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Good Information About Bags of 90% Silver Coins

Some people who are interested in silver bullion purchase $1,000FV (Face Value) bags of 90% United States silver coins. This is simply either 10,000 dimes (from 1964 or earlier), 4,000 quarters (from 1964 or earlier), or 2,000 half dollars (from 1964 or earlier). Many dealers also sell half bags ($500FV), quarter bags ($250FV), $100 bags, and smaller amounts.

At a recent spot price of $14.58 (as of 04 Sep 2015 16:00), a $1,000 face value bag of 90% silver U.S. coins has a melt value of $ (based on 715 ounces pure silver per bag).

What are the advantages/disadvantages of $1000FV 90% silver over .999 pure bars?

Pros over .999 fine bars: Cons over .999 fine bars:

What is the real value of $1000FV 90% silver?

It is very hard to place a value on $1000FV bags of 90% silver coins. why? Because there are many variables. First is the denomination: Half dollars tend to be valued more highly than quarters or dimes, since they are usually less worn (and therefore have more silver), have smaller mintages, and are easier to count. Next comes the variety: Mercury dimes and Walking Liberty halves tend to have price premiums, since the coins are older (and may have more numismatic value) and easier to identify as being 90% silver (you don't have to check the dates, as you do with more recent 90% silver coins).

Regardless of the type of coin, the value of 90% silver coins compared to spot prices varies widely at times. Sometimes there are very high premiums (such as late 1999, just before Y2K, when people thought they would be useful for bartering if computer systems went down). At other times, such as the early-to-mid 1980s and shortly after Y2K, these bags would sell well below the spot price. In some cases, this was due to low demand, and in other cases (such as during the high prices of silver in early 1980), this was due to the lengthy delay to melt the coins into fine silver (and the risk of the price declining before that happened).

But, if you are just buying it for the silver content, what matters the most is how much silver the coins contain. A $1,000FV bag of 90% silver coins contains about 715 ounces of pure silver (plus about 80 ounces of copper).

What Coins Will I Get?

That depends. If you're getting a full $1,000 face value bag, most commonly you will get a bag of all dimes (10,000 of them) or all quarters (4,000 of them). Sometimes, you'll get a mix, but that isn't as common (people typically want all of the same denomination). Occasionally, you may get a bag of half dollars, but often you'll have to pay a premium for bags of half dollars.

Typically, for dimes, you will get Roosevelt dimes (the same type we have today), but occasionally will see some mercury dimes (or even more rarely, Barber dimes) mixed in. Some dealers will sell bags of just Mercury dimes at a premium (which is nice, as you don't have to check the dates of them to make sure they are pure silver, as post-1964 Roosevelt dimes are not made of silver). For quarters, you'll usually get Washington quarters with an occasional Barber quarter mixed in. Halves are typically mixed, with the majority being Franklin halves.

All About Weight

When first minted, $1,000FV of 90% silver weighs 803.76 troy ounces. Since it is 90% silver, that means that the coins contain 723.38 troy ounces of pure silver. A circulated bag contains roughly 715 ounces of pure silver.

Since silver is sold in troy ounces, we won't bother telling you the avoirdupois ounce weights (what it would be on a bathroom scale), or the weight in pounds. Do not trust anyone selling silver using avoirdupois ounces; no dealer will sell using avoirdupois ounces (it is illegal). The same holds true for people selling 'pounds' of silver (12 troy ounces or 16 avoirdupois ounces) -- silver is sold in troy ounces, not in pounds (this gets even more complicated, since a troy pound weighs less than an avoirdupois pound, whereas a troy ounce weighs more than an avoirdupois ounce).

Gresham's Law

Gresham's Law says that bad money drives out good money. Here, it means that as $1000FV bags of 90% silver coins change hands, new owners may take out the good coins (less worn coins, or those with numismatic value) while leaving the bad ones (more worn coins, without numismatic value). The reason is simple: these bags trade based on the face value of the coins, not the weight or based on numismatic value. You might get lucky and get a "good" bag. But as time goes on, the $1000FV bags weigh less and less.

If the price of silver climbs high enough, this will stop. It will likely happen when the price of silver becomes high enough that the 8% or so difference in value between "good" bags and "bad" (highly circulated) bags will become very significant. At $14/oz, a $1000FV bag containing the worst possible 90% silver coins costing about $10,000 will contain about $800 less silver than a bag containing "good" coins. If silver were to reach, say, $100/oz, then that same bag of the worst possible 90% silver coins would be short over $10,000 -- more than the original cost of the bag! I can guarantee you that if you brought the bag to a refiner, they would only pay you based on the weight (otherwise, they would be paying you for perhaps 715 ounces of silver when they would only be able to extract perhaps 665 ounces).

How much silver really is in that $1000FV bag?

One of the biggest questions is 'How much silver is really in there?'. This can get very confusing, because of troy vs. avoirdupois ounces, and circulation. In other words, while 90% U.S. silver coins are sold by face value, they shouldn't be.

A $1000FV bag of brand new, untouched coins would weigh 803.75 troy ounces, and at 90% silver, would therefore contain 723.38 ounces of pure silver. But those brand new ("brilliant uncirculated") coins all have high collector value, so you aren't going to get a bag containing the full 723.38 ounces of silver (unless you are very, very lucky!).

