Question about the 1962-1964 run on silver dollars from the U.S. Treasury
CaptHenway
Posts: 32,761 ✭✭✭✭✭
If a person stood in line at the U.S. Treasury Building to buy a bag of silver dollars, did he have to present $1,000 in Silver Certificates when he got to the counter?
If after checking them and finding that they were all common coins that person went back to the Treasury Building and deposited them, how was he paid? Silver Certificates? Federal Reserve Notes? A check?
Anybody know for sure?
If your local First National Bank of Whoville ordered a $1,000 bag of silver dollars from the Federal Reserve System for its cash reserves, did it have to pay for them in Silver Certificates?
Anybody know for sure?
Facts only please. No guessing.
Thanks,
TD
Numismatist. 50 year member ANA. Winner of four ANA Heath Literary Awards; three Wayte and Olga Raymond Literary Awards; Numismatist of the Year Award 2009, and Lifetime Achievement Award 2020. Winner numerous NLG Literary Awards.
2
Comments
I.e., Did Harry Foreman have to find thousands in silver certificates to buy all those bags of dollars? what did he get when he turned in his rejects -- silver certificates, a check, or...?
(In that era, when I went to the local bank and bought silver dollars I was never asked for silver certificates -- all forms of paper currency were interchangeable as far as the local bank was concerned.)
When my dad told me about buying bags out here, for his coin dealer brother in N.C., he never said that he paid in anything but plain old cash.
"All debts, public and private" must mean what it says?
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But back then Silver Certificates were plain old cash. You just had to have a lot of them because the largest notes around were only $10's.
Clearly I only have anecdotal information - I have no idea whether he was asked for only silver certificates in exchange - but knowing my dad (he put the "anal" into analysis), had he been forced to do so, it would have been not only mentioned but heavily derided.
I lost him last year, and miss him greatly. This is one of those questions I would like to have asked him - it would have turned into a two hour discussion, I'm sure
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I remember the news stories when people were lining up to get those silver dollars. All they needed was plain old cash money. They did not need to be silver certificates. The silver certificate thing really didn’t cut in until the mid 1960s until the government stopped redeeming them in silver, which I think was the summer of 1969.
So far as those people who took them back to treasury, I’m not sure of any of them did. To check the dates, you would have had to cut open the bags to look them. Once cut, how did the treasury know that they weren’t shorted? I know that you could weigh the bag, but that is not foolproof because one could slip slugs in the bag to make up the difference. In that case the contents of the bag would have to be machine or hand examined. I’m not sure if the government was prepared to do that.
If it helps, here is a story I heard from some coin dealers in the early 1970s. After going through the bags, they took the common date coins to the shows and sold them for slightly under a dollar to get rid of them. This would have had to have been circa 1960, ’61, ‘62 or early ’63. Soon after that silver hit $1,29 per ounce which was the magic number for silver in a silver dollar to equal a dollar in cash. I don’t think those guys would have been selling those dollars for melt, given the speculation about the direct of the silver price.
Thanks to all that responded. I am satisfied that SC’s were not needed to buy silver dollars.
Wish I had the opportunity.
Some of us thought, incorrectly, that the silver certs would become scarce and that silver dollars would never become anything as they were so plentiful......oh my. I saved the certs.....need any?
bob
I know nothing but do not know of anything that was dependent on the type of currency used. FED notes, silver certificates, gold certificates and every kind of legal tender was on equal footing so far as I ever heard.
After the Coinage Act of 1965 only silver certificates were redeemed with silver but I doubt the FED anticipated anyone demanding to redeem them since they could just as easily purchase silver as coin. It was strange that so much good currency was being redeemed for handfuls of ground up silver and coins.
AI remember it, and, yes I was alive then, you did need silver certificates to redeem them.
BHNC #203
The first batch of Federal Reserve Notes were issued in 1963. Between then and the Coinage Act of 1965, I believe you could have gone to a bank, asked for silver dollars and paid for them with the new Federal Reserve Notes. As Cladking above mentioned, after the Coinage Act of 1965, you needed silver certificates to get silver coins of any denomination. This ended I believe in the summer of 1968, when silver certificates could not longer be exchanged for silver coins.
As a practical matter, only coin collectors wanted to have anything to do with silver dollars at the time. The coin was too big and bulky to be used in everyday commerce.
"Seu cabra da peste,
"Sou Mangueira......."
