from Silver Doctors:
The difference is in the name you prefer to use.
Some people don’t like the word “junk”, even though it doesn’t mean it’s trash, and some people like to use the word Constitutional, because the US Constitution lays out the requirement for a bi-metallic gold and silver standard.
But no matter which names you prefer, it all identifies the same silver coinage in general.
That said, it wasn’t until the Coinage Act of April 2, 1792 when the congress defined those weights and measures in exact figures.
Most people don’t realize this, but the original definition of one dollar (as in $1.00 USD) is actually a specific weight and purity of silver.
Here it is straight from the 1792 Coinage Act:
Dollars or the same is now current, and to contain three hundred and seventy-one grains and four sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver, Half Dollars—each to be of half the value of the dollar or unit, and to contain one hundred and eighty-five grains and ten sixteenth parts of a grain of pure, or two hundred and eights of a grain of standard silver. Quarter Dollars—each to be of one fourth the value of the dollar or unit, and to contain ninety-two grains and thirteen sixteenth parts of a grain of pure, or one hundred and four grains of standard silver. Dismes—each to be of the value of one tenth of a dollar or unit, and to contain thirty seven grains and two sixteenth parts of a grain of pure, or forty one grains and three fifth parts of a grain of standard silver.
The fact that they are “weights and measures” is important. It’s a simple, divisible system of accountability, fraction based. That is to say $1.00 is a specific weight and purity of silver, and a half dollar ($.50) is half of that weight (with the same purity). A quarter dollar ($.25) is one quarter the weight (with the same purity) as one dollar. A dime ($.10) is one tenth the weight (with the same purity) as one dollar.
This is why a silver dollar is the largest, followed by the half dollar, followed by the quarter, and finally ending with the smallest unit of measure – the dime.
Now, since our money was weight and precious metal purity based, this means that a half dollar has the same silver content as two quarters. Likewise, ten dimes have the same silver content as two quarters.
One of the best free websites to track Constitutional Silver Coin melt values is called Coinflation.com, below is a screenshot from their silver coin value page where you can track live silver melt values of older junk silver coins.
The United States has used silver coinage for most of its history.
That is to say, what is normal is for the United States to have silver coinage.
What is not normal is to be using these mostly zinc or cupronickel coins whose melt values are way lower than their legal tender face values.
Have a look how little your pocket change is truly worth in metal value alone.
Why buy Junk Silver?
Constitutional silver coins are some of the most sought after silver there is, and one of the coolest ways to begin investing in silver.
The year 1964, was the last year the US minted circulating 90% silver coins in mass. This means there is a limited fixed supply.
All of the US 90% silver coins that have ever been produced, have been produced. Most of them have likely been melted by now into other silver products, gone forever.
Junk silver coins are sought after for their silver content, and they have collector’s appeal as they are truly a part of history in your hands.
There are many different designs on the coins too. There are a number of variety of eagles, and obverses.
For example, the American Silver Eagle bullion coin of today is basically a rendition of the obverse of the Walking Liberty Half Dollar. There is also the Ben Franklin obverse of the half dollar.
There is the 1964 JFK half dollar (the only year the JFK half dollar was minted in 90% silver). Those are the most common half dollar because they are the least vintage. There are also Seated Liberty half dollars, Barber half dollars, and so on. The older the design, the more expensive – generally speaking.
For the most part, unless you are buying a graded coin or a roll in brilliant uncirculated condition, when a silver investor is buying junk silver, they are buying circulated coins.
In other words, 90% US silver coins that were actually used in day to day transactions way back when. This means that the coins have been used by the general population before finding their way out of circulation.
Therefore, when buying circulated 90% silver coins, some will look very pretty, and some will look very rough, and it will mostly be all in between. Most circulated 90% silver coins have worn over time and use. Their exact silver weight may be slightly diminished with wear on the coin (minute silver flecks have fallen off with wear and tear). That said, every $1 of face value of 90% silver coinage typically contains .715 troy ounces of silver.
Does that mean that if an investor buys a $100 face value bag of 90% silver that it will weigh exactly 71.5 troy ounces of silver?
No, and it has to do with the circulated condition of the coins, so it might contain 71.4 troy ounces again due to this aforementioned wear-n-tear.
That said, most silver investors are not looking for the exact weight, but they are looking for the face value, understanding there is a slight variation in weights due to the wear on any given lot of 90% silver coins.
What if a silver investor gets coins that have been completely worn smooth, with holes drilled in them, with them being clipped, or something else that would seriously diminish the weight?
Those would not be sold as circulated coins.
Those types of severely damaged coins are sold just like that – they are sometimes called “cull”, “severely damaged”, “no dates readable”, “Excessive wear”, and terms like that.
In other words, let’s assume an investor buys a $10 roll of circulated, pre-1965 Washington quarters. It is safe to say that those will neither be in brilliant uncirculated condition, because those would have been pulled out, but that roll of quarters will also not contain clipped, drilled, or cull coins, because those would have been pulled out too.
Average circulated means just that – pocket change that has been used.
One more note about the whole collector’s/historic value of Constitutional silver coins.
Recall the statement that all of the coins that have ever been minted have been minted.
Dwindling Junk Silver Coin Supplies
Much of the silver coinage was melted down in the 1979 and 1980 period when silver spiked in price to near $50 oz. Some experts estimate that 98% of all junk silver coins were in line to be melted down during those spiking silver price periods around the 1980 silver price spike. This means that 90% coins are even more scarce because of having been melted down over the decades since their final production.
And that was not just something that happened in 1980 either. Earlier this year (2018) Silver Doctors broke a junk silver coin story on renewed melting down of 90% silver coins again due to lacking demand.
Although many people think it is illegal to melt 90% silver coinage, it is not. What is illegal is to melt down pennies and nickels, but not the 90% silver coins from 1964 and prior.
You can read about this directly on the US Mint’s website.
So while it is true to say that from a historical perspective, all that has ever been minted is out there already. Much of the 90% silver coins which have been minted have been melted down and cast into .999 silver bars or shot for use in industrial or modern day silver bullion applications.
All the US 90% junk silver coins that have ever been minted is all there will ever be, and because of the melting down of these 90% silver coins from the late 1970s into the future, said 90% silver coins will become even more scarce.
Why else are Silver Investors drawn to Junk Silver Coins?
The short answer: The premiums vs their historic value.