Most dealers assume that the bags weigh 715 ounces (so they do not have to weigh them all). Websites claim that $1000FV bags of circulated coins contain on average various amounts of silver. We've seen "approximately 715 ounces", "718-720 ounces" (for Walking Libery Halves), "the average amount of Silver per $1000 bag is a little over 710 ounces". But that just ain't always right. When you buy a $1000FV bag (or a lesser amount), you usually don't know what you are getting. Sometimes the seller will specify "dimes" or "quarters", and sometimes even the specific variety (such as Mercury dimes or Walking Liberty halves). But I haven't seen any dealers that specify the weight of the bags.

So how much silver is really in there? If you get a bag, you can weight it, convert the weight to troy ounces, and multiply by .9 to get the pure silver content (which will be as exact as your scale; wear of the coins should be exactly even between the silver and non-silver content). But that isn't always easy.

To test, we took 10 mercury dimes that were extremely worn (where you could no longer see the ridges on the edges of the coins), and weighed them. They should have weighed 25g total if new (2.50g each); they actually weighed in at 22.8g (2.28g each). This was on a scale accurate to .1g. Dividing 22.8 by 25.0 shows us that they now weigh 91.2% of their original weight. Multiplying 723.38 (the original pure silver content of a $1000FV bag of 90% pure coins) by 91.2% results in 659.7 ounces. The good news is that with the bag that we found those in, a random sample of 20 coins weighed 48.6g, or 2.43g each, or 97.2% of their original weight (or 703oz for a $1000FV bag). That's a bit lower than average, but not terrible.

We then tested some Walking Liberty halves, picking out 10 of the most well worn ones out of several hundred. These weighed 117.7g (11.77g each), compared to the 12.50g they should have weighed. That's 94.16% of the full weight, or almost 6% short of the original weight. That would be just 681.1 troy ounces for a $1000FV bag. The good news is that a random sample of 10 coins from that bag weighed 122.5g, or 12.25g each, just 2% short of the full weight when new, for 709oz for a full bag. And those coins looked pretty well worn (but most had the full rims).

Of course, Mercury dimes and Walking Liberty halves tend to be more well worn than newer coins. And since those older coins tend to carry a premium, it is unlikely that you would come across many of them without asking for them. So a bag you encounter would likely have a higher silver content than 700oz. A sample of 40 random Roosevelt dimes from a bag weighed 2.48g each, or over 99% of their original weight (or 717.6oz for a $1000FV bag). And a sample of 10 random Franklin Halves weighed in at 12.36g each, just under 99% of their original weight (or about 715.3 ounces).

So where does that leave us? It means that when you buy a $1000FV bag of coins, you'll probably get about the 715 ounces that are usually claimed -- but in some cases, it could contain as much as 50 fewer ounces than you might be led to believe (or possibly less, if the coins were worn worse than the ones we tested, but these were pretty bad, with the dates on some barely legible). At best, you could be lucky and get uncirculated coins at slightly over 723 ounces (about 1% more silver than you paid for).

TypeDenominationPercent of Original Silver Content
Well Worn Mercury Dimes$.1091.2%
Well Worn Walking Liberty:$.5094.2%
Random sample from Mercury Dime Bag$.1097.2%
Random sample from Walking Liberty Bag$.5098.0%
Industry standard assumption of a 715oz bagAny98.8%
Random sample from Franklin Halves$.5098.9%
Random sample from Roosevelt Bag$.1099.2%

Other Issues...

Also, it's important to note that unless you count the coins, you won't know for sure how many are in there. That isn't a problem if you go by weight (since 700 ounces of well worn coins has almost exactly the same amount of silver as 700 ounces of brand new coins). But if you don't go by weight, and don't count the coins, you have a chance of getting ripped off. A spot-check of a number of bags of silver coins from well-known dealers showed that while many were "honest counts", some weren't (by as much as $5FV, or .5%). That may be due to honest mistakes (in counting, or someone who previously owned the bag who saw a "good" coin and took it out, meaning to replace it).

Finally, you need to be sure that the dates are all 1964 or earlier. It's easy to tell with obsolete coinage, but 90% Roosevelt dimes, Washington quarters and Kennedy halves look and feel almost exactly like the coins with 0% silver (or 40%, in the case of some Kennedys). one bag that was spot-checked had a 2003 quarter in it (probably due to someone taking one of the old quarters and replacing it, not realizing that the old one was silver).

Where Does the 715 Ounce Figure Come From?

The 715 ounce average weight of $1,000 face value of silver comes from as far back as 1970 (see Kiplinger's Personal Finance May 1970, p.36).

Determining Melt Value

For a typical $1,000FV bag of 90% silver coins, you can multiply the current spot price by 715 to get the melt value (e.g. if spot is $10/ounce, the melt value would be $7,150). If the coins are all very well worn, you might need to weigh the bag first (remembering that a 'bathroom scale' uses avoirdupois pounds/ounces, which need to be converted into troy ounces).

When Did $1,000 bags Start?

They date back to at least the late 1960s. An article in Life magazine, from 02 May 1969, states "... [I] lug around thousand-dollar bags of quarters, which weigh about 50 pounds."

$1,000 face value bags of silver coins were trading on the New York Commodity Exchange back then, as well.

ConditionAvoirdupois Oz
(bathroom scale)
Troy OzTroy Oz Silver
BU, brand new876.90 (54.806 lbs)803.76723.38
What most claim866.7 (54.171 lbs)794.4715
Worst Case (?)799.7 (49.98 lbs)733659.7

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