say never.

My brothers-in-law tell me that their Dad used to stop at his bank on payday and get rolls of dimes and quarters and bring them home where he and the boys would look through them. When the silver in the rolls dried up, my future in-laws bought quantities of “junk silver” coins from a Chicagoland coin dealer.

While they were doing this, the Treasury Dept. decided at some point during 1967 to go after the silver coins themselves.

During testimony before a House Subcommittee on Appropriations on February 27, 1968, Mint Director Eva Adams said “During 1967 the Mint was assigned an additional task resulting from the decision to recall circulating coins from the Federal Reserve System in order that silver Dimes and Quarters could be held as reserve inventories for emergency situations. The Mint will separate the mixed lots of subsidiary coins returned, retaining the silver coins.”

Eva Adams watches a coin sorting machine pull out silver coins. Image Credit: Coin World.
Mint Director Eva Adams watches a coin sorting machine pull out silver quarters. Image Credit: Numismatic Scrapbook Magazine / Coin World. Used with Permission.

Elsewhere in the testimony it is revealed that the separation was accomplished using a “delamination inspection machine” built by American Machine & Foundry. Thirteen prototypes of this machine had been authorized in June of 1967 “to replace the present manual-vision reviewing” system. I believe that this new machine was originally intended for the Fourth Philadelphia Mint then under construction, which finally opened in 1969. I assume that eventually all of the Mints would have used them.

I could not find any details anywhere on what this machine was or how it operated. My best guess, based upon the name, is that it was originally intended to find and segregate CN-clad planchets that had had one or both cladding layers split off, or de-laminate, prior to being struck. It was expected to ultimately test up to 50 planchets per second, and the best way I can think of it doing that would be by weight. A clad layer constituted one-sixth of the thickness of a planchet, and so a de-laminated planchet would be 16.67% underweight.

When sorting silver and clad coins, just set your desired weight at that of the silver coins, and the clad coins–which are slightly over 9% lighter–will go into the reject bin. Return those to circulation and keep the silver ones. A few “slick” silver coins, coins worn almost smooth (which typically average about 7% lighter), might have gone into the reject bin as well, but perfection was not the object and the Mint had a LOT of coins to sort.

The high volume of coins eventually sorted by the Mint was made possible by a little trick at the Federal Reserve Banks.

Starting at that unrecorded date in 1967, the FRBs stopped automatically recycling the dimes and quarters received by it from member banks and started warehousing them. Between December 1966 and June 1968 the total face value of all coins held by Federal Rerserve Banks rose from $277.5 million to $413.5 million, presumably much of it as mixed silver and clad batches awaiting sorting.

During this secret diversionary program the commercial demand for dimes and quarters was met almost exclusively with clad coins struck during those huge mintages of 1965, 1966 and 1967-dated coins. There are references to some mixed batches of clad and silver coins being intentionally re-released when commercial demand temporarily outstripped the supply of new clad coins, but there are indications that the banks sampled the silver content of incoming batches, which would have enabled them to re-release those with the highest percentages of clad coins.

During that Congressional hearing, Ms. Adams was asked if the Mint had a rule of thumb for estimating how many silver coins remained in circulation. She replied: “This was handled through the Federal Reserve banks. We have a sampling process set up as to the approximate proportion of silver and clad which should be expected. I think the ratio of silver to clad coins is going rapidly down. The silver coins are being held out, or they have been used up. It is getting this way all over the country. This morning we received the January report of a coin sample done by one of our groups. 74.8% of the sample were clad compared to 73.5% in December.”

“We are getting many more clad in with the silver. In other words, the silver coins just aren’t there any more.” Congressman Steed replied: “That indicates that you are in sort of a race with the public, generally, trying to take these coins out of circulation?”

Ms. Adams replied: “I think this was anticipated.”

At the signing of the Coinage Act of 1965 on June 23rd of that year, President Johnson said: “Our present silver coins won’t ever disappear and they won’t even become rarities… If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content.”

My parents and future in-laws disagreed with him, as did millions of other Americans. The Mint did too.

According to the Annual Report by the Secretary of the Treasury for the Fiscal Year Ended June 30, 1970, a total of 212.3 million fine ounces had been recovered during the first three years of the program, or approximately $294.5 million face worth of dimes and quarters.

Even then there may have been more bins of mixed coins sitting in Federal Reserve Banks waiting to be sorted. Mint Reports did not bother to mention them. Curiously, silver half dollars were not recalled, either because there were not enough of them coming into the FRBs to bother with or, more likely, because they would have had to have been replaced with 40% silver half dollars, and the gain in silver would have been much less.

Tom DeLorey
Tom DeLorey
Tom DeLorey's career began at Coin World in the early 1970s where he became editor of the "Collector's Clearinghouse" before joining the staff of the American Numismatic Association (ANA), holding the position of senior authenticator for its certification service from 1981-1984. A prolific writer, Mr. DeLorey is the co-author and technical editor of several books and contributing editor to many numismatic periodicals. His efforts have earned him the ANA's Heath Literary Award on three occasions, the Wayte and Olga Raymond Memorial Award twice, and two Numismatic Literary Guild awards. He is a contributor to both the Guide Book and the Handbook of United States Coins, as well as other standard references. He also remains a consultant to the ANA Authentication Bureau.


  1. Question, so should I hold onto my Kennedy half dollars. I have both kinds 90% and clad. Plus I also have a few pre kennedy halves as well.

    • Certainly any 90% halves are worth more than face value. However so many 1964 halves were saved that any you have are only worth their melt value. Uncirculated and proof issues of course are exceptions.

