May 30, 2011 | commemorative, history
The first recorded organized public recognition of the war dead occurred on May 1, 1865 in Charleston, South Carolina. On that day, Freedmen (freed southern slaves) celebrated the service of the 257 Union soldiers buried at the Washington Race Course (now Hampton Park). They labeled the gravesite “Martyrs of the Race Course.” African Americans continued that tradition and named the celebration Decoration Day.
The next year, southern states began their own Memorial Days to honor their soldiers who died during the war. No specific date was used but occurred in late April through June. By 1880, there was a more organized Confederate Memorial Day. These celebrations honored specific soldiers to commemorate the Confederate “Lost Cause.” By 1913, a sense of nationalism saw a commemoration of all soldiers that have died in battle.
In the north, the fraternal organization of Civil War veterans The Grand Army of the Republic began organizing “Decoration Day” in 1868. Decoration Day was to honor the fallen by decorating the graves of Union soldiers with flowers and flags. Ceremonies included speeches that were a mix of religion, nationalism, and a rehash of history in vitriolic terms against the Southern soldiers. The acrimony against the South began to subside by the end of the 1870s
Although Ironton, Ohio and Columbus, Mississippi claims to have the oldest and longest running celebrations, the most famous was started at Gettysburg National Park in 1868.
Gettysburg is the location of the three day battle where Union Major General George Gordon Meade’s Army of the Potomac defeated attacks by Confederate Gen. Robert E. Lee’s Army of Northern Virginia. It was the bloodiest battle of the Civil War and had the largest number of casualties. During a 50th Anniversary memoriam of the deceased, veteran of the Union and Confederate armies gathered for a four-day “Blue-Gray Reunion.” The event included speeches by President Woodrow Wilson, the first southern elected president since the Civil War, and Congressman James T. Heflin of Alabama. Heflin’s speech was memorable in his endorsement of building the Lincoln Memorial and a call for a Mother’s Day holiday.
Memorial Day did not take on national significances until after World War I. Rather than being a holiday to remember those of died in service during the Civil War, the nation began to recognize all those who gave the ultimate sacrifice during all conflicts. By the end of World War II, most of the celebrations were renamed from Decoration Day to Memorial Day. Memorial Day did not become an official holiday until 1967 and its date changed from the traditional May 30 to the last Monday of the month by the Uniform Holidays Act (Public Law 90-363, 5 U.S.C. § 6103(a)) in 1968.
The modern Memorial Day is a holiday celebrating the lives of those sacrificed in defense of the United States and its ideals at home and abroad. Today, we honor the memories of those who paid the ultimate sacrifice so that I can write this blog and you can read it.
Coin images courtesy of the U.S. Mint.
Vietnam Memorial image from Wikimedia.
May 24, 2011 | celebration, cents
NumisSociety, an online grass-roots community of numismatists, announced that the community is advocating a “National Spend a 1918 Lincoln Cent Day” on Memorial Day, May 30, 2011.
NumisSociety members were inspired by a story written by Dave Harper in Numismatic News. Harper writes about a letter he received from Army SGT Jarrett Briscoe who is stationed in Kuwait. In the letter, SGT Briscoe sent Harper a 1918 Lincoln Cent he received in change after a transaction with a local. Astonished to find a coin that old and so far away from home, SGT Briscoe asked Harper to “return it home” by putting it back into circulation in the United States.
It was a touching story that inspired the members of the NumisSociety. NumisSociety community members decided to join together to make this a truly memorable Memorial Day. In honor of SGT Briscoe and all members of our Armed Forces present and past, they want as many people to spend a 1918 Lincoln Cent in all 50 United States.
If you are interested, sign up at the NumisSocieity website and let them know (here) what state you will spend a 1918 Lincoln Cent on Memorial Day.
This is such a great idea, that I dug through my excess inventory and found a coin that I will spend on that day (after I remove it from its 2×2). It is the least I can do to be part of this effort to honor those who served and continue to serve on behalf of this country.
May 23, 2011 | commentary, gold, policy, silver
In recent months, there has been a call to either push for a gold standard or watch as states introduces bills coin their own money in response to the economy. On the extreme, Rep. Ron Paul (R-TX) introduced a bill that proposes repeal legal tender laws that will essentially bring the country back to the chaos of the United States pre-constitutional economies. Many of these arguments are interesting with some good and bad ideas, but they do not take into consideration issues of basic math.
If a proposal to move the United States to either a gold, silver, or bi-metal standard passes, we will probably see the biggest economic contraction in history because there is not enough gold or silver in the country’s storage in order to cover the total money supply.
