1902 Panama 2½ Centesimos on the left. On the right is a national brand coated aspirin.
Johnny: Making a Mint for $200
Alex: It’s the smallest coin struck by the U.S. Mint.
BEEP!
Johnny: What is the dime?
Alex: No, I’m sorry.
BEEP!
Alice: What is the penny?
Alex: Sorry, that’s not it either. Pat, do you want to guess?
BEEP!
Pat: What is the gold dollar coin?
Alex: No. The correct answer is “What is the 1904 Panama 2½ Centesimos coin?”
Weighing in at 1.25 grams, containing .900 silver (1.125 grams of silver), and measuring 10 millimeters in diameter, the coin nicknamed the Panama Pill is smaller than the silver three-cent piece, which was 14 millimeters in diameter, and the small gold dollar (Type 1) that was produced from 1849 through 1886. The gold dollar weighed 1.67 grams and was 15 millimeters in diameter.
Although there are smaller coins, such as the 9.09 millimeter Maximillian coin struck by the Mexico City Mint, this is the smallest ever produced by the U.S. Mint.
After Panama gained its independence in 1904, the new government made the decision to convert its monetary systems from the Columbian peso the balboa. Named in honor of the Spanish explorer Vasco Nunez de Balboa, the balboa would be subdivided into 100 centesimos to use for commerce. But Panama faced a similar problem that the United States faced over 100 years earlier. Since commerce was based on the Spanish Milled Dollar, which was 8 Reales, it was common for the coinage to be divided by 8 rather than 10. Simply, if something cost 1 Reale, referred to as 1 bit for when the milled dollar was physically cut for smaller denominations, a direct conversion would mean that an equivalent to the bit would be 12½ centesimos.
The United States solved this problem by striking the half-cent coin. Panama opted to strike a 2½ centesimos coin that would be paired with the 5, 10, 25, and 50 centesimos coins, all produced by the U.S. Mint. Rather than continually produce these coins until the bureaucracy caught up with commerce as was the case in the United States, Panama ordered 400,000 of these coins. The Panamanian people adapted to the new currency system, making this a one-year type coin.
During our monthly coin club meeting some members bring coins and boxes of foreign coins for other members to pick though. I went to the table where a member brought a box of loose foreign coins and someone found the Panama Pill in the box. Having never seen one before, when the searcher passed on the coin, I took the opportunity to purchase it.
Panama Pill next to a 1963 Sweden 10 Øre coin
Just for fun, I searched for the next smallest coin in the box. This found a 1963 Sweden 10 ore coin. It is 50-percent larger than the Panama Pill at 15 millimeters but is only slightly heavier at 1.4 grams. The difference is that the Pill was made of silver and the 10 ore is copper-nickel.
Having time to search a box of foreign coins can be a lot of fun. Things you read about in history books, read in the newspapers years ago, and nice designs can be found on many foreign coins. Even though the Eurozone uses a common currency with a country specific reverse, there is nothing like some of the coins that the individual countries produced before creating a common currency.
In that light, our top story of the night, Generalissimo Francisco Franco is still dead.
Usually, I open the month with a report on the coin-related legislation from last month. In August, congress went on their summer vacation and did not work on any legislation. There are many who think that given the way congress has done little to nothing over the last few years, this may have been a good thing. When congress returns after Labor Day, there is work on their schedules. While I expect the same level of non-work as before their vacation, there are the issues that have a high probability of being worked on.
H.R. 2722: Breast Cancer Awareness Commemorative Coin Act
Sponsor: Rep. Carolyn Maloney (D-NY)
• Introduced: June 10, 2015
• Passed the House: July 15, 2015
• Received by the Senate: July 16, 2015
• Referred to the Senate Banking, Housing, and Urban Affairs Committee
• Summary:
2018 Commemorative program
50,000 $5 gold coins with $35 surcharge
400,000 silver $1 coins with $10 surcharge
750,000 clad half-dollars with $5 surcharge
Surcharge paid to Breast Cancer Research Foundation for the purpose of furthering breast cancer research
Aside that this would be a swan-song for an a long-serving representative that is retiring, even after the argument about who should receive the money the concept is popular in congress. It is likely to pass the Senate either as a formality or under a suspension of the rules with only a voice vote taken. If there are any votes against this bill, it will be from the senators who have said that they are against using commemorative coins as a fundraising mechanism (see H.R. 3097).
