The Silver Crisis of the 1960s
By the early 1960s, the U.S. faced a growing problem: the market price of silver was rising toward the point where the metal in coins was worth more than the coins' face value. This created incentives to hoard or melt circulating silver coins.
The U.S. Treasury's silver reserves, which backed the silver content in coinage, were being depleted rapidly. Something had to change to maintain a functioning coinage system.
This economic pressure led to the fundamental changes in how Americans invested in silver and how the U.S. Mint approached coinage materials.
The Coinage Act of 1965
President Lyndon B. Johnson signed the Coinage Act of 1965 on July 23, 1965, implementing dramatic changes to U.S. coinage composition.
Dimes and quarters lost their silver entirely, switching to copper-nickel clad construction. Dollar coins (already rare in circulation) were not addressed. But half dollars received a compromise: silver content reduced from 90% to 40%.
According to the legislation's congressional record, the half dollar retained some silver partly because the Kennedy half dollar, introduced just months after President Kennedy's assassination, had tremendous public popularity.
The 1965-1970 Transition Era
Kennedy half dollars minted from 1965 through 1970 used the 40% silver clad composition. This five-year period represents the transition from silver coinage to fully base-metal circulation coins.
During this period, the coins circulated normally, though many were also saved by the public. Kennedy halves have always been popular with collectors and the general public due to their connection to President Kennedy.
The 40% composition used an outer layer of 80% silver and 20% copper bonded to a core of 21% silver and 79% copper. This clad construction was a new approach for U.S. coinage.
End of Circulating Silver
By 1970, even 40% silver had become economically unsustainable for circulating coinage. Starting in 1971, Kennedy half dollars switched to the same copper-nickel clad composition used for dimes and quarters.
The 1965-1970 40% Kennedy halves thus represent the final chapter of silver in U.S. circulating coinage. Today, these coins trade primarily for their silver content as "junk silver," though some dates and mint marks retain modest numismatic premiums.
Understanding this history adds context to 40% silver ownership. These coins are tangible artifacts of a significant transition in American monetary history.