First, in calculating the country’s value of gold and silver holdings, we find that according to the 2010 United States Mint Annual Report [PDF], there are 245,262,897 troy ounces of gold stored in the United States Bullion Depository in Fort Knox, Kentucky. This amount has not changed in recent memory. In the Mint facility at West Point, nicknamed the “Fort Knox of Silver,” the country owns 7,075,171 troy ounces of silver. But what they worth?
Determining the worth of the metals in storage is an interesting exercise. If we valued the government’s total holdings in accordance with statutory requirements, gold is valued at $42.22222 per fine troy ounce (see 31 U.S.C. § 5117(b)) and silver is values at least $1.292929292 per fine troy ounce (see 31 U.S.C. § 5116(b)(2). Although these values are much lower than what the markets value these metals, when the federal government counts its assets, gold and silver is based on numbers written into law.
Valuing these metals based on their market value, gold is worth $1,514.20 per troy ounce and silver is $35.16 per troy ounce (New York prices when the market closed on May 20, 2011). These values significantly raise the value of the government’s holdings. Using these numbers we can calculate the United States’ total holdings as:
|
Gold Statutory Value |
Gold Market Value |
Silver Statutory Value |
Silver Market Value |
| Inventories (troy ounces) |
245,262,897 |
245,262,897 |
7,075,171 |
7,075,171 |
| Valuation per Troy Ounce |
42.2222 |
1,513.20 |
1.292929292 |
35.16 |
| Total Value (in millions) |
$ 10,355 |
$ 371,205 |
$ 9,148 |
$ 247,985 |
| Total Statutory Value: |
$ 10,365 million |
| Total Market Value: |
$371,453 million |
This means that the amount of money the economy can have is over $371 billion. This seems reasonable until we look at the total amount of money that in economy.
Economists have several ways of calculating the money supply in an economy. The Federal Reserve used M1 and M2 as their basis of analysis. M1 is a narrow measure of money’s function as a medium of exchange. In other words, it is the purchase power of all liquid or near liquid assets. M2 is a broader measure that reflects money’s function as a store of value. For the Federal Reserve, M1 is basically the supply of ready cash. M2 consists of M1 plus other deposits that are not as readily available, such as savings and retirement accounts. The economists at the Federal Reserve are constantly updating these numbers to determine how well the economy is doing.
According to the Money Stock Measures published by the Federal Reserve on May 19, 2011, at the end of April 2011, the seasonally adjusted M1 money supply was $1,901 billion meaning that there is just under $2 trillion of ready cash in the economy. The M2 money supply, the count of all cash, is $8,945.7 billion.
When calculating what is needed to back the United States currency with precious metals, this is where basic mathematics shows the potential failure of the policy. If such a policy requires the instant conversion of all ready cash (M1) to be backed by metals, only the first $371 billion of the nearly $2 trillion could be converted. In other words, in order to back every dollar with the country’s store of metals, we are over $1.6 trillion dollars short. To cover the entire money supply (M2), there is a $7.2 trillion shortfall. Simply, there is only enough gold and silver to cover about 5-percent of all cash and equivalents in the United States economy.
In order to break even on the conversion, the country would either have to acquire precious metals on the open market, issue $7.2 trillion in bonds that had to be backed by precious metals to a world that does not have those kind of assets, or find a way to revaluate the dollar so that the total money supply can be covered by the $371 billion in physical assets.
And this only covers current assets. It does not account for any growth!
Regardless of how the metals advocates justify their positions, it would be impossible to back the entire economy with down payment of 5-percent.
May 22, 2011 | BEP, dollar, policy
Last March, the Government Accountability Office, the investigative research arm of the legislative branch, issued a report with the alliterative title “Replacing the $1 Note with a $1 Coin Would Provide a Financial Benefit to the Government” (GAO-11-281 [PDF]). The report opens by saying that “According to GAO’s analysis, replacing the $1 note with a $1 coin could save the government approximately $5.5 billion over 30 years. This would amount to an average yearly discounted net benefit—that is, the present value of future net benefits—of about $184 million.”
In 2008, I posted a similar analysis of the benefit of using “Paper v. Coin Dollars” with the political reasons of that time as to why the paper dollar would continue to be printed. Although the political landscape have changed, the will of the politicians to make this change does not exist.
Last month, a coalition that includes Brink’s, Inc., independent car wash operators, and public transportation officials responded against the GAO report citing the alleged logistical issues and increased costs in handling a dollar coin versus paper.