H.R. 1698: Bullion and Collectible Coin Production Efficiency and Cost Savings Act
Sponsor: Rep. Bill Huizenga (R-MI)
• Introduced: March 26, 2015
• Passed the House of Representatives on June 23, 2015 by voice vote
• Received in the Senate on June 24, 2015 and referred to the Committee on Banking, Housing, and Urban Affairs
Back in February, I wrote that congress was being lazy and that as members and their staffs were writing commemorative coin acts, they were copying from old legislation. While this makes it easy for them to deal with, the U.S. Mint has asked that this be changed to save money. Time and again, congress has been told that the U.S. Mint could save money if they standardized gold coins to 24-karat coins and silver to at least .999 fine quality. Aside from making the coins more attractive to more buyers including investors, the U.S. Mint does not have to pay more for someone to “dirty” the metals to create planchets that contain 90-percent of the metals.
This bill should be easy for congress to deal with. It does not spend any taxpayer money and has the ability to add money to the General Treasury. Since H.R. 1698 has passed the House under suspension of the rule (voice vote), it should not have problems in the Senate.
An issue that is likely to be raised that has been a part of a lot of bills is the elimination of the paper $1 note. This came up again when Sen. John McCain (R-AZ) was unequivocal about seeing the $1 note retired in favor of a coin. McCain has supported this type of legislation in the past but his going out of the way to emphasize this as an issue makes it interesting. As one of the oldest members of congress, his opinion is a minority of those of his generation. Surveys have shown there is a clear generational divide as to who supports this measure. When, the Baby Boomers (those born before 1964) and those older are overwhelmingly not in favor of eliminating the the paper note. The GenXers, those born 1965-1980, are almost evenly divided while the Millenials, those born since 1980, do not care because they are mostly tied to their credit and debit cards.
For the longest time, the Massachusetts delegation have held these types of bills back. This is because the Dalton, Massachusetts based Crane & Co., the maker of currency paper, has been the exclusive currency paper supplier to the Bureau of Engraving and Printing since 1879. Although Elizabeth Warren (D-MA) has become a more powerful figure in the Senate, she does not have the gravitas of a previous holder of that seat, the late Sen. Ted Kennedy (D). Additionally, with John Kerry now the Secretary of State and other changes in the House, like the retiring of Barney Frank (D-MA), the Massachusetts delegation does not have the same power as it once had. The only power the Senators have would be to filibuster any measure that would eliminate the $1 note. Whether they will do this remains to be seen.
Reference price of metals for this post (does not update)
It has been a while since I tried to make sense of the metals markets for numismatics. Then again, it has been said that even the professionals cannot make sense of the markets, how do we expect an amateur to do so. After all, it was not long ago when analysts were asking when, not if, gold will hit $2,000 per ounce and silver will be $50. As I type this the spot price of gold is $1137.40 per ounce and silver is at $14.68.
Watching the price of gold has been interesting. Since the release of the 2014 50th Anniversary Kennedy 2014 Half-Dollar Gold Proof Coin when the price of gold was set based on the $1,290.50 spot price, the trend of gold prices has been to go lower. Gold spot hit a low almost one year to the day of the release of the Kennedy gold coin on August 5, 2015 at $1,085.10. It has taken three weeks to bounce back a little.
Gold Chart for August to date (does not update)
I call silver the precious metal for the masses. Aside from being less expensive it is still considered a valuable commodity. Aside from the aesthetics of the color (I love the look of chrome on cars) you can really see a great design on a larger silver coin than a gold coin for a lower cost. For example, I like the look of the larger Silver Panda over the yellow gold Panda—and it is cheaper!
While my interest is more of aesthetics and the costs between purchasing the different types of coins, you can get into a situation where the composition determines the price of a coin. After all, the most expensive coin to sell at auction was a 1794 Flowing Hair silver dollar with a rare die variety. For a non-precious metal coin, you can always look at the 1913 Liberty Head Nickels whose composition is 75-percent copper and 25-percent nickel. Sales of these coins have averaged around $3-5 million in the last few auctions.
