Copper-nickel clad coins have been with us for 45 years now, and are so familiar that many collectors do not remember the circumstances that led to the exit of silver in our coinage. The end of silver coins actually began years before the first clad quarter entered circulation.

Throughout the 1950s and early 1960s, the demand for silver in industry rose, while silver production increased only slightly, not enough to keep up with demand. In less than three years – from April 1959 to November 1961 – the Treasury’s supply of silver dwindled from 222 million ounces to 22 million ounces. That figure did not include the silver held as backing for Silver Certificates.

It soon became obvious that the best way to overcome this problem of silver supply would be to remove silver from circulating coinage.

Back in 1963, the Treasury Department began to study alternatives to the 90 percent silver coin metal. The Battelle Memorial Institute of Columbus, Ohio, was asked to make a study of coinage materials and make their own suggestion for a new coinage metal.

During this time, a shortage of coins in circulation became apparent, probably due to the increasing use of vending machines. The machines were not emptied of the accumulated coins often enough, leaving massive amounts of coins in the machines for weeks, instead of circulating. Some Treasury officials actually blamed coin collectors for the shortage.

Senator Lee Metcalf of Montana introduced a bill to eliminate dates and mintmarks on coins in May 1964. He claimed that coin collectors took too many coins out of circulation for dates and mintmarks.

Kathryn O’Hay Granahan, Treasurer of the United States, also stated, “There are too many coin collectors for the comfort of the U.S. Treasury.” Dates on coins did continue, although a date freeze went into effect, thus keeping the date 1964 on all coins minted until the shortage was alleviated. This was the first time a date freeze had been used on U.S. coins since the Philadelphia Mint began operations in 1792.

A shrinking silver supply, a shortage of small change and large numbers of coins sitting in vending machines added up to a major change forthcoming.

Coin collectors were quite upset by the implication that they were to blame for the coin shortage and wrote letters to congressmen, along with many letters of protest to coin publications. Some writers cited speculators and not true collectors as the problem. One company of the time offered up to three tons of silver dollars for sale. One collector wrote, “We hold out one hand for commemorative coins, while the other hand holds a bag of Kennedy halves.”

Eva Adams, director of the Mint, blamed a “coin craze” for causing the shortage. She appealed to “true and honest” collectors to get coins out into circulation, instead of hoarding bags and rolls of coins. Collecting coins by the roll was popular at this time. Collectors claimed that the number of coins held by the bag and roll were only a drop in the bucket, compared to the vast amounts of coins left sitting too long in vending machines.

Renowned numismatist Walter Breen blamed the vending machine business for the coin shortage, and also mentioned coins used in laundromats, phone booths, toll booths, and public transportation. He called the blaming of coin collectors for the coin shortage “a triumph of stupidity.” Margo Russell, editor of Coin World, testified at the Senate Banking Committee, defending the coin collector, and urging the committee not to institute a date freeze.

All for naught. The date freeze bill was signed into law by President Lyndon B. Johnson on Sept. 3, 1964. Five days later, the Treasury Department announced that coins minted after Jan. 1, 1965, would be dated 1964.

Despite the coin shortage, the silver debate and the date freeze, the old-fashioned silver dollar was about to make a comeback. President Johnson signed the bill for production of 45 million silver dollars on Aug. 3, 1964. The Peace dollar design, last used in 1935, would be used on the 1964 dollars; the coins would be minted at Denver and bear the “D” mintmark. Tom Wass, president of International Numismatics Corporation, said the idea of minting silver dollars was “ridiculous,” and added, “everyone’s crying about the silver shortage, and now the government’s throwing away $45 million on silver dollars nobody needs.”

On May 15, 1965, President Johnson announced that production of 1964-D silver dollars would begin. Mintage stopped 10 days later, amid a flurry of criticism, even as speculators were already offering $7.50 apiece for the coins. Reportedly, all of the 1964-D silver dollars were melted, although rumors persist that a few escaped the melting pot. Too bad no one thought of preserving one or two specimens for display at the Smithsonian Institution as visible reminders of a turbulent time in the nation’s coinage history.

Meantime, discussions of new coin metal began in earnest. Nickel was mentioned as a good substitute for silver by Dr. Vladimir Clain-Stefanelli, curator of numismatics at the Smithsonian. He said a new coin alloy must meet five characteristics: 1. good public image, 2. good wear characteristics, 3. ease of production, 4. use in vending machines, 5. cost and availability of the material. Nickel was also mentioned by other numismatic authorities.

But U.S. News and World Report wondered if people would hoard silver coins if and when the new metal was introduced. Many people remembered Gresham’s Law: bad money drives out the good.

Amid all this discussion, coin collectors had something else to think about – whether or not they would still have their hobby.

On May 21, 1965, Sen. Alan Bible, D-Nevada, introduced a bill that would have outlawed coin collecting. The bill cited the export, selling or purchase of coins as activities that would be made illegal with the passage of this bill. “Bona fide collectors’ items” would be exempt from this.

The Treasury Department would publish a list of coins they considered numismatically desirable, and thus, legal to hold. Collectors of modern coins, or those who saved one date and mintmark of each series, disliked this bill, as they would not be allowed to hold such common coins as Franklin or Kennedy half dollars, Roosevelt dimes, and nearly all Jefferson nickels. Technically, it would also be unlawful for a child to own a piggy bank, as it would be an accumulation in excess of what was needed for personal use. Exporting of coins would also be illegal, so a dealer in the United States could not fulfill orders to a collector in Canada, or Great Britain, or any other foreign country.

