Silver and the Coin Shortage

December 2, 1964

Report Outline
Shortage of Silver and Silver Coins
Silver Question in American Politics
Methods of Relieving Silver Shortage
Special Focus

Shortage of Silver and Silver Coins

Likelihood of Cut in Silver Content of Coins

Debasement of America's silver coinage looms as a regrettable but necessary measure to end a nationwide coin shortage and to protect the Treasury's silver stocks. Proposals for fundamental revision of the coinage system are expected from the Treasury Department early in 1965, when it sends to Congress recommendations based upon a year-long study of the so-called “quiet crisis” in silver.

A worldwide silver shortage, the pressure of rising silver prices, and an insatiable demand for silver coins have combined to make a change unavoidable. Many experts believe there are only two practical choices: a reduction in the silver content of United States coins, or substitution of a cheaper metal alloy for silver in some of the coins. The New York Journal of Commerce reported, Oct. 14, that the solution that seemed most likely was “a partial Treasury withdrawal from use of the metal [silver] for coinage.”

Managing the changeover was described as “a very tricky assignment,” because the Treasury would have to balance off as equitably as possible the interests of silver producers, silver users, retailers, banks, vending machine manufacturers, consumers, and producers of other metals. Even partial Treasury withdrawal from use of silver in coinage would present delicate political and psychological problems. The present silver coinage system has been in use with relatively minor changes since the first coinage act was adopted in 1792. The high silver content of the dime, quarter, half-dollar and silver dollar not only gives the coins high intrinsic value but also helps to support public confidence in paper money.

ISSUE TRACKER for Related Reports
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Feb. 26, 1969  Money Supply in Inflation
Feb. 14, 1968  Gold Policies and Production
Dec. 15, 1965  Anti-Inflation Policies in America and Britain
Mar. 15, 1965  World Monetary Reform
Dec. 02, 1964  Silver and the Coin Shortage
Oct. 17, 1962  Gold Stock and the Balance of Payments
Dec. 15, 1960  Gold and the Dollar
Oct. 10, 1956  Old-Age Annuities in Time of Inflation
Jan. 17, 1951  Credit Control in Inflation
Aug. 10, 1949  Dollar Shortage
Oct. 04, 1943  Stabilization of Exchanges
Jan. 21, 1941  Safeguards Against Monetary Inflation
Mar. 25, 1940  United States Gold in International Relations
Dec. 14, 1937  Four Years of the Silver Program
Oct. 04, 1934  Inflation in Europe and the United States
Jan. 30, 1934  Dollar Depreciation and Devaluation
Sep. 05, 1933  Stabilization of the Dollar
May 29, 1933  Invalidation of the Gold Clause
Mar. 15, 1933  Inflation of the Currency
Oct. 25, 1924  Bank Rate and Credit Control Federal Reserve Policies and the Defaltion Issue