Have you heard coin dealers talk about buying silver coins in terms of face value?
For example, at a coin show, Dealer George has a customer at his table who inherited a pocket change collection of circulated silver Roosevelt dimes, silver Washington quarters and silver Franklin halves. First, Dealer George looks through the coins for numismatic value coinage. (Remember, a lot of the fun in coin collecting is looking for unexpected treasures.)
Dealer George determines the coins do not have any numismatic rarities, but they are valuable for their silver bullion content. Generally at a show, Dealer George passes bullion buys to his buddy across the aisle, Dealer Jonathan.
Dealer George calls, “Hey Jonny, what’re you paying for silver today?”
Dealer Jonathan replies, “I’m paying twelve and a half times face.”
Wait, people buy silver bullion on the open market based on price per troy ounce. How can Dealer Jonathan arrive at a price based on face value, especially when the coins are mixed between dimes, quarters and half dollars?
First, let’s examine the size of the various coins and their silver content.
For 1892 through 1964, the last year for silver circulating coinage, the US Mint consistently used the same weight for each of the coins by denomination. Furthermore, the Mint used the same silver content, 90%, for those years.
Using simple math, apply the 90% to the weight in grams to identify the amount of silver grams in the coin. Then, multiply by the factor (0.032150756) to translate grams into troy ounces, and multiply by the number of coins to make a dollar in face value.
| grams | % silver content |
grams of silver | troy oz (x 0.032150756) |
# coins | troy oz in $1.00 Face | |
| Dime | 2.50 | 90.00% | 2.250 | 0.072339201 | x 10 | 0.7234 |
| Quarter | 6.25 | 90.00% | 5.625 | 0.180848003 | x 4 | 0.7234 |
| Half | 12.50 | 90.00% | 11.250 | 0.361696005 | x 2 | 0.7234 |
Interesting, whether dimes, quarters or halves; the silver content in one dollar of face value is the same at 0.7234 troy ounce.
Though, if you look at coinage earlier than 1892, the silver content varies from .7199 to .7747 troy ounce in one dollar face. However, those older coins, in all likelihood, have a greater numismatic value than just their silver content.
Plus, you will note that we did not include dollars in our example. The Morgan and Peace dollars from 1878 through 1935 have .7735 troy ounce of silver. But, again, those coins, in good condition, would most likely have a greater numismatic value than their melt value.
Now, back to the question, how does Dealer Jonathan determine the silver bullion rate per a dollar of face value?
For example purposes only, let’s say the current price on the open market is $18.20 per troy ounce of silver. Next, let’s assume Dealer Jonathan works with a 5% profit margin for bullion.
Therefore, Dealer Jonathan is paying $18.20 times .95 or $17.29 per troy ounce. But, in one dollar of face, there is 0.7234 troy ounce. That leads us to $17.29 multiplied by .7234 or $12.50 per one dollar of face.
Of course, the math does not take into consideration any wear on the coins, and old silver coins did wear and lose metal meaning less weight. Plus, dealers will not use a conversion factor to nine decimal places.
Perhaps most important, some dealers operate with a much larger profit margin.
But, now you know how to arrive at a silver value per dollar of face value of circulated coins. You can use a little math and the current spot value of silver found on various web sites to estimate the value of your 1964 and older circulated and worn silver coins.
Oh, do remember, the value of silver can go up and down quite significantly. In other words, a rate at 10:00 am could be very different than a rate at 2:00 pm, and if your rate was calculated a week or more ago, you will definitely want to renew your calculations.