The difference between junk silver, constitutional silver, and 90% silver
When it comes to the topic of silver, particularly in the United States, three types are sure to come up: junk silver, 90% silver, and constitutional silver. Going by the names alone, these three appear to be different entities that share a common denominator: they are either silver or backed by silver. The question is just how different are they? What makes them distinct enough to garner their own titles? Furthermore, do they share any similarities beyond their connection to silver?
Why buy junk silver?
First and foremost, “junk silver” is a misleading name. Before 1965, U.S. dimes, quarters, and half-dollar coins circulating through the market consisted of 90% silver. A majority of the structure is made up of precious metal, but unfortunately, they are seen as having little to no numismatic value. In other words, to a coin collector, they are worthless.
Taking this into account, why are they referred to as “junk silver”? Well, their value is based exclusively on their metal content rather than their condition or collectability. All in all, “junk” simply means that they are not numismatic. Even though many coin collectors consider these coins to be completely void of numismatic value, they are still quite valuable to investors. In fact, they are continuously bought and sold in bulk due to their silver content’s overall value.
The best way to understand how this coinage works is by using the Washington quarter as an example. This coin was produced in 1932, then in 1934 through 1964, and it has a silver content of 90%. Therefore, someone will know that its worth will always be $0.25, but it might also be worth much more should inflation render $0.25 valueless. Conversely, if silver’s value were to substantially appreciate in comparison to the dollar. On the other hand, in the event of the value of the precious metal declining (such as huge discoveries of silver rendering it close to worthless), the currency will still retain its worth of $0.25.
Once upon a time, junk silver coins functioned as legal tender for common necessities like clothing, food, and even gasoline. Nowadays, people opt to purchase junk silver for both investment and survival objectives. There are plenty of reasons as to why many investors are adamant about buying junk silver. The most notable ones are the following:
- Limited risk with significant returns: Investing in junk silver holds a great amount of potential for investors who are looking to boost the value of their portfolio. The value of the silver in one’s possession – which has a high potential and considerably low risk – derives from the silver spot price. Not too long ago, it resided in the $14 to $15 range per ounce.
- Total ownership: As soon as someone buys junk silver, they are officially in complete ownership of their investment. On the whole, it would be wise for people to store their investment somewhere in their home that they deem secure. This way, they can avoid putting their silver investments into storage with a bank, much like how they would have to with bars or bullion.
- Low premiums at face value: Selling junk silver is done so based on its weight instead of its face value. When purchasing junk silver by mass, it means that the buyer is also purchasing silver dimes, quarters, and half-dollars that carry the same face value. Moreover, they weigh less than they did when originally minted before 1965. This could mean that buyers are getting less silver out of their purchases because the silver amount has been worn out of the coin. However, it also means that they are buying it at a lower premium than they would on new silver.
- It is the real deal: U.S. Mint dimes, quarters, and half-dollars that were created prior to 1965 are well-known as “the real thing.” There is no need to assess them in order to determine their precious metals’ content. They do not need to be evaluated by an expert to figure out what grade they are. It is not difficult to find a buyer who recognizes that a $100 face-value bag containing these coins possesses 71.5 ounces of pure silver and will pay accordingly.
What U.S. coins are 90% silver?
Many coins are categorized as 90% silver. All dimes, quarters, half-dollars, and dollar coins that were minted for circulation prior to 1965 have a 90% silver composition. The only exception comes from the chance that those denominations struck before the 1840’s. In this case, the silver composition they were minted from was 89.24%.
Below is a list of the U.S. 90% silver coins that were minted for distribution during the 20th century:
- Barber dimes (1892–1916)
- Mercury dimes (aka. Winged Liberties) (1916–1945): Mercury dimes from 1916-1931 deserve more attention. A good chunk of these dates only possess a small premium over the common price, but there are some exceptions. Any uncirculated or nearly uncirculated years have the potential to be worth a sizable premium. Some dates will have substantial premiums even in low grades.
- Roosevelt dimes (1946–1964): If circulated, these coins are not typically worth sorting by date. This series’ uncirculated coins often command a premium.
- Barber quarters (1892–1916)
- Standing Liberty quarters (1916–1930)
- Washington quarters (1932–1964): In this era, a majority of circulated quarters are conventional and trade in relation to the value of their silver content. Uncirculated coins in this series have a much higher worth. The coins created in the 1930′s and 1940′s are likely to be worth more so long as they are nice, circulated examples.
- Barber half-dollars (1892–1915)
- Walking Liberty half-dollars (1916–1947): These coins might be worth a small premium. Coins from this series that are either uncirculated or lightly circulated have more value.
- Franklin half-dollars (1948–1963): These coins are common in circulated condition. Uncirculated ones are worth much more, especially those of the earlier years; usually $15-$30 per coin.
