It has been a very interesting few weeks since my last post. During that time there was a lot of business activity that I hope will allow be to have more time to do some of the things I would rather be doing, like write. Aside from the blog, I have 95-percent of a collecting-related ebook completed and 80-percent of a different sort of book completed. In between business meetings, I was able to start a book I am tentatively calling “Why did the Mint do that?” which may include information about why the Bureau of Engraving and Printing does what it does including a section on the history of counterfeit detection in the United States.
In the mean time, I have started several posts in the same style that I have been writing for the last few years. Until I can make more time, some long-form tomes will have to wait. Instead of taking the time to write longer items, I will look to write shorter posts including in multiple parts, depending on the topic. This way, I can clear the list of ideas I have been saving.
One more bit of housekeeping before I talk about my new collection: you might see a page that says that I am working on an update. I decided that the blog needs a new look and that periodically, I will work on a theme change. Hopefully, I can finish by the end of the month, but you never know!
That being said, I also had taken the time to start a new collection. While I wanted to start something new for a while and had an idea for a direction, I did not have the opportunity until now.
Earlier this month I attended a local coin show in Westminster, Maryland. Westminster could be considered a distant suburb of Baltimore with a big firehall that housed this show. Although I was there to man the front table representing the Maryland State Numismatic Association as its president greeting people, I was able to slip inside to look around. One of the tables had binders with foreign coins and I started to look.
Grabbing the one for Canada, I remembered that the first official coinage of the Province of Canada. In 1840, the British Parliament passed the Act of Union that merged the upper and lower colonies of Canada into the single Province of Canada. As a province, Canada was able to form a more independent government, even though it was answerable to the Crown. Answering to political dissension that was building in the province, Queen Victoria named Ottawa as the province’s capital. Although the province government met in Ottawa anyway, this was a symbolic move.
One of the problems was the lack of circulating currency. Even though the monarchs loosened the rules on circulating coinage in Canada, there was a need for a larger supply. Even though the Province of Canada’s parliament passed legislation to adopt a decimal coinage, Queen Victoria finally recognized the request. As part of trying to maintain order in the province, Victoria ordered the Royal Mint to produce coinage for Canada starting in 1858.
Canadian large cents with the effigy of Queen Victoria are affectionately called Vickie Cents. With the recent elimination of the one cent coin, looking back at the Canadian cent through its history has become popular with Canadian coin collectors. The key date for Vickie Cents is the first year, 1858 coin.
At mid-grade the 1858 Vickie cent is not that expensive. Although they are harder to find, the demand keeps the price reasonable for the average collector. Although I have been thinking about starting a Vickie cent collection for a while but when I found one in this dealer’s binder, I could not resist!Based on the description in the Charlton Standard Catalog of Canadian Coins, the coin would be graded around F-12. But since it is the first year of issue and the general rule is to buy the best you can afford, this was how I was going to make my start with Vickie cents.
1858 Province of Canada Large Cent (Vickie Cent) obverse
1858 Province of Canada Large Cent (Vickie Cent) reverse
Since I was there I decided that even though it was not the first year of issue, I would pick up the last year of issue. Since Queen Victoria died in January 1901, that was the last year her image appeared on coins in the British Commonwealth. I picked out a nice extra fine example to mark the beginning and end of the series.
1901 Dominion of Canada Large Cent obverse (Last year of Victoria Cent)
1901 Dominion of Canada Large Cent reverse (Last year of Victoria Cent)
Vickie cents were produced in 1858 and 1859 with a few distinguished varieties. One notable variety is the 1858 coin-aligned reverse. At the time it was the Royal Mint’s practice to have coins aligned in what we call today “medal alignment” where the top of the obverse and reverse point in the same direction. An error at the mint created a rarer coin-aligned (tops on opposite ends) coin. In 1859 there were overstrikes, doubled numbers, alignment differences, and composition differences. If I were to look for all of the known varieties, the cost of the 1859 with a Narrow 9 made of brass (not bronze) would cost about as much as a 1914-D Lincoln cent and be much more difficult to find.
The cents of 1858-1859 were minted in enough quantity to keep the Canada stocked with cent until 1876. New portrait, and varieties, were introduced as well as a striking at the Birmingham Mint, also known as the Heaton Mint, along side the British halfpenny, which used the same planchet. Coins struck at the Heaton Mint were given the “H” mint mark.
Foreign coin collecting can be an adventure that may not be as expensive as their U.S. counterparts. If you are collecting for fun, as I am, pick a country, learn a little about the history, and pick a series to collect. I picked Canada because my wife’s family is from the Province of Québec. Not only will you find it a challenge, but the lower demand may make your endeavor more affordable.
Lithograph depicting Lincoln’s Assassination by Currier and Ives.
As Doctors Charles Leale, Charles Sabin Taft, Albert Taft, two soldiers who are anonymous to history, and William Hall carried the bleeding body of the president out of Ford’s Theatre, they saw Henry Safford in front of William Petersen’s boarding house waiving the crowd to bring them across to the street. It rained that evening as they brought Lincoln into the house and laid him diagonally on a bed in a first floor bedroom.
