Dear President Kennedy, We're out of silver..

PhillyJoe

On November 27, 1961, Douglas Dillon, Secretary of the Treasury sent a letter that our silver bullion used for coinage had dropped from 222 million ounces in April 1959 to just 22 million ounces on the day of his letter. Worldwide consumption was up, production was down. Whenever you tell the President there's a problem, you better have a plan to fix it. Dillon suggested that we stop keeping a silver bullion reserve for the silver certificate currency. That silver amounted to 1.7 billion ounces.

"Dear Mr. President,
I suggest that you consider recommending to Congress the enactment of legislation to issue Federal Reserve notes to provide an orderly long-term means for replacing the supply of silver certificates and thereby freeing the supplies of silver that will be needed to cover future coinage requirements."
-Douglas Dillon"

The Act of June 4, 1963 allowed the exchange of silver certificates for silver bullion until June 24, 1968.

(While freeing up the silver reserves was a workable solution, the following year we were almost out of silver again and the Mint Director's plan to move to clad coinage became the Coinage Act of 1965)

Joe

dbldie55

Nice historical tidbit. Thanks for sharing.

cladking

I had forgotten about this move. If memory serves it was about this time the reserve requirement for banks was reduced again. There was little silver hoarding going on in 1961 judging by mintages but it was starting to ramp upward.

Deadhorse

And there was a lot of silver hoarding going on when 1965 rolled around.

I remember my Mother, who owned a beauty shop at the time, began stashing away all the silver coinage that was taken in by her shop for years and years.

She did very well with it in 1979 and in fact retired early, in part due to her stash of dimes, quarters and halves.