Rare and key date coins notwithstanding, more people can afford silver than gold. As a result, we have seen a rise in the collecting of silver non-circulated legal tender (NCLT) coins. Although I am not a fan of many of these designs, the various mints creating them would stop if there was not a market for them. Since this is what people are buying, the mints are striking.
To some degree, the price of silver may be inconsequential to the cost of some of these NCLT sets. Coins like the Looney Tunes and DC Comics sets from the Royal Canadian Mint; Star Wars, Disney, and Dr. Who sets from the New Zealand Mint are priced to include royalties that will have to be paid to their respective copyright holders.
Royal Canadian Mint’s $100 Looney Tunes 14-karat Reverse
Could this Looney Tunes Silver Kilo coin be on your list?
Then there are the countries of Somalia, Niue, Tuvalu, and the Marshall Islands that do have their own mints but license their names or contract other mints to strike coins for them. Even though these coins may not require licensing fees, many are made with popular themes to entice collectors to purchase them. Seigniorage then goes to both the mint striking the coins and the general treasuries of country whose name is on the coin.
2007 Somalia Motorcycle Coins
2010 Somalia Sports Cars
Most mints will float the price of their bullion coins to reflect market forces but not the price of NCLT coins. Even the U.S. Mint does not adjust the price of commemorative coins if the price of the metals drops.
While there are collectors that view their collection in terms of its value and others collecting as an investment of those of us who collect for the sake of collecting, the dropping of metals prices can be seen as an opportunity to buy some nice collectibles cheaper than otherwise. However, never underestimate the greed of some of these mints and the companies that sign agreements with them that will keep your prices high.
I wonder how these coins will fare on the aftermarket in the future?
Over the last few years, the U.S. Mint has been trying to process orders via the web and not being successful. Their website fails when they try to sell limited production items and the site gets slammed by collectors and dealers trying to place orders.
We saw this recently when the main website, www.usmint.gov crashed during the sale of the Eisenhower Coins and Chronicles set because the U.S. Mint did not build enough capacity. We know this because if you went to catalog.usmint.gov you were able to complete your order.
Another problem is how to handle the production of special products, such as a reverse proof dollar or enhanced uncirculated coins. Maybe a poll for another day would ask if it is a good idea to change how the U.S. Mint issues these special strikes.
What should the U.S. Mint do? How should they fix the problems? Take the poll and add comments below. If you have another suggestion, add it to the comments, too.
How should the U.S. Mint fix its product ordering process?
Just fix the darn website! (81%, 21 Votes)
Go further back to old school and do mail order only. (12%, 3 Votes)
Since the U.S. Mint cannot get the web right, go back to telephone ordering. (4%, 1 Votes)
Forget it... it's a lost cause. I'm going to take my chances on the aftermarket. (4%, 1 Votes)
Sell only through authorized dealers. (0%, 0 Votes)
Every evening I empty my pockets and look at the change that I accumulate during the day. Since I almost exclusively use cash (it is safer than credit cards), I end up with at least a dollar in change. Last week, I pulled out my change and took a glance and saw a nickel that was a bit darker than the others.
Moving it aside so I can look in a better light, I was able to separate a bicentennial quarter and wheat back cent from the other coins before dumping the rest into a pitcher I keep on my dresser. After dropping the quarter and wheatie into a bank where I save these coins, I picked up the dark nickel and went to find a better light.
To make things easier I looked at the reverse to see if it was I suspected and found a large “P” over Monticello confirming that I found a war nickel. For the date, I needed to find my loupe to help my aging eyes focus to tell me that I found a 1942-P war nickel.
1942-P Jefferson “War” Nickel obverse
1942-P Jefferson “War” Nickel reverse
War nickels were struck by the U.S. Mint from mid-1942 through 1945 of an alloy that contained 56-percent copper, 35-percent silver, and 9-percent manganese. Removing the nickel and reducing the amount of copper used in these coins helped save these metals so that they can be used to produce military supplies. One specific need was the copper that went into the brass alloy used to produce bullets.
Looking at the coin and various grading images, if I sent it to a third-party grading service to be graded, it would probably be returned as a VG-8 since it has a little more definition than a flatter G-4. It could be argued that since the rims are more defined that it could be closer to a VG-10, but I would not represent this coin at that grade—besides, it is not for sale! Given that, what kind of profit did I made over the 5-cents face value.