Joining the crowd in the room was Surgeon General of the United States Army Joseph K. Barnes, his assistant Charles Henry Crane, Lincoln’s personal physician Dr. Robert K. Stone, and Dr. Anderson Ruffin Abbott the first Black Canadian to be a licensed physician. With Barnes in charge, the examination and treatment proved beyond the capabilities of the medical arts of the time. By 7:22 AM on April 15, 1865, Abraham Lincoln, the 16th President of the United States of America had succumbed to his injuries.
While every president faces their shares of challenges, Abraham Lincoln was challenged with the morality of slavery and the breaking apart of the republic before it reached its 100th anniversary. He was so concerned about keeping the nation together that not only did he have Union troops shoot at what he considered fellow Americans, but he broke laws and violated the constitution in order to keep the country going.
Lincoln is remembered for his debates with Stephen Douglas, the Emancipation Proclamation, Gettysburg Address, his second inaugural address, the Civil War, the Homestead Act, three revenue-based (taxation) acts, and the National Banking Act that lead to the creation of the Bureau of Engraving and Printing. Aside from being the first president assassinated, there are other aspects of his presidency that is not widely discussed. Lincoln was known for either not enforcing laws he did not like or over enforcing laws to silence critics. While he did not condone a lot of the brutality especially from Generals Sherman and Grant, he did not condemn them either. Some historians suggest that his appointment of the young General George B. McClellan after the loss at the First Battle of Bull Run was to use him to manipulate the strategy to be more brutal against the Confederacy.
In a move that would have had any modern president excoriated, Lincoln ignored a writ of habeas corpus issued by Supreme Court Chief Justice Roger B. Taney. Lincoln became incensed with Taney after he authored the controversial Dred Scott v. Sanford decision that Lincoln highly disagreed with. Following the writ, Lincoln and his cabinet ignored Taney, a move that hurt him in many ways. Taney died miserable and poor after a long illness blaming Lincoln for his decline.
1909-VDB Lincoln Cent
Even with these blemishes on his record, Abraham Lincoln is the second-most celebrated and honored president. For his accomplishments, Theodore Roosevelt listened to immigrant artist Victor David Brenner to honor Lincoln on a coin. As part of Roosevelt’s “pet crime,” a portrait of Lincoln design by Brenner has appeared on the one-cent coin for 117 years. Lincoln has also appeared on the reverse of the 2013 Illinois state quarter, as part of the depiction of Mount Rushmore on the 2006 South Dakota quarter, and the 2010 Lincoln presidential dollar.
Obverse of the 2009 Abraham Lincoln Commemorative proof coin
Lincoln also appeared on the 1918 Illinois 100th anniversary of statehood commemorative half dollar, 1991 Mount Rushmore commemorative coin series, and the 2009 commemorative silver dollar honoring the 200th anniversary of his birth.
At one time there was a trivia question as to the only United States coin with a presidential portrait of a president on both sides of the coin: the Lincoln Memorial cent. If you look carefully in the memorial on the reverse, you can see the statue of Lincoln in the memorial making it the only coin of its time to have this distinction.
Aside from appearing on the current $5 Federal Reserve Note, Lincoln has appeared on notes of 10 different designs and denominations including the fourth issue 50-cents fractional note, $10 Demand Note, $500 Gold Certificate, and a $1 large size silver certificate.
Series 1882 $500 Gold Certificate
In honor of Lincoln, spend at least one of those little copper-coated zinc cents remembering that if it was not for him, that coin might not have existed.
Curier & Ives image courtesy of the Smithsonian Institute. Image of the 1909-VDB cent courtesy of USAcoinbook.com.Image of the 2009 Lincoln commemorative dollar courtesy of the U.S. Mint. Banknote image courtesy of AntiqueBanknotes.com.
The U.S. Mint has sent out a press alert saying that CBS Sunday Morning will air two segments this Sunday, April 12th, that may be of interest to collectors. The first segment will focus on the artists and engravers in Philadelphia and the role they play in the coin-making process. The segment will also look at some of the Philadelphia Mint’s history.
A second segment will look at the penny and the debate about whether or not it should be eliminated.
CBS is branding this show “The Money Issue” with CBS News Senior Business Correspondent Anthony Mason as the guest host. The four scheduled segments include “What’s in a name” examining the art of branding; “The Look of Money” with Anna Werner showing the design process as the U.S. Mint’s press alert said; Correspondent Nancy Giles reports on “Making sense of pennies” and the great elimination debate; Mo Rocca who reports on “Pirate Joe’s” and the grey market of food; and more.
CBS Sunday Morning is usually hosted by Charles Osgood and airs at 9 am Eastern Time. Check your local listings to see when it airs in your region.
I know my postings have been sparse. Business has been picking up making me very busy. I will explain more at another time. But for now, I wanted to share my first 2015 find of the year.
In the past few years I have had to wait until late April or May to find a coin with the current year’s date in pocket change. This year, it took a trip to New York to find a 2015 coin earlier than in the past.
