Canada Mints Last Silver Coins in 1968|
September 21, 2010
This article was originally printed in World Coin News.
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Editor’s Note: This is the first in a three-part series.
The Royal Canadian Mint first opened its doors for business in 1908, and two World Wars later, it appeared Canada could meet its own coinage needs admirably under less than ideal conditions. But while the days of London mint contracts were a thing of the past, there was one instance in recent memory when the stress of minting persuaded the RCM to seek outside assistance in its struggle to curb a severe coin shortage.
The Need for Change
By 1967, the United States was firmly entrenched in the production of copper-nickel clad coins. Such coins first appeared in the latter half of 1965 even while the U.S. mints were still churning out silver. They were part of a worldwide phenomenon, an unprecedented shift from silver to base metal coinage – from coins with high intrinsic value to fiat money. This was seen as the only feasible response to soaring silver prices and rampant hoarding, made only worse in 1967 when the U.S. government “no longer had to hold down the price of silver which jumped from $1.30 [US] to as much as $2.17 per ounce.”1
At first, Canadian mint officials did not feel it was as urgent as the U.S. to seek a far-reaching solution to their side of the coin shortage of the 1960s. There were several reasons for this. One was the simple fact that since 1920, Canadian silver coinage contained 10 percent less silver than their U.S. counterparts, or .800 fine.
Canada was, and still is, one of the top silver producing countries in the world, but all the same, the RCM had only to supply the needs of a country with about one-tenth the number of people as the US, and so could at least, in theory, cope with profit losses due to high silver prices.
But there was another reason as well. The Montreal Gazette reported in early 1965 that “officials believe the coin demand is caused by increasing popularity of vending machines, parking meters, retail sales taxes and likely for cookie-jar penny saving.”2 As a result, the Mint’s main response during the early 1960s was simply to keep up with demand by working long hours. But gradually, a more sinister picture emerged of speculators hoarding and smuggling great quantities of silver coins out of Canada and into the U.S. where it was permissible to melt them down for their precious metal content. Others brought them across the border to help alleviate the U.S. coin shortage. Such coins were especially welcomed in Spokane, Wash.3
Regardless of when the central causes of the shortage became clear, the Mint knew silver would have to be phased out of Canadian coinage eventually. A defining moment came in 1964 when Mint Master Norval Alexander Parker visited the U.S. Mint and “found that tests for a replacement for silver were being conducted, and that the United States expected to make the transition very soon.”4
The question of alloy change became more concrete when a government committee was formed in 1966 to formally discuss the issue. Copper-nickel was one possibility, but the panel quickly agreed that pure nickel would suit the country’s needs the best, “on the basis of appearance, availability, distinctiveness from U.S. coins and compatibility with Mint techniques.”5
So far so good, although the Mint was slow to reach this point and was unprepared when the U.S. Treasury finally decided to remove the price ceiling of silver at $1.29 an ounce on July 14, 1967. This year marked the Centennial of the Canadian Confederation. Similar to the American Bicentennial several years later, the event was prodigiously celebrated on coinage, with the familiar reverse of each denomination replaced with an example of Canadian wildlife symbolizing different attributes.
The U.S. Treasury had already begun to restrict silver sales in May, and in abrupt response to this, the RCM debased the ten and 25-cent piece to 50 percent silver to create some semblance of profit until the new silverless coins could be introduced. Fifty-cent and dollar production were suspended in September for the rest of the year.
Now the pressure was on to make the transition to nickel coinage as soon as possible. But there was one serious hitch. The Montreal Gazette reported in March of the following year that “the mint would have made its switch to nickel by now except for the difficulties in converting apparatus of the multimillion dollar vending industry.”6
This may partly explain why, according to Robert Willey in a 1978 Canadian Numismatic Journal editorial, “the mint began to strike nickel in January 1968 for the replacement of silver, but it was not until August that any could be legally released. Interim, as the summer wore on, it became impossible to change a dollar after banking hours in the cities.”7
And there were other problems as well. As was done with silver, the RCM had tried to melt, cast, and roll their own nickel metal in preparation for making coin planchets, but came to the “final conclusion” in 1968 that it was not economical with their equipment. They resorted to obtaining blanks and strip from outside sources as had been done previously for the nickel 5-cent piece, first introduced in 1922.
Before the Aug. 1 launch date of the new nickel coins, production of .500 fine silver 10-cent and 25-cent coins continued, having returned to the pre-1967 designs. But somewhere along the line, fears were raised that the mint would be unable to produce enough silverless coins to meet demand. Of the shortage, the Mint Master stated on June 18, “I can’t say the situation has improved. And I see no let-up.”8 With the mass hoarding of silver coins still in full swing, a drastic decision was reached.
1Haxby, James A. Striking Impressions: The Royal Canadian Mint and Canadian Coinage. Ottawa, ON: The Mint, 1984, p 219.
2“Coin Production Sharply Higher.” Montreal Gazette (Jan. 5, 1965), p. 21.
3“More Expected: Canadian Coins Ease Shortage for Region.” Spokane Daily Chronicle (Aug. 28, 1965), p. 1.
4Haxby, p. 219.
6“Silver Coin Scarcity Result of Hoarding.” Montreal Gazette (Mar. 28, 1968), p. 29.
7Willey, Robert C. “Rockets and Thunderbolts.” Editorial. CNJ (June 1978), p. 224. Yvon Marquis indicated to the author that he felt Willey’s last remark was “a bit exaggerated.”
8“Silver coin shortages to continue.” Montreal Gazette (Jun. 19, 1968), p. 23.
(This series will be continued in the November issue.)
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