On their side opposing the sole use of a $1 coin is the Department of the Treasury and the Federal Reserve. They cite the differences in the weight and the public’s attachment to the paper dollar. In a USA Today/Gallup poll conducted in 2006 found that while 54-percent thought the Presidential $1 Coin thought the program was a good idea, 79-percent said that they do not want the coins to replace the paper dollar.
The political and economic environment has change. The GAO’s report bolstered the Dollar Coin Alliance, who has reportedly spent $250,000 to lobby congress since December. With the emphasis on the budget, a plan to find ways to generate revenues with little political risk has the concept of eliminating the paper dollar being taken seriously. This has the anti-coin dollar coalition worried.
Another factor working against the anti-coin dollar advocates is the loss of a major ally in congress. The late Senator Ted Kennedy (D-MA) did not want to see the paper dollar eliminated because it would hurt the Dalton, Mass. based Crane & Co.. Crane is the sole supplier of currency paper that the Bureau of Engraving and Printing uses to produce the one dollar note. John Olver (D-MA) represents the the Massachusetts First Congressional District that includes Dalton.
Although the political environment favors the elimination of the paper dollar, the risk adverse members of congress will look at the 2006 poll and probably not vote to eliminate the paper dollar. Unless key congressional leaders agree that ending the printing of the one-dollar note is in the best interests of everyone, including their political careers, the political reality is that printing of the dollar note is here to stay.
Dollar note image courtesy of the Bureau of Engraving and Printing
Dollar coin image courtesy of the U.S. Mint
May 21, 2011 | national park quarters, video
Catching up a bit, the U.S. Mint introduced the first 2011 coin in the America the Beautiful Quarters Program to honor Gettysburg National Military Park. The event was held at the park’s Museum and Visitor Center and was hosted by U.S. Mint Director for Sales and Marketing B.B. Craig; Gettysburg National Military Park Superintendent Bob Kirby; and Barbara Finfrock, vice chair of the Gettysburg Foundation.
The Battle of Gettysburg, the Union victory in the summer of 1863 that ended General Robert E. Lee’s second and most ambitious invasion of the North, was a turning point in the Civil War. Often referred to as the “High Water Mark of the Confederacy,” it was among the war’s bloodiest battles. It also provided President Abraham Lincoln with the setting for his most famous speech. Established by concerned citizens in 1864, the Gettysburg Battlefield Memorial Association set out to preserve portions of the battlefield as a memorial to the Union troops that fought in the battle. In 1895, the land was transferred to the federal government and Gettysburg National Military Park was established.
The following is the B-Roll video from the quarter’s release:
Video courtesy of NewsInfustion
May 16, 2011 | advice, education, exonumia, notaphily, scripophily
Numismatics is the collecting and study of items used in the exchange for goods, resolve debts, and objects used to represent something of monetary value. The dominant area of numismatics is the collection and study of legal tender coins with United States coins being the most collected. But numismatics is more than collection coins. It includes the collecting and study of:
- Exonumia—the study of tokens, medals, or other coin-like objects that are not considered legal tender. Those involved in exonumia collect elongated and encased coins, badges, counterstamped coins, wooden money, credit cards, and the like. Military medals are also collected as exonumia. And do not forget Love Tokens and Hobo Nickels, former legal tender coins with special engravings and carvings.
- Notaphily—is the study and collection of banknotes or legally authorized paper money. Notes can be collected by topic, date or time period, country, paper type, serial number, and even replacement or star notes (specific to the United States). Some consider collecting checks part of notaphily. Checks are collected by issuing bank, time period, and the signature.
- Scripophily—is the study and collection of stock and bond certificates. This is an interesting subset of numismatics because of the wide variety of items to collect. You can collect in the category of common stock, preferred stock, warrants, cumulative preferred stocks, bonds, zero-coupon bonds, and long term bonds. Scripophily can be collected by industry (telecom, automobile, aviation, etc.); autographs of the officers; or the type of vignettes that appear on the bonds.
I bring this up because a friend was asking about what to collect. He was under the impression that numismatics were coins only. I explained it was more than coins—it is anything that represents money or money-like items or even medals that represent worth. This is how military medals are considered part of numismatics. A medal representing the achievement shows the worth of the soldier as a warrior.
Showing him my collection, I showed how I have items that cover all of the areas of numismatics. New York City subway tokens and various medals are all part of exonumia. My recent interest in Maryland colonial currency and the purchase of some of the special collectibles from the Bureau of Engraving and Printing are part of notaphily. I cannot forget my small collection of stock certificates that represent the railroads in the original Monopoly game is a modest dive into scripophily.