After dropping off my dogs at the house of the person who babysits them, my wife and found our way to I-95 then north to the city of my birth. Since I am a coffee hound, I have to stop in order to take care of the after effects of drinking the coffee and buy more, of course. This time, we stopped at the Chesapeake House Travel Plaza on I-95 in Cecil County, Maryland.
First, we were stunned by the new building. the state demolished the old Chesapeake House and rebuilt a new building complete with LEED Silver Certification and a better choice of side-of-the-road restaurants than the usual. One of those establishments was Peet’s Coffee and Tea where I was able to fuel myself before fueling my vehicle.
As part of my change I received a shiny, new 2015 Lincoln cent!
Not only did a get a good cup of coffee but I was treated to my first 2015 find of the year. It was a good way to start a weekend that included a family celebration!
Did you find a 2015 coin in your pocket change?
Yes I did (71%, 17 Votes)
Not yet (21%, 5 Votes)
I am not looking (8%, 2 Votes)
Total Voters: 24
$2 Federal Reserve Notes found at a convenience store near where I work
Over the weekend I attended an estate auction that included coins for sale. While my new business venture concentrates on all vintage collectibles, I am still a collector and continue to look for those interesting items and the good coins to add to my collection. As I was looking over the lots I noticed one had several blue folders of Lincoln cents. The collector in me could not resist and I picked up the folders and started looking.
Every hold was filled.
What drew my eye first was the hole marked “1909-S VDB.” Even though the 1914-D may be worth more, the 1909-S VDB is considered the Holy Grail amongst change hunters. With only 484,000 struck the odds of finding one are not in a change hunter’s favor. But we keep looking and hoping.
After reaching into my pocket for my ever present loupe, I asked the attendant if I could remove the coin to see the reverse. I had to check for those three letters on the back because it did say it was a 1909-S on the front. With the attendant watching me, I removed the coin from the slot, turned it over and brought it up to my loupe.
Using a 16X loupe I zeroed in on the area where I could find the “V.D.B” only to find something unexpected. On this coin, the “VDB” with no periods were punched into the coin. Holding the coin and turning it in the light to see how the light reacts, it was easy to see that the coin was not real.
Being very disappointed I quietly told the attendant that the coin was altered. She did not know what to do. When I suggested she tell her boss, she took the coin from me and went into a back room. A moment later, she returned and asked me to follow her to the office.
Scott’s 1909-S VDB
While the owner of the auction house was a bit upset, we talked to establish who I was and how I was qualified to judge the authenticity. After asking him to bring up my blog and showing him that I own a real 1909-S VDB, I told him how I know that the coin was altered. I handed him my loupe and told him to look at the letters. When he saw that the letters were punched into the coin instead of being in relief, he became upset again, but not at me.
I understand how he felt. In the auction business, they earn money from the buyer and seller fees. If the item sells for a high price, the auction house makes more money. In this case, since the coin was a solid VF, it could have sold for $700-800 alone.
Before he became too angry, I asked to see the 1914-D. At VF that coin is about $400 in the retail market. When I looked carefully I could see that the mintmark was added to the coin. It was not a very good job when you see it under magnification but looked all right on first glance. I showed the auctioneer how I know it had the mintmark added. He agreed with my assessment.
He asked if there were any more important dates that he should know about. I zeroed in on the hole for the 1922-D that had “No D” written in pen under the date. Even before finding the date under the loupe I could tell the coin was whizzed. That is a bad sign to begin with but if the coin was real, it would diminish its value but not make it worthless. What made it worthless was that you can tell someone filed the mintmark off the coin. Whoever did the filing did not do a good job because it made a little hole where the mintmark should be. This coin doctor probably whizzed the coin in order to cover up the alterations.
To say I gave this gentleman a shock would be an understatement. He shook my hand and offered me a discount on the buyer’s fee for helping him. After leaving his office he had the attendant who helped me remove all of the blue binders from the auction. When I spoke with the attendant later, she said they were all from the same consignor and that he was going to return them as being unsalable.
This was not the first time I attended an auction at this place and it will not be my last. Aside from being able to purchase good inventory for my business, they have proven to me they have integrity. Knowing this helps me buy with confidence.
I tell this story to provide two lessons. First, always examine the items before you bid. Even for online auctions, examine the pictures and read any descriptions carefully. If you are afraid to buy ungraded coins, then buy only graded coins. But make sure you are fully aware of what is being sold. Do not be afraid of asking the seller a question or even asking for a better picture. If the seller cannot help you then do not buy from that seller.
Buy the book before buying the coin!
When buying from a live auction, look carefully at the coins. Even if the coin was encased by a grading service, take out that loupe and examine. This means you should know what you are looking at. Educate yourself about the coins you are interested in purchasing. In a future post, I will discuss my portable reference and buying tools.
My second lesson is to know who you are buying from. This is more difficult online but you do have to take the feedback seriously. Again, if you have any questions you should ask. Every site has a way to contact the seller in order for you to ask questions. If the seller is not cooperative, let that be a sign for you.
