Musings on Mexican Silver: Why all the different purities? What is a Libertad?
@CoinCrazyPA 's WTB thread about Libertads touched on something I've been a little frustrated about myself lately.
What is a "Libertad", and why is Mexican silver coinage so beautiful but so frustrating to precious metal stackers?
I think the heart of the problem is that Mexico released so many crown sized silver coins in the 20th century, (the biggest coin circulating at any given time, roughly the size of a silver dollar) but of vastly different purity ranging from the .999 purity of the winged liberty variety that many people call a "Libertad", down to the disappointing .10 purity of the 1950s-1960s era "Morelos" peso that we all excitedly bought from the 3-for-a-quarter bins at our local B&Ms only to find out they had little more than a silver wash. And some people seem to call them all "onzas", Spanish for "ounce", though few of them actually approach an ounce of silver. Then throw in the fact that late-19th century to early 20th century Mexican pesos actually say "LIBERTAD" on the Phrygian Cap on the obverse. It can be confusing.
Here's an incomplete list of the crown sized coins produced in Mexico just in the roughly 60 year period of 1920 to 1979. I've circled in red what % of an ounce each contains. Look how all over the board they are! And look at their current silver value on the right hand side. Some of these were supposed to be commemoratives, in a way. But I think many of these discrepancies resulted from devaluation of the peso. Note in some cases just a few years separated low peso, high silver coins from high peso, low silver coins.
Despite that, I LOVE 20th century Mexican silver. You just have to know what you're doing. Luckily, many of these pieces actually say what they're made of right on the coin itself. The 1947-48 "Cuauhtemoc" 5 peso (one of my all time favorites) literally says "30 Gramos Ley .900" or 30 grams at .900 purity, so actual silver weight (ASW) is .868 troy oz. I don't mind those being called "onzas" by people who don't care one way or another, especially when I'm buying BU examples at melt or less than melt
Regardless of the confusion, Mexico was way ahead of the curve on producing a one-ounce silver coin for silver investors. In 1949, they released the "Onza": a big high quality silver coin containing exactly one troy ounce of pure silver. 70 years ago! These chunky beasts say right on them "Una Onza Troy De Plata Pura" or "One Troy Ounce of Pure Silver", and go on to specify "Ley .925 33.625 Gramos" or ".925 pure, 33.625 grams" which is just over a troy ounce of sterling but exactly a troy ounce of pure silver. They even give the weights in both grams and grains! With no denomination, it was clear these coins were made for investors and savers and were not really struck to be spent. So popular were these, and so strong was the demand, that Mexico minted millions of them again in 1979 and 1980--years before the first American Silver Eagle was released:
At the time most of these were made, the late 1970s and early 1980s, the "silver wars" hadn't come to an end. Few people were familiar with .999 pure silver. Those who were likely figured pure silver to be too soft and not suitable for silver coinage. Americans were used to the 90% silver standard abandoned for the most part in the early 1960s. But at 92.5%, sterling silver was also familiar, and is even more pure than US coin 90% silver had been. From that perspective, it was a great choice. You could draw parallels to the Krugerrand, the wildly popular gold coin of the same era. The Kruggerand contains 1.09 troy ounces of 22k "crown gold"--91.67% pure--which is exactly 1 troy ounce of .999 pure gold. The crown alloy was a known, durable formula which survived circulation for centuries. From the perspective of people who actually spent silver and even gold coins, these alloys made perfect sense.
By 1980, we had survived the first mass silver meltings and sterling had been exposed to be less than desirable to smelters and investors. Why? Was it the gaudy things made from sterling? Was it the fast money lost on candlesticks and knives whose bases and blades were discovered to be plaster and steel rather than silver? Rolls and even the big, heavy bags of dimes and quarters were abundant and well-known, and their value easy to calculate. Did the relatively small amounts of sterling, in odd weights and shapes, just get in the way and slow down the process? These are my theories, I'd love to hear others.
By the first few years of the 1980s, things had changed. A new generation had grown up never having spent silver in any purity. Without the perspective of circulation, the need to alloy to a lower purity was foreign and unnecessary. The commodities markets, recently rocked by the Hunts, traded in .999 pure silver contracts. Sterling and 90% wasn't part of that equation.
JM, Engelhard, and other refiners made .999 pure silver bars measured in troy ounces, which had been known to institutional investors, specialty industries, and manufacturers for some time. They had no concerns over wear, and alloying with stronger metals was something industry didn't want or need. Oddly enough, the .999 pure, 1 troy ounce silver "art bars" of the late 1970s had proven the viability of a these smaller pure silver bars in 1 troy ounce increments. They also weren't made to be circulated, so there was no need for alloying there, either.
This growing familiarity and availability of .999 pure silver, and seeing coins as investment vehicles rather than circulating vehicles seems to have caused a dramatic shift around this time. And once again, Mexico was early to the game. In 1982-83, still years before the American Silver Eagle, Mexico released the "Libertad", a beautiful coin containing one full troy ounce of pure silver. Like the "Onza" before them, they had no denomination and were designed as an investment rather than circulation. And like the Onza, their weight and purity was indicated on the coin themselves. But unlike the Onza, the Libertad was struck from .999 pure silver, with no alloy, and weighed exactly one troy ounce:
So at one ounce of pure silver, a Libertad is an Onza. But as with the earlier, sterling silver Scale & Coin Press coin, not all Onzas are Libertads. To me, the Libertad is just the 1983+ winged liberty coin. I'm a bit of a purist, too: I don't think of the newer style Libertad as Libertads. But I'm funny that way
Anyway. Those are my musings on Mexican silver. I'm not sure my theories about what drove out sterling and lower purity coins and what led to pure silver coinage. But I think they're logical.
--Severian the Lame