Investing in Gold: Silver certificates, silver coins diverged greatly in value

Silver certificates were a standard currency in our country for nearly 100 years. From their inception in 1878 until their final printing in 1963, silver certificates were designed to be backed by the value of actual silver. With silver on the rise in the 1960s the actual value of a silver dollar was becoming more than the face value of a one dollar note, forcing the U.S. to quit printing them. Redemption for the silver certificates continued until June 24, 1968. After that time the certificate maintained its value as a Federal Reserve note, but was no longer redeemable for a silver dollar.

With silver reaching the $30 mark this week, a stark contrast between the value of silver and the value of the dollar can be seen. The true value of a silver certificate is its face value, but most are worth a slight premium to collectors. Most silver certificates still known to exist trade from $1.25 to $2 each. Of course there are varieties and issues that are worth much more, but most fall into this category.

With silver at $30, the value of a silver dollar has shot up to at least $23 based on its silver content. Of course some have even more value to a collector based on rarity or condition. Most silver dollars trade for between $23-$30 for the common dates and grades. There are always a host of reasons that silver dollars can be worth much more than $30, but most do not make the higher category due to availability and demand.

Looking at the value difference between the silver certificate and the silver coin can be eye opening. If a person had $1,000 in 1968 and kept them in silver certificates the value today would most likely be around $1,500. But, if that same person had redeemed their certificates for coins the value in today's dollars would be around $23,000.

In 1968 many collectors kept their silver certificates in hopes of the collector value going up, but after 40 years it has been shown that the wiser choice was to keep the actual silver over the certificates themselves. If you have older silver certificates you can always have them checked to see if they are better varieties or issues, but the value of each will depend on that fact itself. Trading your old paper money in for metals will not net you as much now as it would have a generation ago, but it may just be a wise move for the generation you pass it down to.

• Allen Rowe is the owner of Northern Nevada Coin in Carson City.