When working with auction houses, it takes a little longer to establish a relationship. But you need to introduce yourself, talk with people and ask questions. Make yourself known and show that you are a serious buyer. It may take a few auctions to establish a relationship, but be persistent. Aside from preferential treatment and discounted seller fees, someone with a relationship can be told bout unpublished items in advance so that you are prepared to buy quicker than someone off the street. Another advantage is that if you specialize in something that the auction house cannot sell, you can buy it as a good price. As a reseller, I find that very good for business.
Even though online auctions are very popular, there is nothing better than being there live. I highly recommend the experience.
Experimental 1974-D Lincoln cent made struck on an aluminum planchet
After all the U.S. Mint has tried to do to make itself more appealing to the collecting community, they are now reverting to their old form and attacking a collectors for owning a coin they claim is “contraband.”
The argument is over a 1974-D Lincoln cent made of aluminum that was to be auctions by Heritage Auctions during the April 2014 Central States Numismatic Society auction. Rather than being auctioned, the U.S. Mint requested its return as government property even though it was reported that no records of the coin’s production exist.
According to an updated report appearing in Coin World, the coin was given to Harry Lawrence, a former Denver mint assistant superintendent, as part of a retirement gift in 1979. Upon his death, his possession were willed to his son Randall Lawrence.
Randall Lawrence and Michael McConnell, a San Deigo-area dealer working with Lawrence, consigned the coin to Heritage in hopes to be able to donate at least $100,000 from the sale to charities helping the homeless in San Deigo. Heritage had estimated the coin to be worth $250,000. Lawrence and McConnell are asking the federal court to determine the coin’s ownership.
U.S. Mint does not have records of the aluminum cent being struck in Denver. There are records of 1 million coins struck in Philadelphia. Nearly all were destroy.
The U.S. Mint’s mishandling of their own records are legendary. Some of the more famous coins that have escaped official record include the 1933 Saint-Gaudens double eagle and the five 1913 Liberty Head nickels. Numismatic researcher Roger Burdette has documented significant gaps in the way the U.S. Mint has historically mishandled their own documents. Even in recent years, the U.S. Mint has played fast-and-loose even with required documentation during previous director’s term because the narrative of the annual report would make the U.S. Mint’s performance look less than stellar.
Unfortunately for the U.S. Mint, Coin World reporter Paul Gilkes was able to interview former Denver Mint employee Benito Martinez “who said he personally struck fewer than a dozen of these coins as a die setter on aluminum planchets provided by the Philadelphia Mint.” Martinez said that these coins eventually made its way to the U.S. Mint headquarters in Washington, D.C.
Aside from the bad precedent this would create for all pattern coins and trial strikes, this has the potential to undo whatever good will the U.S. Mint has built with the collecting public in the last few years. Problems with the Kennedy gold coin not withstanding, the work that the U.S. Mint has done after the departure of Director Edmund Moy to build a more collector-friendly can be undone by continuing this fight.
Maybe it is time that the lawyers at the U.S. Mint and the Department of the Treasury stop trying to flex its muscles and realize the goodwill that would be created by changing policies and attitudes. After all, like all lawyers it is possible to interpret the law in a manner that would be more helpful while protecting the U.S. Mint and the U.S. government.
U.S. cents have been made of copper, steel, and copper plated zinc. What’s next?
As part of its ongoing study of alternative medals to be used for coinage mandated by the Coin Modernization, Oversight, and Continuity Act of 2010, (Public Law 111-302 [PDF]), the U.S. Mint is seeking comment from “ stakeholders” as to the impact expected if congress was to approve a change in coinage metals. The Request for Comment (RFC) was published in the Federal Register (79 F.R. 19971 [PDF]) asking for stakeholders to provide more input to its ongoing research effort.
Although the U.S. Mint does not define who they consider stakeholders but does mention the “coin industry” in one paragraph, the guideline questions are clearly targeted to the coin-operated machine industry. Coin-op machines are more than the soda and candy machines that may be in the break room where you work. These machines include toll booth machines, machines that produce bus and/or train fare cards, parking meters, game machines, and even the few pay telephones that are still in use. Everything that accepts coins will have to be replaced, repaired, adjusted, or scrapped should there be a change in coinage metals.
The new technology used by the Royal Canadian Mint to protect the Toonie (C$2)
The trouble that the United States is in for can be seen just across the border in Canada. Although the Royal Canadian Mint produced test tokens that anyone could have used to verify and adjust their systems two years prior to the introduction of the new Loonie (C$1) and Toonie (C$2) coins, Canadian news followed the trials and tribulations of many communities whose parking meters and other parking-related systems would not accept the new coins.
In the United Kingdom, the Bank of England and law enforcement is engaged in a difficult fight against counterfeit £1 coins. Sources estimate that between 3-percent of the £1 coins in circulation are fake amounting to more than 45 million counterfeit coins. These fakes are so convincing and very well constructed that they can be successfully used in vending machines for payment including in London’s Underground. In an attempt to stem the problem, the Royal Mint has designed a new £1 coin to be circulated by 2017 in hopes to cut the counterfeiting rate.
