Silver is one of four so-called “precious metals” considered as currency by contemporary international standards, the others being gold, platinum, and palladium. Its history as a repository of wealth goes back thousands of years, though.
Silver Forms, Purity and Uses
While silver exists in the earth’s crust in its pure elemental form and is more abundant overall than gold, it is most often found as an alloy with other metals or combined with minerals such as argentite. Most silver, therefore, has been produced as a byproduct ofcopper, gold,lead, andzinc smelting.
In its refined form, silver is bright, shiny and malleable, making it a favorite with jewelers, artisans, and coin makers as far back as biblical times.
It is also the best electrical conductor of all metals, giving it many uses in industry and technology. When compounded with other chemicals, it has both industrial and medical uses.
Silver’s purity is typically measured in parts per thousand, thus a 94%-pure alloy is described as "0.940 fine". Its amount is stated as weight in troy ounces, which are actually heavier than US Standard ounces by about 9½% (31.1 grams vs 28.4 grams). Sterling silver is an alloy of silver that contains 92.5% silver with the balance a non-precious metal, usually copper.So-called nickel silver or "German silver," is an alloy of 60% copper, 20% nickel, and 20% zinc. It was used to strike European coins prior to the adaptation of the Euro.
Silver as Money
Silver has been used as currency in the western world since at least 600 BC when the ancient Lydians began minting coins of electrum, a naturally occurring alloy of gold and silver. The early Romans minted a silverdenarius as their principal currency, with bronze coins used for smaller transactions.
As the Roman Empire declined, their silver coins were alloyed with bronze in increasing amounts until the silver content was completely gone. Gold and copper became the most common coins until the Arabic caliphate adapted the Persian silver drachmfor their own.
Meanwhile, silver coins became widespread and popular in western Europe. And when silver was discovered in the New World, things began changing rapidly.
Silver Currency in South America and Europe
Spanish colonies in Mexico, Peru, and Bolivia began exporting large amounts of silver to Europe, especially home to Spain, and the Spanish silver real became an accepted currency as far away as China. Coins were minted in Mexico to exacting standards of weight and purity, giving the value in terms of peso, the Spanish word for weight, the name the coins are known by even today. The most common peso coins were 27.468 grams of 93.5% pure silver and equaled eight Spanish reales, giving them their common name, “pieces of eight.”
Silver Currency in the U.S.
The United States didn’t have an official currency until 1792 when the U.S. Treasury began issuing coins at par with the Mexican peso. But even with official U.S. currency, the Mexican peso remained widely accepted well into the 19th century in the U.S. and around the world.
Modern Silver Coins
By the 18th century, most major nations had developed their own currency, usually based on gold silver, and copper. In 1792, the U.S. began minting copper cents and half cents and 90% silver half dime, dime, quarter, half dollar, and dollar coins. Larger denomination 90% pure gold coins, called Eagles ($10), Half Eagles, and Quarter Eagles, were also produced. The half cent was discontinued in 1857, and in 1866, the five cent nickel coin put an end to the half dime. A $20 gold Double Eagle was introduced in 1849 during the California gold rush.
Discontinuation of U.S. Gold Coins and Introduction of Silver Coins
Gold coins were made sporadically until they were discontinued in 1932. In 1942, a “War Nickel” of 35% silver was introduced to save copper and nickel needed for the war effort. It was discontinued in 1945. But with several design changes notwithstanding, U.S. silver coins are still made in the same denominations as the 1792 ones. With one major exception, of course—they don’t contain any silver.
No More “Real Silver” Coins
By 1964, the price of silver had risen to the point that it was no longer feasible to use it to mint coins of smaller denominations. Silver was replaced totally in dimes and quarters, and the new Kennedy half dollar was changed from 90% silver to 40% silver in 1965 and remained that way through 1970. After 1970, Kennedy half dollars were made of the same copper-nickel alloy as the other denominations. Silver dollars hadn’t been made since 1935, and when the Eisenhower dollar was introduced in 1970, it stirred up a controversy over whether it should contain any silver. A compromise was reached and a limited number of 40% silver coins were produced as commemorative coins, but the ones made for circulation were copper-nickel.
Today, the only “real silver” coins made by the U.S. Mint are commemorative or bullion coins. Other countries’ silver coinage has paralleled that of the U.S., with actual silver removed except for bullion and commemorative coins.
Collecting coins and currency is a fascinating and rewarding hobby, but you need to know what you’re buying and choose a dealer you can trust.The Great American Coin Company® offers a wide selection of collectible 90% silver U.S. coins, as well as currencies from around the world. While you’re browsing, don’t forget to check out the rest of our blog for interesting and timely articles about currency and precious metals.