A group of 100 collectors and dealers formed the United Coin Collectors Alliance in June, with its purpose being to defeat the Bible bill. Chet Krause, publisher of Numismatic News, served as the group’s executive director of communications, and urged coin hobbyists to do whatever they could to prevent passage of the Bible bill.

At this time, samples of a silver “sandwich” coin were shown to members of the Western Governing Mining Advisory Council by Henry Day of Nevada. The coin featured two layers of silver bound to a copper core. These samples appeared just as the Treasury released its findings in a long study of coin metals.

The staff study of silver and coinage had conducted research for two years and issued their report in May 1965. This study included an exploration of different metals for use in coins, its suitability for coinage, wear characteristics, use in vending machines and the ease of adapting to circulating coinage. Cost, of course, was also considered.

In an independent study, the Battelle Memorial Institute recommended a clad coin, with layers of copper-nickel bound to a copper core. Such a coin could be used in vending machines along with the older silver coins. Copper nickel was also desirable as a new coin alloy since five-cent coins were already made of this material and accepted in vending machines.

The Bureau of the Mint struck a number of experimental pieces in the different metals and alloys considered for the new coinage. The design depicted Martha Washington and the date 1759 on the obverse, with Mount Vernon on the reverse. Mintage figures are not known with any certainty, along with numbers of how many of these patterns struck in different metals were destroyed. Six specimens each of the dime, quarter and half dollar are known, embedded in Lucite and now housed at the Smithsonian. Perhaps two specimens each of the three denominations are in private hands, along with a half dollar pattern struck on a quarter planchet. One of the quarter patterns was recently offered at an auction and went unsold.

Other experimental pieces were struck by the DuPont Company and the General Numismatics Corporation, the forerunner to the FranklinMint.

After the findings were announced, President Johnson asked Congress to eliminate silver from the dime and quarter and reduce the silver content of the half dollar to 40 percent, just as the Treasury had recommended in its report. The non-silver coins would be struck in the copper-nickel clad material recommended by Battelle. The coinage of 90 percent silver coins would continue until the secretary of the Treasury decided that the coin shortage was over; these coins would still bear the date 1964. The San Francisco Mint would also be reactivated as a minting facility; the current work there stopped just short of coin mintage.

The Coinage Act of 1965 became law on July 23, 1965. Mintage of the new clad coins commenced exactly a month later, on Aug. 23, with the quarter struck first. Coinage of the old silver coins continued, which led to the creation of a few error coins, struck in off-metal. A number of these have turned up in circulation over the years; there may be more to be discovered.

During the week of Nov. 1, 1965, the Federal Reserve scheduled the distribution of the new clad quarters. The Treasury Department issued an eight-page fact sheet on the new coins. This writer once owned a letter dated Nov. 1, 1965, addressed to an employee of the Continental Bank of Chicago, Ill., with information on the new quarter, along with a sample coin attached to the letter.

The new clad coins were darker in color than the silver coins, and had the copper core, “the ham in the sandwich” as Coins magazine called it. Clad coins weighed a bit less than silver coins, and the coin made a different sound when dropped.

Copper-nickel clad coins did their job, and accomplished this job quickly. One month after release, it appeared that the coins were circulating and worked well in vending machines. The Christmas holiday season had arrived, with much buying and spending, so the new coinage was successful, if not pretty.

The last 90 percent silver quarters were struck in January 1966, the last silver dimes in February of that year, and half dollars in April 1966. The change to normal dating began on Dec. 29, 1965, when the dates on cents and nickels were changed to 1965. The date 1965 was used until July 31, 1966, when the date was changed to the current one, with normal dating resumed on Jan. 1, 1967.

After all these years, and study of detailed coin characteristics, no one has ever determined how to tell where a coin was minted with the dates 1965, 1966, or 1967, when mintmarks were not used. Record numbers of coins were made at all three mints, while production dropped off in 1968 and 1969, after the coin shortage had ended.

Forty-five years after being minted, quarters and dimes dated 1965 still show up in change with regularity. The coins look good after 45 years of circulation. I have never seen a clad quarter with the rim worn down into the lettering, as I have seen on many circulated silver quarters, let alone any with the date worn off, or large portions of the design worn smooth. Clad coins were unpopular for many years, and not readily adopted by collectors, but the coins have accomplished the job they were created to do.

Collectors, however, did not all greet the change with open arms. Many numismatists felt that their collections would end with the last of the silver coins, and many folders and albums ended with the 1964-dated coins. Perhaps the coins circulated freely, but there were no mintmarks and no proof sets. And the new copper-nickel clad coins, with the copper core, were not as attractive as the old silver coins.

What was a collector to do?

The is the first article in a series on clad coinage.

More Resources:

• 2010 U.S. Coin Digest, The Complete Guide to Current Market Values, 8th ed.

• State Quarters Deluxe Folder By Warmans

• Standard Guide to Small-Size U.S. Paper Money, 1928 to Date

• Strike It Rich with Pocket Change, 2nd Edition