Casinos Mutilated Silver Dollars to Combat Shortage
What a craven act – the ruin of collectible silver dollars, Morgan or Peace, it was of no matter – all to keep Nevada’s gambling machines satiated. Collectors be damned. But that’s exactly what casinos in Nevada were doing in the mid1960s when a coinage shortage and, in particular, a silver dollar shortfall threatened their businesses.
“The gambling casinos of Nevada, long the last stronghold of the vanishing American – otherwise known as the silver dollar – are in real trouble, partner,” reported the September 1964 issue of Coins magazine. “They’re running out of silver dollars for their one- armed banditti and their tables.
“This may seem like a joke to many readers, but it isn’t very funny to casino operators who have depended on the cartwheels as a firm and romantic fixture in a multi-million dollar business. “Not long ago the Treasury Department had millions of the things stuffed back in their vaults – enough to last for decades of normal use. But the recent rush on silver dollars was anything but normal and the casinos have felt it first. Many of them have had to turn their slots’ faces to the walls – no coins to put into them. Most casinos now refuse to give dollars in change unless they are mighty sure the person asking for change is playing the machines – returning all the coins.
“‘The scarcity of dollars is obviously the work of collectors and speculators,’ reasoned the casino operators. ‘Let’s fix the dollars so nobody will want to collect them.’
“And fix them they did. In several ways. Some have holes drilled in them, some show up punched with identifying marks. Others, after even more brutal treatment, are appearing with their dates ground away.
“All of these approaches to the problem are highly effective, although probably all are just as illegal. The law states that simple mutilation is not enough. It has to be mutilation with intent to change the value of the coin – and this includes collector value as well as face value, according to a recent Treasury Department ruling. There is no doubt that a 1903 silver dollar without a date is considerably less valuable to a collector than it is with a date, besides containing somewhat less silver than it must to pass as United States coinage.
“The West is keeping its fingers crossed for the bill now before Congress which would allow the striking of silver dollars in 1965. This would help alleviate the problem – but, according to most qualified observers, the bill has about as much chance of survival as a snowball in Death Valley.
“Maybe, after all this time, the gambling casinos will have to join the rest of the world and use a token ‘coinage’ for their operations.”
This would happen at at least one Wisconsin bank when it fought off the ill effects of a nationwide coinage shortage and turned to wooden nickels.
“There’s been and there still is a tremendous coin shortage,” Coins reported in the same issue, as part of its “News and Comments” column. “The Mints can’t begin to catch up, to say nothing of keeping up with the demand.
“In some parts of the country the shortage is so severe that banks have been forced to purchase coins from coin dealers and from ‘coin brokers’ in order to carry on their business. And, of course, nobody in his right mind is going to sell a bank a bag of coins at face. After all, the banks charge a fee for their services. Why not make them pay?
“A Wisconsin bank issued wooden nickels as its answer to the shortage. And the Secret Service moved in quickly, though thanks to the national press not very quietly, and picked them up – all they could get their hands on.”
According to newspapers of the time, the wooden nickels, issued by the First National Bank of Monroe, Wis., to quell the coinage shortage, went up in value after the Feds moved in and stopped the operation.
The Rockford (Ill.) Morning Star for June 2, 1964, adorned by a photo of Monroe bank president Edward M. Adams with stacks of wooden nickels on the desk before him, reported that there was now heavy demand for the woods, with some paying up to $11 for the “coins.”
“A Chicago-headquartered grocery chain,” Coins continued, “threatened to issue and actually went into production of paper currency designed to help shoppers not only in the chain’s own stores, but to be passed current in other establishments as well. The Secret Service quickly made their displeasure known and this helpful notion was squashed.”
Help was on the way, Coins wrote, quoting from a Treasury Department press release reproduced in the “News and Comments’’ column, titled “Treasury to Double Coin Production.”
“The Treasury today announced an intensive program to double the nation’s current rate of coin production within a year and raise it by 75 percent during the next six months.