New edge view of the coin the Royal Mint hopes will be able to thwart counterfeiters.
Changes in the Loonie and Toonie were subtle as compared to the changes in the £1 coin. While the size of the coin will remain about the same, it will go from being round to have 12 sides. Rather than it being make of one metal, the new coin will be bi-metallic with a yellow metal on the outer ring and a silver-colored inner core. Rather than the edge being milled with a single incuse inscription, the edge will have alternating milling and the year in Roman numerals on each of the sides.
The coin-operated businesses in Britain are beginning to complain about the changes even though they are being given nearly three years to adjust. For their systems, the new coins will have a different weight, specific gravity, and the electromagnetic signature will differ from the current coin. Every system from the Underground to parking systems to food and beverage vending machines will have to be upgraded to accept the new coins. One report estimates that it will cost up to £50 million (approximately $82.3 million) just to update parking systems.
The Automatic Vending Association, the U.K.’s vending industry trade group, estimates that the new coin will costs its members over £100 million ($168.5 million) to convert their machines.
Expect the costs in the United States to be much higher mainly because of scale. The National Automatic Merchandising Association (NAMA), the $45 billion per year vending industry trade association in the United States, has already issued a report saying that it will cost from $100 to $500 per machine to convert them to accept new coinage.
The American Amusement Machine Association (AAMA) has come out against any change in U.S. coinage. It was reported that AAMA president John Schultz said to leave the coinage alone “because it works, rather than risk the costly consequences.” AAMA has not provided an estimate for those costly consequences.
The last significant change in coinage composition was in 2000 on the introduction of the Sacagawea “Golden” dollar coin. Following the debacle of the Susan B. Anthony small dollar coin that was mistaken for a quarter, the coin was redesigned without a reeded edge and given a golden color by adding manganese to the metals mix. Although this change primarily impacted the gaming industry that relied on the dollar coin, the vending machine industry did respond by converting old machines and manufacturing new ones that accepted the new coin.
The change to copper-coated zinc cents created a seven coin set for 1982
Previously, the one cent coin went from being made of 95-percent copper and the rest zinc to being made of 98.5-percent zinc with a copper coating. Not only did this change occur in the middle of 1982, but it created seven collectible varieties of coins that are not that expensive to own. Although this change did not affect many industries, new automated cash registers being used primarily at grocery and home improvement stores can accept both the copper and zinc coins without problems.
Any discussion of coin composition changes has to include the change from silver to clad coinage. When President Lyndon B. Johnson signed the Coinage Act of 1965 (Pub. L. 89-81) into law on July 23, 1965, the composition of the dime and quarter dollar was change from 90-percent silver and 10-copper to 75-percent copper and 25-percent nickel bonded to a core of pure copper. This mix of metals was selected so that the coins would have an electromagnetic signature that was very similar to their silver counterparts. The half-dollar was reduced to 40-percent silver surrounding a pure copper core.
This change in coinage was done for the same reason that congress has asked the U.S. Mint to study alternative metals: the cost of materials and labor to make the coins is higher than the face value of the coin. As of the Fiscal Year 2013 (October 2012-September 2013) Annual Report, it costs the U.S. Mint 1.83 cents in labor and materials to manufacture the one cent coin and 9.41 cents for the five cents coin.
As a comparison, the cost for the dime including labor and materials is 4.56 cents per coin while the quarter dollar costs 10.5 cents to make.
1853 Braided Hair Half Cent Obverse – The last lowest denomination coin eliminated by the congress.
Deciding what to do about U.S. coinage goes beyond the accounting details. A change by the federal government will impact everyone domestically and those overseas that use the dollar as their currency. There will be quite a few collateral issues including economic, political, and philosophical considerations. From a policy perspective, congress will have to think about the following before making any changes to our change:
Does the U.S. eliminate the one cent coin?
Does the U.S. eliminate the one dollar note in favor of a coin?
If a transition to new metals is approved, does the government provide economic assistance to small businesses and sectors that will feel a bigger impact from this change?
Will the federal government provide assistance to communities to help convert municipal services to be able to take the new coins?
Should the U.S. Mint, a government agency, be allowed and/or required to earn a profit from its operations?
How will the people be educated on the new coinage?
Since the U.S. Mint did not define who their stakeholders are, it is fair to say that the stakeholders are all citizens of the United States. If you would like to comment, the U.S. Mint is looking for input on the following factors:
Costs to convert to circulating coins composed of alternative metals given the following possible changes to coins:
Visual changes, such as color and relief
Transition time needed to introduce a circulating coin composed of an alternative metal.
Comments on how best to inform and educate both affected industries and the public on changes to circulating coins.
Environmental impact from the use of circulating coins composed of alternative metals.
Other issues of importance not identified above.
When commenting, note that the U.S. Mint said it is not considering aluminum alloy metals.
