Today I'd like to talk about the other junk silver - Canadian junk silver! This form of silver bullion has most of same advantages that U.S. junk silver has, but often gets ignored by the silver stacking community. I hope to do my part to correct this by shining a spotlight on this underappreciated silver bullion option.
A Short History of Canadian Silver Coinage
The Canadian Royal Mint started striking silver coins in 1858, when Canada was still a British colony. The initial denominations were the silver half dime (5 cents), dime (10 cents) and 20-cent piece. This lineup was amended in 1870, when the 20-cent piece was replaced with the quarter (25 cents) and the half dollar (50 cents) was added. All of these early Canadian silver coins were struck in 92.5% fine sterling silver, just like the silver coinage of Canada's parent country, Great Britain.
In the aftermath of World War I, both Great Britain and Canada debased their silver coinage due to the expense of the conflict. However, while Great Britain started issuing coinage in .500 fine silver, Canada only debased its silver coinage to .800 fine. So from 1920 until 1966, 80% purity was the standard alloy for Canadian silver coins. Purity further dropped to 50% briefly in 1967-1968 before switching over to 100% nickel in late 1968. I'll discuss the messy 1967-1968 end period for Canadian silver coinage later on in this article.
Canada further tweaked its silver coin denominations right after World War I. The tiny silver half dime was discontinued in 1921, leaving a coin lineup familiar to most people today: the dime, quarter and half dollar. Canadian silver dollars only came a little bit later, being first struck in 1935
The 80% fine coins minted between 1920 and 1966 represent the bulk of Canadian junk silver that the average silver stacker will encounter in the marketplace. Pre-1920 sterling Canadian coins generally aren't found in junk lots because of their higher purity and substantial numismatic value. So we'll only concern ourselves with the 20th-century, 80% purity Canadian junk silver in this analysis.
The Advantages of Buying Canadian Junk 80% Silver Coins
One of the biggest benefits to stacking Canadian junk silver coins is that their silver content is in easy to calculate round numbers. A Canadian silver dollar minted before 1968 contains 0.6 troy ounces of fine silver and a Canadian half dollar 0.3 troy ounces, while a Canadian quarter struck before 1967 has 0.15 troy ounces of fine silver and a Canadian dime 0.06 troy ounces. These amounts apply only to Canadian silver coinage that is 80% fine. Earlier sterling silver Canadian coins contain more silver, while later 50% fine coins have less silver.
This might seem like a really small detail, but for some stackers it is a nearly indispensable advantage. It makes calculating the exact amount of silver you have in your Canadian junk silver stack incredibly easy: just multiple the face value by 0.6. So for example, $20 in Canadian 80% silver coins would be 12 troy ounces fine silver. $8.25 would be 4.95 troy ounces. $55 face value would be 33 troy ounces. The 0.6 multiplier is easy to remember and, depending on your math skills, might not even require a calculator to figure out.
This is a lot better than U.S. 90% junk silver, where the ratios are always frustratingly difficult. Circulated U.S. junk silver is assumed to contain 0.715 troy ounces per $1 face value, which is not easy to remember or calculate. The ratio for very lightly circulated or uncirculated U.S. junk silver is even more unwieldy, with each $1 face value containing 0.7234 troy ounces. There is no figuring these numbers in your head unless you are dealing with a supremely round number, like $10 face value or $100 face value.
Of course the convenient 0.6 ratio for Canadian junk silver only applies to lightly circulated coins, but I'll address that later in this article.
Another major advantage with Canadian junk silver is that the idea of ever running into counterfeit examples is almost inconceivable. Much like the country it hails from, Canadian coinage flies underneath the radar. Because of this, the Chinese counterfeiting rings that churn out fake U.S. coins don't bother with Canadian coins - at least so far.
I should note, though, that it is also rather uncommon to find fake U.S. junk silver coins. The profit margins for fakers are simply too low. There is one notable exception to this rule of thumb, though. Morgan and Peace dollars seem to be the only U.S. junk silver coins that have enough popularity and numismatic value to spur the production of counterfeit common-date specimens.
So it could be argued that it is almost a wash between Canadian and U.S. junk silver concerning counterfeits, with Canadian silver coinage having just a slight edge.
But there is one area where Canadian junk silver wins hands down over U.S. junk silver. Canadian silver dollars are typically much, much cheaper than their U.S. counterparts when measured by their premium over melt value.
Vintage 80% Fine Canadian Silver Dollars for Sale on eBay
On bullion dealer APMEX's website a roll of 20 average circulated Morgan silver dollars was selling (as of November 2019, which was pre-COVID-19) for a jaw-droppingly high 90% premium over its melt value. A similar roll of Peace silver dollars was selling for a still hefty 37% premium over spot. But APMEX was willing to sell you a roll of 20 average circulated 80% fine Canadian silver dollars minted between 1958 and 1967 for only a 13.5% premium over melt.
As an added bonus, Canadian silver dollars in average circulated condition will usually be in much better shape than equivalent Morgan or Peace dollars. This is because U.S. silver dollars are older and circulated for a much longer period of time. U.S. Morgan and Peace silver dollar production ran from 1878 until 1935, when minting was discontinued due to the Great Depression. However, the Royal Canadian Mint only started striking silver dollars in 1935 (the same year they were dropped in the U.S.), with the final year of regular-issue 80% fine silver dollars rolling off the presses in 1967.