“By next June, the program will boost our coin production to an annual rate of over 9 billion new coins – more than double the 4.3 billion level for fiscal 1964 and triple the 3 billion level for fiscal 1961. For the last six months of this year – normally a time of peak demand for coins – the program will mean a 75 percent increase in coin production over the same period last year, a rise
to 3.5 billion new coins from the 2 billion produced in the last half of 1963.
“This increased production will be distributed among the present 5 denominations of coins in about the present ratios – roughly two-thirds pennies, one-fourth nickels and dimes, and the rest quarters and half-dollars. “The new program will augment the Treasury’s already heightened efforts to expand the nation’s coin production in the face of a growing need for coins. “Steps already taken to expand current production of coins include the purchase of rolled nickel strip for the making of all fivecent coins – thus freeing up equipment for other production – and the inauguration of a continuous 7-day, 24-hour production schedule at the nation’s two Mints, in Philadelphia and Denver. “These actions will increase production for the coming fiscal year by 600 million coins, bringing total budgeted production up to some 5 billion coins.
“To augment these measures, the following new steps will be taken: 1. Beginning early in July, bronze strip for pennies will be purchased (in addition to the nickel strip already being acquired for five-cent coins), thus freeing all melting, casting and rolling operations for the production of more silver coins. 2. New coin presses (used for imprinting the design of the coin) are being ordered for delivery early this Fall and additional stamping machines, which can be converted for Mint use, are being acquired from the surplus stocks of the Department of Defense, the General Services Administration, and private industry. 3. In December, when current orders have been filled, the proof coin operation (the production of special sets of coins for collectors) will be suspended. Those of its presse[s] that are suitable will be converted to allow higher speeds and will be devoted to the production of coins for circulation. 4. As additional presses become available, production of annealed blanks (round pieces of metal the actual size of the coin softened to take the die) for nickels and pennies will be temporarily shipped to the U.S. Assay Office in San Francisco, thus permitting the Mints to concentrate on the final stages of the production of all coins. 5. The Congress will be asked to continue the 1964 date on all coins indefinitely, thus eliminating any possible incentives for keeping 1964 coins out of circulation for speculative purposes.”
Coins magazine’s editor was skeptical of some of Treasury suggestions, including the propriety of keeping the same date on all coins indefinitely. “Will the Treasury actually do the things they mention in their bulletin? Or are they just making threats, trying to scare people to loosen their grip on the coins they have in their attics? Let’s look at a couple of them.
“In the case of the Kennedy half dollar, look back to just before his untimely death. The half dollar was an unwanted, unused coin. Most of our cash registers didn’t even have a compartment for them. “Keeping 1964 on Kennedy half dollars will help. But what would help even more would be the cessation of production of an unwanted coin so the machinery could be used for needed smaller change. “The benefit of keeping the same date on smaller change is questionable. And the thought of Congress taking such action is almost unthinkable. That’s one we’ll have to see to believe.
“How about manufacturing planchets in San Francisco? It’s a natural. The plant remains, the staff is there. Additional machinery will be brought in from outside the Treasury and this will help. “What about the discontinuance of proof set production at the Philadelphia Mint? First, consider that it will mean a revenue loss to the government. The face value of a proof set is $.91. It sells for $2.10. This alone represents a $1.19 profit. But remember, the coins in a proof set are token coins. Their intrinsic value in metal is nowhere near their face value. So you can subtract another big chunk from the value represented on the face of the coins. “But this profit would be overshadowed by the impelling need to double production next year. So the disappearance of the proof set, at least for the next year, is just one of the disappointments we are apparently going to have to live with.
“Still another enigma is the Treasury Department’s apparent desire to strike a silver dollar in 1965. The bill is before the House after having been okayed by a Senate committee. But it’s unbelievable that dollars will be minted. The only function this would serve would be to further slow down production of needed coinage.
“At these early stages in the coin shortage solution planning, nothing is very definite. Except – coin collecting will go on! Not as though nothing happened, but strongly and with some changes.”