The US does not permit silver coins in circulation, but that was not always the case. Until the passage of the 1965 Coinage Act, silver coins were common in US circulation. On July 24, 1965, however, the US Senate passed the act which eliminated silver dimes and silver quarters from the circulating currency.
The act was penned in response to silver shortages that had slowed the production of new coins since the late 1950s. The nation’s silver stores were depleted and President Johnson thought the coinage act would solve the silver problem.
The act moved through the house on July 14th, 1965 with a few amendments which the Senate agreed to on July 15th. President LBJ signed the Coinage act July 23, 1965. Silver was entirely removed from US dimes and quarter-dollars, and 60% of the silver was removed from circulating half-dollars.
Just a few years later, in 1970, President Nixon removed the silver from circulating half-dollars but retained part-silver dollars for collectors. The US continued the tradition of precious metal removal in 1971 when Nixon took the US off the gold standard.
Each of these steps pushed the US further into a fiat currency and away from representative money. Representative money is backed by tangible wealth; typically precious metals and sometimes other items of value like barrels of oil. Fiat money has value because a government or other power says it does. In our History of Coins post, we discuss the transition from representative to fiat currency and speculate about the future of money as an intangible.
The history of money is a fascinating topic we enjoy exploring here at Pendant and Ring. There are so many interesting angles to explore, and an infinite number of futures to think about! Subscribe so you never miss a post and we will see you next time on Pendant and Ring.