Face value is simply the value of the coinage as represented by the coin, e.g. a dime is worth 10 U.S. cents.
When newly minted, $1000 face value of silver coinage contained 723 ounces of silver. (Therefore $1 face value - 4 quarters - contained .723 ounces of silver). Due to wear, a "bag" containing $1000 face value of junk silver coinage (e.g. 10,000 dimes, or 4,000 quarters) is today considered to contain 715 ounces (Troy) of silver. This arbitrary standard is used by convention to make transactions easier - all bags (meaning $1000 face value) of junk silver are assumed to contain 715 ounces of silver.
If silver is $4/oz., then a $1000 face bag (containing 715 oz. of silver by convention, 723 oz. of silver when minted) is worth $2860 (melt value).