- Kennedy half-dollars (1964): In circulated condition, these coins are commonplace and trade in relation to the value of their silver content. Rolls consisting of uncirculated coins have a higher chance of being worth a slight premium. Those that are dated 1965-1969 are 40% silver, plus they trade in relation to their silver content value.
- Morgan dollars (1878–1921)
- Peace dollars (1921–1935)
It is important to remember that this list only contains coins struck for circulation. There are plenty of collector-only strikes that have been distributed since the 1980s and 1990s that are 90% silver in composition. Some are even purer than that. However, these strikes never received a formal release into regular circulation nor was it intended for it.
The best way to look at this is that all U.S. coins with a face value exceeding 10 cents that were made prior to 1965 are 90% silver.
It is important to keep in mind that 90%-silver coins are at their strongest in two specific market areas. One is with the precious metal buyer, and the other is with coin collectors. Usually, when the value of silver coins temporarily declines due to a fall in silver’s price, it is possible to recover one’s losses by selling the coins to numismatic collectors. Specifically, those who want silver coins of certain dates and mintmarks complete their collections.
What is constitutional silver?
In the grand scheme of things, “constitutional silver” refers to the same thing that junk silver and 90% silver do. That being 90% silver dimes, quarters, half-dollars, and dollar coins deriving from the pre-1965/pre-1964 era.
The difference ultimately lies in the name that one prefers to use. Some do not care for the use of the word “junk,” regardless of the fact that it does not necessarily mean it is trash. Others are more inclined to use, and like to hear, the word “constitutional” because the U.S. Constitution establishes the requirement for a bi-metallic gold and silver standard. Some theorize that it is merely a marketing term, taking advantage of people’s uneasiness when it comes to fiat currency and insinuating that silver-based coins are “constitutional.”
It does not matter which name someone prefers to use. Generally speaking, it all refers to the same silver coinage.
Dwindling junk silver coin supplies
From 1979 to 1980, silver spiked in price to near $50 oz. At the same time, a large portion of silver coins was melted down. Various experts estimate that approximately 98% of all junk silver coins were set to be melted down during the spike in silver’s price around the time of the 1980 increase. Put simply, 90%-silver coins became rarer due to having been melted down throughout the decades since their final creation.
This was not a single occurrence, though. In early 2018, a story from Silver Doctors came out concerning junk silver coins, telling of the reintroduction of melting down 90% silver coins that happened courtesy of a lack in demand.
Many people believe that melting 90% silver coinage is illegal, when in fact, it is not. What is actually illegal is melting down pennies and nickels. However, this does not include any 90% silver coins from 1964 and prior.
Historically speaking, all that has been minted is already out there in the world. A majority of the 90% silver coins that have gotten minted have also been melted down and cast into either .999 silver bars or silver shot to serve as a component in industrial or contemporary silver bullion applications.
All of the 90% junk silver coins ever minted in the U.S. is all there ever will be. Thanks to the numerous meltdowns of these 90% silver coins occurring throughout from the late 1970s to the present-day, these coins have and will gradually become scarcer.
Reasons silver investors buy junk silver coins
Junk silver investors are often people who purchase guns and make plans for worst-case scenarios, such as hyperinflation or a short-term collapse of society. In contrast, there are some who are simply bullish on silver and see this as a straightforward method to buy silver in easy-to-measure quantities.
Some may stumble upon junk silver because they are supporters of garage sales or what is referred to as “pickers.” These people usually find the coins in estate sales where the sellers do not fully understand the value of what they have and assume they are akin to coins of the modern era. Moreover, they presume that they do not have any valuable metal in them and would rather use minerals like nickel or zinc.
Another reason why investors will purchase junk silver is its value. In the mid-1960s, following the conclusion of their minting, the U.S. made the melting down of junk silver coins legal. Those who possess junk silver typically melt it down in order to transform their coins into silver bulk. These can either be repurposed into silver mass or resold.
This junk silver’s value derives from the lack of 90% silver U.S. coins minted since 1965. This means that there is a limited amount of junk silver coins out there. This is why these coins that are worthless from a numismatical standpoint are highly valuable on the market.
There have been very few changes to the value of junk silver since the late 1960s. However, it has experienced periods of increased spot prices, melting, and selling. During the past few decades, junk metals have seen significant premiums that surpassed the value of 20% over the spot price of silver.
Though the names are different, at their core, constitutional silver, 90% silver, and junk silver all refer to the same thing. Anyone can call them one of the three ways, but at the end of the day, this silver coinage is not junk in the general meaning of the word. In fact, it is far too valuable to be dismissed as rubbish.
Constitutional, junk, and 90% silver coins will remain a coveted form of silver as it continues to see a steady decline in quantity. At the same time, it is an essential part of American history that almost anyone can own nowadays.
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