Responses are due to the U.S. Mint 60-days following its printing in the Federal Register (April 10, 2014 making the due date June 9, 2014). Electronic comments can be sent to Coin.StakeholdersResponse@usmint.treas.gov. If you prefer to send your comments the traditional way, mail them to Coin Stakeholders Response, Office of Coin Studies, United States Mint, 801 9th Street NW., Washington, DC 20220.
If you do comment and would like to share what you said with the rest of the community, either send it to me via email or post it as a comment below.
Photo credits: All photographs are the author’s except the image of the Toonie from the Royal Canadian Mint and the One-pound coin prototype from the Royal Mint.
The production and circulation of currency in the United States have been largely unchanged for decades, despite the growth in electronic financial transactions. Treasury is undertaking a comprehensive review of U.S. currency, including a review of both the production and use of coins, in order to efficiently promote commerce in the 21st Century. These studies will analyze alternative metals, the United States Mint facilities, and consumer behavior and preferences, and will result in the development of alternative options for the penny and the nickel.
Some of this has been ongoing for the last few years. As part of the Coin Modernization, Oversight, and Continuity Act of 2010, (Public Law 111-302 [PDF]), the U.S. Mint performed and Alternatives Metals study that was completed in August 2012 and then reported to Congress in December 2012.
The problem with the study is the politics written into the law which the report addresses in the executive summary. Key to the problem is the provision written into the law that gives too much consideration to the vending and coin-operated industry. Rather than find the best metals possible while considering the factors that would have to be changed to make new coins work in devices like vending machines, parking meters, and other machines that take coins for payment, the law is written as if the vending industry has veto power over the choices.
Reading the alternative metals report is like taking a college course in metallurgy. When reading the report, it is apparent that there is no perfect solution. Either the coin sizes and weights will have to change in order to meet electromagnetic signature (EMS) requirements to make new coins similar enough to provoke fewer changes to existing equipment or the EMS of the coins will have to change and the machines reprogrammed. In either case, something will have to change.
In short, the EMS is the waveforms that are sensed when a coin is exposed to low frequency radiation (harmless to humans). The waveforms are read by sensors and compared with a programmed baseline to verify that you dropped a real coin into the machine and not a slug.
As part of the alternative metal study, the U.S. Mint is holding a stakeholders meeting. Interested members of businesses, industries, and agencies will meet with the U.S. Mint study group to share their perspectives on the impacts of alternative metal compositions on circulating coins. This meeting will be held Thursday, March 13, 2014, from 10:30 a.m. to 3:30 p.m. (EDT) at the U.S. Mint Headquarters located at 801 Ninth Street NW, Washington, D.C., 2nd floor. Attendance is by invitation only. Anyone interested in attending can contact Leslie Schwager, Office of Coin Studies at OfficeofCoinStudies@usmint.treas.gov, or by calling 202–354–6600 no later than Monday, March 10, 2014 to request an invitation and obtain additional meeting information.
You can read the full announcement about this meeting in the Federal Register 79 F.R. 6672. [PDF]
Because of the recent storms and closing of the federal government, my work requirements have shifted making it difficult for me to attend. Anyone who will attend this meeting is invited to contact me. I would be interested in hearing all perspectives about the meeting.
Given the political nature of both the budget process and the law behind the alternative metals study, it is reasonable to believe that nothing will be accomplished by the president’s budget recommendation or the meeting at the U.S. Mint. In fact, since congress has to approve any changes to U.S. coinage and that this congress has been the least productive in history, do not expect change in your pocket change any time soon.
President’s Day is supposed to be the day that we celebrate the lives of the Presidents of the United States (POTUS). It became a holiday in 1968 when congress passed the Unified Monday Holiday Act (Public Law 90-363, S.cornell.edu/uscode/text/5/6103″ title=”5 U.S.C. 6103(a)” target=”_blank”>5 U.S.C. § 6103(a)) to standardize holidays on Mondays. Prior, most of the country celebrated February 22, George Washington’s birthday, as a holiday while some but not all states celebrated Abraham Lincoln’s birthday on February 12. The law made the third Monday in February the holiday.
There are few traditions for the holiday except for sales by various retailers. Prior to the 1980s, many stores closed on George Washington’s Birthday. But amongst the first retailers to introduce George Washington’s Birthday sales were the automobile dealers. This was a time that the automobile manufacturers were going through a transition to more fuel efficient cars. Style was an issue since many began to look “boxy.” Seeing the success of increased sales, other stores followed and it has become rare to see a store closed on Presidents’ Day.
Even with the Winter Olympic Games in progress, just going out for usual errands required patience as many people chose to partake in the usual weekend sport of shopping. Rather than get worked up, I decided that I would see what I could find in my change by paying using cash.
I set out on Saturday and Sunday emptying my pocket of change along with my plans for the day. A stop at the gas station, where I admit to paying with a credit card, a proper beverage for the day (tall, 3-shot, extra hot, skim latte), and a stop at the bank for cash, I went on my way.
After two days of paying in cash, I counted my change. While collecting almost $18 in coins, I was surprised to find nothing remarkable. There were a few copper (pre-1982) Lincoln Memorial cents, but nothing that would give this post an interesting climax.