And any Morgan and Peace dollars you do find in junk lots have almost always been picked over to remove higher grade specimens. This is because U.S. silver dollars in better conditions (generally XF and above) tend to sell for premium prices over more worn examples.
But this isn't the case with Canadian silver dollars, giving astute silver stackers a very interesting arbitrage opportunity. Remember that roll of Canadian silver dollars that APMEX was willing to sell you for just 13.5% over spot? Well, they will also sell you the same roll in near-mint state AU/BU condition for only a few dollars more. Even now, these rolls of impressively large silver dollars in near pristine condition sell on the APMEX website for just 20.1% over spot. This is a criminally cheap price for so-called "junk silver" in the middle of the COVID-19 run on silver bullion products.
Canadian junk silver also offers collectors the possibility of finding numismatically valuable coins. Although uncommon, it isn't unheard of to come across overlooked coins in Canadian junk silver lots that are worth 2x, 3x or even 4x their melt value!
In contrast, it is much harder to find numismatically worthwhile coins in rolls or bags of U.S. junk silver, although it does happen on rare occasions. This is because U.S. silver coins tend to be heavily picked over for valuable specimens, while Canadian silver coins once again fly under the radar.
The Downsides of Buying 80% Purity Canadian Junk Silver
One drawback to stacking Canadian junk silver is its potentially limited availability. While nearly all bullion dealers in North America carry U.S. 90% junk silver coins in their inventory, far fewer stock Canadian 80% silver coins. In fact, at the time of writing I could only find two major online dealers selling Canadian junk silver: APMEX and SilverGoldBull. This could very well change in the future, but it does underscore just how difficult it can be to source this type of junk silver in volume.
Happily, there are other venues available for lovers of Canadian junk silver. Many small online dealers (primarily in Canada) stock and sell the stuff. And your local coin store might also have some Canadian 80% silver that it is willing to sell for close to spot, depending on the circumstances. Lastly, eBay often has good deals on Canadian silver coins.
Another complaint about Canadian junk silver is its relative lack of liquidity; there can be wide spreads between dealers' bid and ask prices. This means a dealer might charge you a high premium on the coins when you want to buy, but offer you well below spot when you want to sell.
This drawback isn't set in stone though. I've already documented how APMEX sells Canadian silver dollars for very competitive prices (although this could change in the future, depending on availability). Well, I've also discovered that the well-known online dealer Kitco is normally willing to purchase 80% fine Canadian junk silver for between 3% and 4% below melt value - the exact same rate it pays for U.S. junk silver. And although this is already a pretty good buyback price, it might be possible to find private buyers who are willing to pay even more.
Vintage 80% Fine Canadian Junk Silver Lots for Sale on eBay
I should also note that Kitco's buyback price on Canadian junk silver is now (as of mid-March 2020) at an unusually wide 9.9% discount to spot due to the recent turmoil in precious metal markets.
One of the biggest issues with Canadian junk silver is the confusion surrounding 50% fine silver coins that were struck in 1967 and 1968. While all Canadian dimes, quarter, halves and dollars were minted from 80% silver from 1920 through 1966, things get a bit messy afterwards. The rising price of silver in the mid 1960s forced the Royal Canadian Mint to debase some of its coinage to just 50% fine. Even this step ultimately proved insufficient, however, and all silver was permanently removed from circulating Canadian coinage by 1969.
So here is a quick cheat sheet. All Canadian silver dollars and half dollars were struck in 80% silver through 1967, changing over to 100% nickel in 1968. There are no 50% fine silver Canadian halves or dollars.
All Canadian dimes and quarters were minted from 80% fine silver through 1966. In 1967, the Royal Canadian Mint struck them in both 80% and 50% purities. There is no easy way to tell these different purity coins apart (although testing questionable coins with a CCT silver slide might help). In 1968, the composition of dimes and quarters was either 50% fine silver or 100% nickel. A strong magnet will be able to separate these two alloys.
So dealing with Canadian junk silver isn't so hard in the end. 1966 and earlier coins are all 80% goodness. 1967 halves and dollars are also money good. Any vintage Canadian coins that stick to a magnet are made from nickel, so they are relatively easy to weed out. Honestly, the best way to approach 1967 dimes and quarters is just to assume that they are all 50% fine and bid accordingly (if you're still interested).
The final problem with Canadian junk silver is that it is simply less recognized compared to U.S. junk silver. A lot of silver stackers buy junk silver in preparation for natural disasters, civil disturbances, economic crashes or other disruptive events where normal payment systems might break down. As a result, some bullion buyers simply don't like the idea of stockpiling a form of silver that other people might not recognize or accept.
Of course, if you live in Canada - or even in a U.S. state near the Canadian border - then I think this objection is largely moot. Most people living in these areas will be at least somewhat familiar with old Canadian silver coinage.
I personally feel that Canadian junk silver can be a great way to accumulate silver bullion, assuming you pay the right price for it. I'm especially fond of Canadian 80% silver dollars and half dollars, which tend to have less wear and greater numismatic potential than Canadian silver dimes and quarters. However you want to look at it, Canadian junk silver is the overlooked northern brother of U.S. junk silver.
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