      As for clad halves, the 40% silver versions dated 1965 through 1969 are still worth more than 50¢ as scrap silver, though obviously a lot less than their 90%-silver predecessors. Anything dated 1971 or later is of course just a Cu-Ni “sandwich” that’s only worth face value (proof and unc. again excepted).

      In retrospect the Mint made two disastrous blunders with the half. The denomination circulated regularly before 1964 but the new JFK coins were vacuumed out of circulation as mementos of the martyred president. The further decision to keep minting it in silver, albeit at 40%, guaranteed that later-date coins would be pulled for their metal content if not their sentimental value. Had the Mint resumed the familiar Franklin design in 1965 AND immediately switched the composition to Cu-Ni, it’s highly possible the denomination might have continued to circulate.

    • Yes, hold onto all your silver and gold, unless you absolutely need to sell some to survive. It is a hedge against inflation and the fiat financial system. If or when the financial system crashes, precious metals will still be recognized by people to at least use as a way to barter for things. But, we can’t eat it though and having a sizeable nonperishable reserve food supply is highly recommended.

      • When my great-grandmother went shopping a 100 years ago thing were different! She didn’t use $5, $10, $20, or $50 dollar bills. She used a half dollar, then a bunch of quarters, dimes, nickels, and pennies. So, if we used the same type of currency minus the silver, we’d be using wheel barrels to go to the supper market! Yes, my Silver dollars, halves, quarters, 20 cents pieces, dimes, half dimes, war nickels, and 3 cent silver pieces, are all saved! Even my used to be common junk silver like 40% halves, halves, quarters, dimes, and war nickels, plus Canadian Silver is still in my hands. We saw Trillion Mark notes circulating in The Wiemar Republic. And look at the value of Double Eagles, which are slightly less than an ounce of Gold! Our paper money is wortless!

    • Just goes to show you, it never pays to give advice! You really missed on that one, just ONE MONTH LATER I was selling my silver at 58% higher than your highest stated price of $19/oz. During July & August 2020, I sold ~2,000 ozs at $28.82 – $29.91. As the price dropped, I stopped. I resumed selling again in January 2021 when prices temporarily topped $30/oz.
      Most of this was silver I’ve had since 2005 – 2011with an average cost around $9.00 I sold a similar amount in first part of 2011 between $36 &48/oz. In total, I have now sold about 70% of my Silver… Frankly I was expecting the price to drop significantly by now, which obviously has not yet happened. I can’t say I have regrets, but If I could do it over, I would probably sell only 40 to 50% of my holdings. If given the chance, I think I would be a buyer again at <$20/oz.

  2. Expect at some point, probably during some kind of economic crisis and high inflation, that they will raise the price of silver high enough to tempt most people to sell it. After they recover and control a large percentage of it, they will blow the price through the roof where people won’t be able to afford to buy silver and will no longer have a hedge against inflation. Will only have worthless fiat currency. We all know that at some point they will do away with coin and currency and have a one world cashless financial system. Doesn’t seem too far off.

    • What you’re saying already happened with American Gold coins! Another problem is the mark up though. The commisions are too big when buying and selling. The newer 40% silver Ss are sold in mint sets. So the Ss are sold at way over the Silver value. Also the .999999 one ounce Silver dollars are sold at way over their Silver value too.

  3. I would strongly recommend holding onto these coins! The quantity of paper money being produced by world banks is horrendous. This creating inflation particularly in the world stock markets. These will probably crash this fall.

    This will result in a rush to the bullion marketplace for some HARD assets.

  4. I don’t know about all that. About how many years have we heard that familiar refrain. You know, the one about Christ’s return. If something ever happens to our currency, not to worry, it won’t happen in your lifetime.

    • Wow what confidence…but this sounds something like the mockers that are to come in the last days…DO worry if you are impenitent…he IS coming. ACTS 2:38

    • It was a good read. I remember working In the sixties when everything he wrote about was a big concern. And rightfully so as we as a Nation have become a credit nation rather than a live within your means Nation. Our purchase power compared to wages is way out of whack due to credit for everything. Slaves really.

  5. I look at silver like I look at Ammo for guns. Hoard mentality has made ammo in such demand the price is going crazy high, if you can get ammo at all. With the demand for silvers industrial use alone in batteries; A person could draw a parallel line of hoard mentality, (unless) Elon Musk can grab that astroid out of space worth trillions more than all earth’s minerals maybe? Short of buying equipment and seed to plant a garden and a book to learn how to be a success in buying canning jars, and pressure cookers. . Silver will always be a good hedge against fear of everything. And some of the mints are turning out some pretty rounds and bars

  6. Hoard whatever you want if it makes you feel good. Once the inmates take over the asylum it isn’t going to matter anyway. With the current political leadership around the world the loony bin doors must be wide open.

  7. I remember when they started clawing back the silver but I was very young at the time and just sorted my pocket change I did not grab rolls of quarters but looking back now I wish I had .

  8. Y’all do know that people have been predicting the end of time since the beginning of language. The end is nigh! The end is nigh! The end is nigh! Well, it’s not here yet. The system still seems to be functioning. Might stop any day, and then all the silver and gold you’ve hoarded will certainly come in handy. But right now things are rolling right along just like they have been for all of the 64+ years I’ve been around.

  9. I believe that in time the people that have any gold or sliver in hand will be on top of the chain… not on paper or in a banks vault… I talking in hand. When this poor world take a hard last breath..(because of the way the government is running the show)..we people that have the coins, the silver and gold in Hand… will not have to worry…
    To all the people that adk.. should I sell?? Put the coins or bars in your safe… leave them there… they are not hurting anyone by being there..you may need them to live in time..


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