However, there was on interesting omission: no 2014 coins. In the half-dozen shiny, very red cents I found, all were 2013 cents except for one dated 2012. Those very shiny nickels were almost all dated 2013-D and there were no dimes newer than 2011. Similarly, the only of the National Parks quarters I found was a 2013 Fort McHenry quarter.
I also found three very shiny 2009-D Guam quarters and a mix of other circulated state quarters along with two pre-1999 quarters with the eagle reverse.
Under the guise of “A penny saved is a penny earned,” the entire lot was put into a container that sits on top of my dresser. When the container is full or in December, whichever comes first, I will bring the coins to a bank’s coin counter and donate the money to a worthy cause making the weekend’s activity worth something.
Two discussions that transcended numismatics is what to do about the one dollar coin and common one-cent coin. Both coins cause different problems depending on who is doing the arguing. I find it amazing that the logic that is used to support the argument is not used consistently.
Dollar coins have been around since the beginning of the republic. In fact, the coin that currently holds the record for being the most expensive coin sold at auction is a 1794 Flowing Hair dollar. The coin is reported to be amongst the first dollar coins minted at the newly created Mint was bought by Legend Numismatics for more than $10 million. Laura Sperber, one of the principals of Legend Numismatics, was quoted as saying that she was prepared to bid higher for the coin.
If that is not enough to show how important the dollar coin has been in our history, there is always the 1804 Bust dollar, also known as “The King of Coins.” The U.S. Mint ceased to strike dollar coins in 1804 because of hoarding when the price of silver rose. The dollars that were struck in 1804 were struck using dies dated 1803 and are indistinguishable from the coins struck in 1803. The U.S. Mint continued to strike “minor coinage” to encourage circulation.
In 1834, eight dollar coins were struck with the 1804 date to include in a special set created as a gift for the King of Siam (the area known today as Thailand). One coin was included in the set, one was retained by the U.S. Mint for its collection that is now part of the National Numismatic Collection at the Smithsonian National Museum of American History, and the six others were kept as souvenirs by Mint officials and eventually landed in private collections. Between 1858 and 1860 seven more specimens were surreptitiously by U.S. Mint employee Theodore Eckfelt. It is alleged that Eckfelt created 15 coins. Six are in private collection, one is now part of the National Numismatic Collection and the others were reported to be destroyed when seized by the government.
The Coinage Act of 1873, known as “The Crime of ’73,” ended the free coining of silver and put the United States strictly on the gold standard until the western states where silver was being mined became upset. Two weeks later, congress passed the Bland-Allison Act to required the Department of the Treasury to buy the excess silver and use it to strike the Morgan Dollar. Morgan dollars, especially those struck at the branch mint in Carson City, Nevada are popular with collectors because of their ties to the days of the old west. Collectors can find quite a few nice examples of Morgan and the Peace dollars that were struck from 1921 through 1938 because many did not circulate. These coins were held as backing to silver certificates in circulation and did not get released to the general public until the GSA Hoard sales that begin in the 1960s.
Such a colorful history also has a downside that is used as fodder against the dollar. After ending the production of the Peace dollar in 1938, no dollars were struck until 1964 when the U.S. Mint struck 316,076 1964-D Peace dollars in May 1965. The coins were never put into circulation and the entire population of 1964-D Peace dollar were allegedly destroyed. There have been reports that some Peace dollars were struck using base metals (copper-nickel clad) as experimental pieces in 1970 in anticipation of the approval of the Eisenhower dollar. The same reports also presume these coins have been destroyed.
The Eisenhower dollar was not well received because of its size. The 38mm coin was seen as too big for modern commerce and with the exception of dollars struck with the special bicentennial reverse in 1975 and 1976, most coins did not circulate.
The Susan B. Anthony dollar coin was introduced in 1979 with much fanfare for being the first coin to honor a woman. The coin was a failure because it was confused with a quarter
To try to improve circulation someone came up with the idea of the small dollar as part of an attempt to honor suffragette Susan B. Anthony. The copper-nickel coin was very close in size to the Washington quarter, had reeded edges like the Washington quarter, and on a simple glance was consistently confused with the Washington quarter. I even have heard coin collectors use the fiasco of the Susie B.’s as a reason not to pursue the dollar coin.
Since the introduction of the Sacagawea dollar in 2000, the dollar coin’s size has remained the same but with the addition of manganese has a golden color to be visually different from other coins. For the visually impaired, the reeding was removed from the edges. Today, the Presidential $1 coins and the Native American $1 Coins have edge lettering that keeps it tactically different from the quarter dollar. However, people continue to bring up the Susan B. Anthony dollar as a reason not to use dollar coins.
Historically, dollar coins has been more popular in the western regions of the United States where the east prefers paper. Financial centers and big city government prefers paper for its alleged ease of handling. When circulated side-by-side, the public tends to choose paper over coin.
