One of the reasons that this happened was the fact that the banking system wasn’t the greatest. There were plenty of banks that would open up for business, and then be out of business within a couple of weeks or months. Because of the very shaky ground that the banks were on, people were afraid that they would not get their initial deposits back.
Because of this, people started to hoard silver and gold coins (gold was in circulation in higher denomination coins with a face value of $1, $2.50, $5, $10 and $20). It got so bad that the lowly little penny was even stockpiled.
The United States Mint (and mints from all around the world, for that matter) still makes pure silver coins, but they are for collectors and investors alike.
With the price of silver going up, it only makes sense to set a few examples aside to watch them go up in value. If you play your cards right, you can make a tidy profit on your original purchase price.