On a stormy Saturday in your nation’s capital, I have been taking my inside time to watch the Rules and Bylaws Committee [PDF] of the Democratic National Committee argue about what to do with the delegates from Florida and Michigan. During one of the interruptions because the storms knocked out the signal, MSNBC’s Chris Matthews commented “welcome to the sausage factory of politics,” a twist on the Otto von Bismarck quote “Laws are like sausages, it is better not to see them being made.

After a brief chuckle, I thought how this was true in the world of coin production in the United States since every coin and medal that the US Mint produces is governed by law. In fact, I think the United States is the only country the regulates coins in this manner.

Rather than go into how laws are made here in the United States, I point the reader to this excellent write up provided at the Library of Congress. The PDF version describes this sausage making recipe in 58 pages.

The laws that are passed which govern the US Mint are codified in Title 31, Subtitle IV, Chapter 51, Subchapter II of the United States Code (U.S.C.). Section 5111 (31 U.S.C. §5111) give the authority to strike coins and medals to the Department of the Treasury. Section 5113 (31 U.S.C. §5113) talks about the tolerance in the weight of minted coins and orders that their weights and content be verified.

But the significant section of coinage law is Section 5112 (31 U.S.C. §5112), Denominations, specifications, and design of coins. Section 5112 covers all of the specification for every coin struck by the Mint. It describes the size, weight, content, and the design of the coin. Very little is left up to the Mint in coinage design.

Within Section 5112, there are specific paragraphs that tell the Mint exactly what coins are to look like. For example, paragraph (q) (31 U.S.C. §5112(q)) titled Gold Bullion Coins, that tells the Mint that the $50 gold coin is to “bear the original designs by James Earle Fraser, which appear on the 5-cent coin commonly referred to as the ‘Buffalo nickel’ or the ‘1913 Type 1’.”

Other paragraphs, like paragraph (l) that authorizes the 50 State Quarter Program, describes the process which the design will be made. In the case of the state quarters, the recommendation starts with the states then goes through the Mint’s regular design process.

The Mint’s design process is another example of the sausage making that governs US coinage. Once the Mint receives the Public Law, it either takes the input from the state or commemorative group involved to the Mint’s artists and engravers so they can create several designs that meet the legal requirements. Coin designs go through an internal review process before they are given to the Director of the Mint to submit them to the next process.

Once the designs are created, they are forwarded to the Citizens Coinage Advisory Committee to review and recommend a design. The CCAC may also ask the artists to alter designs for historical or aesthetic reasons and return with updated designs.

The CCAC was established by congress in 1992 as part of Public Law 102-390 (31 U.S.C. §5135) “to advise the Secretary on the selection of subjects and designs for commemorative coins.” (emphasis added)

Once advised by the CCAC, many paragraphs within Section 5112 requires that the designs are then sent to the US Commission of Fine Arts for their “review.” The CFA reviews the same designs as the CCAC and are not bound by the CCAC’s decision. In fact, there are many cases where the CFA will choose a different design or request different changes than decided by the CCAC. Changes are then vetted by the CCAC and the CFA. Many times, the CCAC and CFA will continue to disagree. An example of this version of the sausage grinder was evident on selecting the designs for the reverse of the 2009 Lincoln Cents.

But the process does not end there. The recommendations of the CCAC and CFA are forwarded to the Secretary of the Treasury, who has the final approval of all designs. Since the founding of the CCAC, no Treasury Secretary has ignored the recommendations of either organization. Typically, the Secretary approves the same design as recommended by the CFA, but is not required to do so. A classic example of this was the decision by Treasury Secretary Andrew Mellon to ignore the CFA recommendation on the design of the original Washington Quarter.

During the design process, the Mint ensures that the metals are procured to strike the coins or medal. Within Section 5112 are many paragraph that require that the metals used to strike the coins be purchased from US mines on the open market. The US Mint is the single largest purchaser of gold and silver in the United States while they compete with everyone else for the stores of copper, tin, and nickel to strike circulating coinage. The law prohibits the Mint from paying anything other than market value for coinage metals.

Once the Secretary approves the design, the Mint’s engravers do what is necessary to make the dies that will be used to strike the coins or medals. The Mint then gets to decide on the packaging and the price of the commemorative coin, bullion issue, or medal. Commemoratives will usually add a surcharge that will be donated to a particular organization. The parameters for pricing coins is also described in Section 5112.

Sometimes, the Mint does not even get to control where the coins are struck. Some laws will specify which branch mint will strike the coins. Others, like bullion issues are predetermined in other sections within Title 31.

Before collectibles can be sold, the Mint has to determine the price that will be charged for these items. Section 5112 requires the Mint to take into consideration of the market value of the metals used, the costs required to produce and sell the item, and the surcharge that will be donated to a particular organization. As we have seen in the past year, the Mint will re-price precious metals issues as the volatile market adjusts prices.

Finally, the coins and medals are struck. If they are circulating coins, the Mint strikes enough to meet the demand of the Federal Reserve plus additional for sale to collectors. Commemorative and collectible bullion can have mintage limits that are defined in Section 5112

The only part of the process that the Mint has complete control over is the marketing and packaging for numismatic sales. While the Mint may not produce more than the legal limit for any coin, they are allowed to create special packaging for collectors. The Mint has created special sets for some commemorative issues that include “coins and chronicles” sets that includes commemorative and proof strikes of circulating coins.

Whether it is the 50 State Quarter in circulation, a commemorative issue, or a medal honoring someone for their contribution to society, you are looking at the end result of the sausage making process that goes into making our coinage. Remember that when you think, “why did the Mint do that?”

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