254, enacted July 23, 1965, eliminated silver from the circulating United States dime (ten-cent piece) and quarter dollar coins.

After extensive study by the Treasury Department, President Lyndon B. Johnson in June 1965 recommended that Congress pass legislation to allow for silverless dimes and quarters, and debased silver half dollars.

Although there was some opposition, mainly from legislators representing Western mining states, the bill progressed rapidly through Congress, and was enacted with Johnson's signature on July 23, 1965.

Making a dollar equal to given quantities of both gold and silver made the currency vulnerable to variations in the price of precious metals,[1][2] and U.S. coins flowed overseas for melting until adjustments were made to their size and weight in 1834[3] and again with the Coinage Act of 1853, when the amount of bullion in the silver coins worth less than a dollar was reduced.

[21] Beginning in late 1959, the Mint failed to provide enough coins to satisfy demand, and the Fed, through its district banks and branches, imposed rationing.

Traditionally, the heavy demand for coinage late in the year resulted in a large amount of flowback in the winter, but in early 1963, few coins returned to the banks, or to the Fed.

In much-photographed scenes at the Treasury Building in Washington, citizens had shown up with wheelbarrows, armed guards, and even armored cars to haul away the silver.

The Mint struck over 300,000 of them, bearing the Peace dollar design and the date 1964, in May 1965 but due to a public outcry that the coins would only be hoarded, they were melted.

[33] The minting had been at the direction of President Lyndon Johnson; the subsequent flip-flop on the question left Nevada Senator Alan Bible, a prominent supporter of the mining industry, unimpressed with the administration's leadership on coin matters, feeling officials were leaving the mess for Congress to straighten out.

Two chains in the Midwest commissioned their own paper scrip, but this was never issued as the Treasury warned it trespassed on the federal prerogative to coin money.

[39] Despite an increased need for coins in an improving economy, merchants made it past the 1964 holiday season without severe shortages, though the half dollar had stopped circulating.

The material was hard, allowing the designs to remain recognizable for long periods, and other nations, such as the United Kingdom, had transitioned from silver to copper-nickel coins.

[42] On June 3, 1965, President Johnson sent a special message to Congress, asking it to pass legislation allowing the dime and quarter to be made from base metal, and to reduce the silver content of the half dollar to 40 percent.

He urged the passage of draft legislation, attached to the message, and said the bill would "ensure a stable and dignified coinage, fully adequate in quantity and in its specially designed technical characteristics to the needs of our Twentieth Century life.

[43] This report had been expected in February, but had been repeatedly delayed,[44][45] in part because outgoing Treasury Secretary C. Douglas Dillon felt that his successor should approve the plan, as he would have to live with the consequences.

Most business stakeholders, including the banks, the vending machine operators, and corporate leaders, wanted to see the bill pass, it being better than the current situation.

[50] On June 11, the Senate committee issued a report recommending the bill's passage, with several amendments, mostly technical in nature.

Congressman James F. Battin of Montana offered an amendment to make the dime and quarter out of 40 percent silver; although Patman objected that the committee had rejected the idea, it initially passed 122–112.

[58] After other attempts were made in vain to derail the bill, the House Minority Leader, Michigan's Gerald R. Ford, asked that there be a recorded vote on H.R.

[62] Section 102 made all coins and currency of the United States legal tender without limit, reiterating language found in the Act of May 12, 1933.

[63] Section 103 gave the secretary broad discretion to acquire equipment, supplies, and patent rights to expedite the production of coins during the emergency, with the provision again to expire after five years.

Section 104 required the secretary to purchase at $1.25 per troy ounce silver bullion of U.S. origin within a year of the month in which it was mined.

[62] According to the Senate committee report on the bill, section 104 was intended "as a precautionary measure to protect our mining industry from any undue downward fluctuations in the market during the period of transition".

[64] This provision, which was limited to five years by the House committee,[64] was deemed to be "continuing government interference in the market for silver" by the American Institute for Economic Research in its report on Johnson's message to Congress.

[65] Section 105 authorized the secretary to prohibit the melting, export, or treating of any coin, if necessary to protect the nation's coinage, and prescribed a penalty of up to five years in prison for violation of such an order—section 106 declared that coins seized under section 105 would be forfeited to the United States, with the secretary given powers paralleling those under the Internal Revenue Code to enforce such forfeitures.

[67] Section 207 repealed obsolete limitations on wastage in the Mint's operations, but directed that administrative regulations be developed on the subject, which could be more easily changed.

Section 208 repealed a provision of the 1873 act requiring coinage dies for the obverse, which are dated, to be destroyed at the end of each year.

[69] The Mint continued to strike 1964-dated silver pieces under the authority of the Coinage Act until 1966,[70] when Secretary Fowler announced, "the coin shortage is over".

After the Joint Commission's second meeting, in July 1967, the Treasury announced that it would no longer attempt to maintain the $1.2929 price as it could keep the nation supplied even if all the remaining silver coins vanished from circulation,[71] as they soon did.

Although the Joint Commission in December 1968 voted to recommend making the prohibitions on melting or exporting silver coin permanent, it reconsidered and in March 1969, the bans were lifted.