When we look around the world for examples of how to handle this situation, we find that the United States is the only country where the unit currency is available in both paper and coin. Other countries did not give people a choice. Rather, their governments made a decision based on overall economic benefits of using a coin with a predicted 30-year lifespan over paper currency that can last 18-24 months in circulation. Instead of the argument being of practical economics where every other country and the European Union have put on their proverbial long pants and made a decision that is in their best economic interest, factions in the United States comes up with mind boggling arguments of alleging that taking the paper dollar away is akin to taking away our freedom.
Obverse of the 2013-S Lincoln proof cent. Lincoln’s portrait, designed by Victor D. Brenner in 1909, is the longest running design of any United States coin.
Then why is that not an argument that can be used to figure out what the do about the one cent coin? Are we not giving up the same freedoms by forcing those who pay for good and services using cash to sacrifice their ability to pay what is due and not over pay?
The United States has a history of using its currency to boost the economic status of its citizens, aside from the various silver laws and the laws that eventually took the United States off the gold and silver standards, the creation of the half-cent was made because of the economic status of its citizens. Following Alexander Hamilton’s Treasury Secretrary’s report to congress “On the Establishment of a Mint,” Secretary of State Thomas Jefferson had another idea. Jefferson thought it would be better to tie subsidiary coins tied to the actual usage of the 8 reales coin. At the time, rather than worry about subsidiary coinage, people would cut the coin into pieces. A milled dollar cut in half was a half-dollar. That half-dollar cut in half was a quarter-dollar and the quarter-dollar cut in half was called a bit.
The bit was the basic unit of commerce since prices were based on the bit. Of course this was not a perfect solution. It was difficult to cut the quarter-dollars in half with great consistency which created problems when the bit was too small, called a short bit. Sometimes, short bits were supplemented with English pennies that were allowed to circulate in the colonies.
As an aside, this is where the nickname “two bits” for a quarter came from.
Jefferson felt that in order to convert the people from bit economy to a decimal economy, the half-cent was necessary to have 12½ cents be used instead of a bit without causing problems during conversion from allowing foreign currency to circulate as legal tender until the new Mint can produce enough coinage for commerce.
The half-cent would come into focus in the 1850s when the cost to produce the United State’s copper coins was nearly double their face value. In 1856, the Mint produced the first of the small cents, the Flying Eagle small cent, and produced 700 samples to convince congress to change to the small cent. As part of the discussion was the elimination of foreign currency from circulation making the U.S. Mint the sole supplier of coins.
There is no record of outcry from the public on the elimination of the half-cent. Its elimination came four years after the Coinage Act of 1853 that created the one-dollar and double eagle gold coins in response to the discovery of gold in North Carolina, Georgia, and California. The gold rush caused a prosperity and inflation that not only made the half-cent irrelevant but not something on the public’s mint. In that light, the Mint and congress felt that it just outlived its usefulness and would not be necessary with the elimination of foreign currency from circulation.
More controversy was generated in 1857 over the demonetizing foreign coins in the United States than the elimination of the half-cent. While the half-cent continued to circulate, it was estimated that one-third of the coins being circulated were foreign, primarily reales from Mexico. Redemption programs did not go smoothly, but in the end foreign coins were taken out of the market and the American people adapted and it could be said we prospered as a nation.
Like the 1850s, the last seven years have found that the cost of the copper used to make the one-cent coin has increased to more than the coin’s value. Combined with the labor and manufacturing costs, it costs the U.S. Mint between 1.6 and 1.8 cents for each copper-coated zinc cent struck. Although people argue that the cent is not needed and is barely useful, the U.S. Mint reports that 65-percent of its production are for one-cent coins that are ordered by the Federal Reserve to be circulated in commerce.
Eliminating the cent has caused controversy from those concerned with the economic welfare of the less fortunate. Many are using the same arguments that Jefferson made in 1791 to create the half-cent in order to keep the one-cent coin in circulation while others point to what other countries are doing. Canada is currently the country with the largest economy to eliminate its lowest denomination coin. Proponents of eliminating the cent point to Canada’s rocky success (withdrawal of the cent had been delayed twice) as an example of how the United States can handle the situation.
Canadian 1-dollar and 2-dollar coins. The 1-dollar coin is called a Loonie because its reverse depicts a common loon. “Toonie” is a play on the Loonie nickname.
Canada also does not circulate paper currency smaller than their 5-dollar banknote. Rather than paper (or polymer as they are converting away from rag-bond paper), Canada circulates a one-dollar (Loonie) and two-dollar (Toonie) that is regularly used in commerce. The Bank of Canada is also considering eliminating their 5-dollar note in favor of a 5-dollar coin that would be produced by the Royal Canadian Mint for circulation.
Suggesting that if the United States follows Canada’s lead in the elimination of the cent, should the United States follow Canada’s lead and eliminate the one- and two-dollar Federal Reserve Notes in favor of one- and two-dollar coins?
This debate will continue until someone decides to act like an adult and make a definitive policy decision—especially when the Fed publishes a “working paper” that cherry picks facts to support a specific viewpoint.
Image of the Susan B. Anthony dollar and Lincoln cent courtesy of the U.S. Mint.
Image of the Canadian Loonie and Toonie courtesy of Noticias Montreal.