I told my friend like I tell everyone else: why collect what everyone else collects. I collect what I like. I collect based on the “oh, neat!” factor. This is why I have a set of the Somalia Motorcycle Coins and looking for a set of the Somalia classic muscle car coins.
In other words, collect what you like and like what you collect!
May 13, 2011 | BEP, currency
This week, the Bank of Canada announced that they will be converting their banknotes from paper to using the polymer substrate. The Bank of Canada will begin to issue C$100 notes in November 2011. A C$50 note will be issued in March 2012 and the remaining denominations (C$20, C$10, and C$5) will be issued in 2013.
The polymer “paper” was developed by the Reserve Bank of Australia to enhance the durability of the notes and to incorporate security features not possible with paper or rag-based paper. RBA has been distributing polymer notes since 1992. While the polymer substrate costs little more and the production is only marginally more expensive, the benefit will come from the reduction in counterfeiting and the durability of the note. Polymer will last three-to-six times longer than rag-based paper.
On April 21, 2010, the government unveiled the new $100 note design. The new note, still made of rag-based paper, would incorporate new security features such as a different use of color shifting ink and a 3-D security ribbon. The note would continue to use security features first introduced in U.S. currency in 1996. The new notes were scheduled to be issued on February 10, 2011.
However, on October 1, 2010, the Federal Reserve announced that the issue of the redesigned $100 note will be delayed. It has been reported that the notes are folding during the printing process making a number of them unusable. It was further reported that the BEP is working with its paper provider, Crane & Co., to fix the issue.
I had asked a BEP Media Relations representative about the status of the new notes. I was told there was no additional information available.
With the new $100 note having printing problems, why has the BEP not looked into using the polymer substrate for U.S. currency? Why does the Federal Reserve, BEP, and Secret Service cling to 19th and 20th century printing technologies in the 21st century? Or is this a matter of “not invented here” to avoid alleged controversy by using a something invented by a foreign central bank?
It may be time for the Federal Reserve, BEP, and Secret Service to face reality that the old ways of doing things are not working and to look to the future for something better.
May 6, 2011 | currency, history
The Maryland Colony was founded by George Calvert, the First Baron of Baltimore, when he sailed from Newfoundland to Virginia in 1629. Calvert travelled up the Chesapeake Bay and settled in the area now known as Saint Mary’s City. Calvert applied to Charles I for a charter in 1630 but died in April 1632 before receiving it. On June 20, 1632, Charles I granted a charter for the colony to Cecil Calvert, the Second Baron of Baltimore. Charles I declared that the colony would be called Maryland, named for the Queen Consort Henrietta Maria.
In 1727, King George II named Charles Calvert the Fifth Baron of Baltimore. Charles then appointed himself Maryland’s governor in 1732, succeeding his brother, Benedict Calvert. When Charles took office, the colonial treasury was in need of funding. Charles used his political connections in London, he was granted permission to authorize and fund the first emission of bills of credit in the Maryland colony.
Calvert arranged for the printing of notes in England to replace low quality tobacco leaves that were circulating as ad hoc currency. The notes were issued in denominations based on the British pound sterling of 20 shillings: 1/- (one shilling), 1/6 (one shilling 6 pence), 2/6, 5/-, 10/-, 15/-, and 20/-. The first issue consisted of £90,000 in bills of credit that were issued as legal tender for most debts except for fees due to a minister or an officer. Each taxpayer was to be given 30/- in notes in return for burning 150 pounds of tobacco currency. History does not record why colonists were paid to burn tobacco. The notes were to be redeemed in 1748 with profits through Calvert’s investments in Bank of England stock that was purchased from the proceeds of a tax on tobacco exports. The notes were engraved in England and the paper was watermarked “Maryland.” When issued, the notes were hand dated with two signers.
Following that first issue, the Maryland Assembly voted to issue smaller emissions for specific purposes. For example, £5,000 was authorized in 1740 to help support a British expedition to the Spanish West Indies. This emission used the stock of unused notes from the 1733 issue but was signed with the current date. In 1749, the Maryland Assembly issued £60,000 in new notes, printed in England using the same plates as the 1733 emission except that the words “New Bill” were added below the denomination.