An excellent and very practical question.
The legal basis will be found in the “Silver Purchase Act of 1934,” sections 4 and 5. Here’s a brief extract:
“There shall be maintained in the Treasury as security for all silver certificates heretofore or hereafter issued and at the time outstanding an amount of silver in bullion and standard silver dollars of a monetary value equal to certificates to be the face amount of such silver certificates. All silver certificates heretofore or hereafter issued shall be legal tender for all debts, public and private, public charges, taxes, duties, and dues, and shall be redeemable on demand at the Treasury of the United States in standard silver dollars….”
Also note this from “Historical U.S. Currency” (p.14), Federal Reserve Bank of St. Louis:
“Silver certificates were secured when issued by standard silver dollars and silver
bullion held by the Treasury at the monetary value of $l.29+ per fine troy ounce. The
Treasury ceased issuing silver certificates in mid-1966. Silver certificates issued on or after
July 1, 1929, were redeemable in silver prior to June 24, 1968; after that date, certificates
were not redeemable at the Treasury for silver. Today, they are redeemed from the general fund of the Treasury and are retired on redemption (United States Code, Title 31, Section 5119).”
The effect of the 1934 act was that silver dollars were no longer required as 1:1 backing for silver certificates. The Treasury could use any available silver, which meant that any part of the huge reserve of silver bullion could be earmarked for backing as if it were coined at $1.29+ per ounce.
This made all paper currency equivalent, except when holders wanted to redeem it. Those with silver certificates could demand payment in metal rather than Federal Reserve Notes or checks. Thus, during the silver dollar “rush” any form of legal tender, including bank transfers of Federal funds could be used to pay for silver dollar coins, or any other U.S. coins.
October 1964, Halloween, my neighbor was a woman who was some sort of an executive at a local bank in New York, just outside NYC. She was giving away silver dollars instead of Candy. I traded my younger brother and sister some candy for their silver dollars (mom made me give them back). I asked her about those silver dollars, and she told me they had gotten a few bags of them at the bank, someone had ordered them, never picked them up, and they were tired of having them around, so she "bought" a bunch of them, and gave them out at Halloween.
my neighbor was a woman who was some sort of an executive at a local bank in New York, just outside NYC. She was giving away silver dollars instead of Candy.
Once the word got out, she'd have gone broke in no time in my neighborhood.
I knew it would happen.
My Grandma DeLorey had about 30 grandchildren. Rather than Christmas shop for each one of us, she just got a bunch of silver dollars at her bank and gave us one each when we came over on Christmas afternoon for dinner. I of course immediately spent mine the next day at the corner candy store.
My Grandmother did the same to each of her three grandchildren. I saved mine and it eventually merged into my little coin collection. I remember that she had rubbed it shiny so it looked nice....
But -- her gingerbread baked in a wood stove was incomparable, and such Grannys get a pass or anything!
I've heard stories where dealers would use a cigarette to burn a small hole in the bag to see what date was inside without having to open the bag. Good way to keep a bag intact.
True story...my mother and father would by a bag or two at a time...AND CARRY THEM HOME FROM THE MANHATTAN FED BANK ON THE SUBWAY!!!
Times were abit different back then.
Dad would then dump them on the kitchen table...fill his blue Whitman folders with one of two of the best date and mintmark examples and then return the rest to the Fed.
Are you sure about the $10? I was always given a $20 bill in the late 1950's for a weekend date.
As a pre-teen, I spent my silver dollars for plastic models at the local hobby shop. When my mom figured out I was getting money from somewhere she took the dollars away. I had 4 circulated (dates?) CC's and told her they were to be kept separate. I did not see the dollars again for years. The CC's were gone. Probably hidden so good I couldn't find them.
My uncle would send us a coffee can of Cents (1 pound coffee can) and there would be 3 silver dollars (3 kids) so we each got 1 silver and 1 / 3rd of the cents. This was circa 1963 and went on for a few years. I was the only one who cared about dates on the coins.
Small size Federal Reserve Notes went up to $10,000, but the small size Silver Certificates only went up to $10's. Large Size SC's went up high.
I missed all the fun .. was in the Navy and then after discharge, a young, struggling parent .... sure wish I could have participated in the silver game then... Cheers, RickO
How would they know that they had a different date? You could have gotten 20 bags of the exact same date right?
Must have been quite the folder of dollars if they only kept the best out of thousands?
Great post and responses!