Silver Coins as Circulating Money
Also: circulation silver, junk silver, pre-decimal silver, everyday silver coinage
Circulating silver coins were state-minted means of payment made from silver alloys that dominated everyday money for centuries, until rising silver prices forced their withdrawal and replacement with base-metal coinage.
For thousands of years silver was the backbone of everyday payment. From the Athenian tetradrachm through the medieval penny to the American Morgan dollar, silver quite literally shaped the world's money. When silver became permanently sought after as an industrial metal in the twentieth century, and the market price threatened to rise above the coins' face value, governments everywhere withdrew their circulating silver — a textbook demonstration of Gresham's law: bad money drives out good.
Historic fineness levels at a glance
Circulating coins were rarely struck from fine gold or fine silver; alloying additions (copper, nickel) improved wear resistance. The table shows selected fineness levels:
| Country / coin | Period | Fineness | Note |
|---|---|---|---|
| Ireland (florin, half-crown) | 1928–1942 | 750 ‰ | Free State silver coinage |
| Ireland (florin, half-crown) | 1943–1969 | copper-nickel | silver removed |
| German Empire (1 Mark) | 1873–1918 | 900 ‰ | silver standard to WWI |
| Switzerland (franc / half-franc) | to 1967 | 835 ‰ | equal to 835 silver |
| USA (dime, quarter, half dollar) | to 1964 | 900 ‰ | "pre-65" coins |
| USA (Kennedy half dollar) | 1965–1970 | 400 ‰ | transitional alloy |
| United Kingdom (shilling) | to 1919 | 925 ‰ | sterling silver |
| United Kingdom (shilling) | 1920–1946 | 500 ‰ | fineness reduced in 1920 |
The end of circulating silver: Gresham's law in action
As the silver price rose after the Second World War, and especially through the 1960s, the melt value of many coins approached or exceeded their face value. People began hoarding and melting silver coins — economically rational, but destructive to circulation. You can work out the melt value of a coin at any time from the current silver rate and the fineness:
Melt value = gross weight (g) × fineness × silver price (per g)
The US Coinage Act of 1965 removed 90% silver from daily circulation. Ireland had already dropped silver from its coinage by 1943, moving to copper-nickel; the earlier 1928 series is prized today.
"Pre-65" coins as collectible and investment
Former silver circulation coins are traded today in two distinct ways:
- Numismatically / as collectibles — rare years and high grades (VF, XF, MS) command premiums well above the silver value.
- As "junk silver" — worn coins with no numismatic premium change hands by weight, often in bags with a set face value. Trading tracks the current silver price.
Well-known examples include US "pre-65" dimes, quarters and half dollars, together with Irish and British pre-decimal silver and Swiss franc coins to 1967. The scrap-silver segment covers these pieces once their melt value dominates their numismatic worth.
Tax notes (not tax advice)
In Ireland the sale of silver coins — unlike investment gold — is in principle subject to VAT (currently 23%). Dealers may in certain cases apply the margin scheme, which limits the taxable base to the trading margin. A private investor's gain on selling is instead chargeable to Capital Gains Tax at 33%, after the annual EUR 1,270 exemption, with no holding-period relief — quite different from the German one-year rule. For your own tax and investment decisions always consult a professional; this is not tax or investment advice.
In brief
Silver coins as circulating money are a closed chapter of monetary history, yet they leave a lively market behind: whether as a historic collectible or as a cheap route into physical silver, their worth can always be worked out transparently with the melt-value calculator and the silver calculator.