During the French and Indian War, the British government expected the affected colonies to contribute men and money. Royal Governor Horatio Sharpe asked the legislature to loan £2,000 to the war effort, to be used as rewards for enemy scalps. This emission used the same notes that were backed by a tax on carriage and wagon wheels, import duties on wine and rum, import duties on slaves, and license fees for peddlers. A further emission of £40,000 was authorized to pay for soldiers and the building of defenses to protect Maryland colonists. To support the loan, the Assembly added taxes to bachelors, billiard tables, legal documents, land, and also import taxes on horses, pitch, tar, and turpentine. An emission of £650 was authorized to help the British government pay gifts to allied native nations who fought in the war and a £3,000 loan to Virginia to help their reparations for the war.
In my new quest to find an example of every emission of Maryland Colonial currency, I was able to purchase an unused 1733 1 shilling 6 pence note from Heritage Auctions (pictured above, reverse is blank). The note is graded Choice About New 58PPQ by PCGS Currency. This beautiful note survived the 1733 and 1740 emissions and were saved by souvenir hunters when the Maryland Assembly began authorizing Jonas Green of Annapolis to print notes for later emissions. I am really having fun searching for Maryland Colonial notes.
May 2, 2011 | commemorative, medals, news
We learned from President Barack Obama that the Joint Special Operations Command found Osama Bin Laden in a compound outside of Islamabad, Pakistan and killed him during a raid. A grateful nation thanks the members of JSOC for your successful operation and we are glad that none of your members were injured in the process.
With the death of Osama Bin Laden nearly ten years after the attacks on September 11, 2001, we should remember all of those that died in those attacks on U.S. soil at the World Trade Center, the Pentagon, and Shanksville, Pennsylvania. We should also honor the sacrifices made by the members of the United States military and their families who gave of themselves and lives in the war on terrorism.
As numismatists, we can show our support in many ways. One way is to remember that later this year, the U.S. Mint will issue a silver commemorative medal whose surcharge of $10 per medal will be paid to the National September 11 Memorial & Museum at the World Trade Center to support the operations and maintenance. The bill, National September 11 Memorial & Museum Commemorative Medal Act of 2010, was signed into law on August 6, 2010 (Public Law No. 111-221 [Text] [PDF]) authorizes the production of 2 million one-ounce proof silver medals.
According to the law, the “design of the medals struck under this Act shall be emblematic of the courage, sacrifice, and strength of those individuals who perished in the terrorist attacks of September 11, 2001, the bravery of those who risked their lives to save others that day, and the endurance, resilience, and hope of those who survived.” Each medal must include the inscription of the years “2001-2011” and “Always Remember.” Medals can only be struck at the U.S. Mint facility at West Point and at Philadelphia.
At last report, the images in this post are those that have been recommended by the U.S. Commission of Fine Arts and the Citizens Coinage Advisory Committee. The U.S. Mint has not announced the whether they accepted the recommendations or when the medals will be available for purchase. Although I am not a medal collector, this is one medal I will purchase!
As for my feelings, I think the great jurist Clarence Darrow summed it up best: “I never wanted to see anybody die, but there are a few obituary notices I have read with pleasure.”
The next year, southern states began their own Memorial Days to honor their soldiers who died during the war. No specific date was used but occurred in late April through June. By 1880, there was a more organized Confederate Memorial Day. These celebrations honored specific soldiers to commemorate the Confederate “Lost Cause.” By 1913, a sense of nationalism saw a commemoration of all soldiers that have died in battle.
Gettysburg is the location of the three day battle where Union Major General George Gordon Meade’s Army of the Potomac defeated attacks by Confederate Gen. Robert E. Lee’s Army of Northern Virginia. It was the bloodiest battle of the Civil War and had the largest number of casualties. During a 50th Anniversary memoriam of the deceased, veteran of the Union and Confederate armies gathered for a four-day “Blue-Gray Reunion.” The event included speeches by President Woodrow Wilson, the first southern elected president since the Civil War, and Congressman James T. Heflin of Alabama. Heflin’s speech was memorable in his endorsement of building the Lincoln Memorial and a call for a Mother’s Day holiday.
Memorial Day did not take on national significances until after World War I. Rather than being a holiday to remember those of died in service during the Civil War, the nation began to recognize all those who gave the ultimate sacrifice during all conflicts. By the end of World War II, most of the celebrations were renamed from Decoration Day to Memorial Day. Memorial Day did not become an official holiday until 1967 and its date changed from the traditional May 30 to the last Monday of the month by the Uniform Holidays Act (Public Law 90-363, 5 U.S.C. § 6103(a)) in 1968.
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