According to the NumisMedia Price Guide, the current value of a 1942-P war nickel in VG-8 condition is $1.01. That is a 96-cent profit!
But what about the silver value? As I type this, Coinflation reports that the metal value of the coin (at the time writing this) is 85-cents with the silver value of 84-cents. That price is based on 0.0563 troy ounces of silver with the current price of silver at $14.88 per troy ounce.
Either way, I made a small profit on the coin and will add it to my hoard of interesting pocket change finds.
As part of my perusal of the Internet looking for numismatic-related stories, I stumbled upon an article at the website for The Guardian about the Royal Mint’s operating income and profits. The story touted how the Royal Mint, whose history can be traced back over 1,000 years, increased over 70-percent from the previous year.
Using The Guardian’s reporting, I wondered how the Royal Mint would stack up against the U.S. Mint. Even though the story was published on July 23, 2015 and the U.S. Mint’s data is for Fiscal Year 2014 that ended on September 30, 2014, I am using the conversion rate of at the time I write this of £1 is equivalent to $1.55.
Revenues
The Guardian reported that the Royal Mint earned £260 million in revenues. This is equivalent to just over $404 million. In contrast, the U.S. Mint boasted revenues of over $3.1 billion or a bit over £1.995 billion. Yes, that is BILLION with a “B.” While the Royal Mint’s revenue was depicted as being the most in the institution’s history, the U.S. Mint’s record revenues came in 2011 when it earned $4.970 billion.
Profit
What good is making money if there are no profits. The Royal Mint reported a record profit of £11.5 million or just over $17.7 million. The U.S. Mint did slightly better by reporting a seigniorage of $367.9 million or more than £236.756 million. Even if you take it as a percentage, the Royal Mint’s profit margin is 4.38-percent while the U.S. Mint has a profit margin of 11.86-percent.
Benefit to their respective governments
The Royal Mint is wholly owned by the British Treasury. They pay a £4 million ($6.218 million) dividend to the British government. By law, the seigniorage earned by the U.S. Mint is deposited in their Public Enterprise Fund. The Treasury Department requests a budget for the U.S. Mint which is then approved by congress. The funds are withdrawn from the Public Enterprise Fund. Allowing for overages, the Secretary of the Treasury then transfers the rest of the money to the U.S. General Funds where it is used to pay whatever the government needs. In 2014, $272 million (£174.971 million) was deposited into the General Funds, more than 43-times the dividend that the Royal Mint pays the British government.
The U.S. Mint is the most profitable agency in the United States government. No other mint in the world can match the U.S. Mint’s production, income, and profit. The U.S. Mint even out performs private industry. The average profit margin in the United States is 5.1-percent.
The next time someone complains that it costs too much to make a specific coin, remind them that the U.S. Mint provides more benefit to the government than the loss of a little profit on a few coins.
Royal Mint logo courtesy of the Royal Mint. U.S. Mint seal courtesy of the United States Department of the Treasury.
The other day I walked into the office of a big-shot producer and pitched a story for a movie that had the possibilities of a sequel. Here is the story I pitched:
Our story opens in Philadelphia where the U.S. Mint is striking 445,500 double eagle coins bearing the design by Augustus Saint-Gaudens.
Flash to Washington where President Franklin D. Roosevelt signs Executive Order 6102 that banned the private use of gold for currency.
Transition back to Philadelphia where a shadowy figure, presumably the U.S. Mint’s cashier, is locking the doors of the coin room but is clearly clanking coins in his pocket.
Watch as the cashier grabs his coat, hat, a small bag and leaves the Mint. He walks to the Philadelphia’s diamond district where he knocks on the backdoor of jeweler Israel Switt. Switt opens the door and the two men talk. Switt hands the cashier a bag and the cashier hands the bag he was carrying to Switt then leaves.
Fast forward to 1944. An emissary for King Farouk of Egypt is meeting with someone at the State Department to obtain permission to export a 1933 double eagle to Egypt for his vast collection. Not knowing whom to call, the State Department worker calls the Smithsonian who verifies the coin that leads to an export permit.
Next, a series of investigations and stories about the seizing of 10 double eagle coins that the Secret Service says should not have left the U.S. Mint. This part of the story goes to 1952.
Scene is the famous Waldorf-Astoria Hotel in New York in 1996. British coin dealer Stephen Fenton is attempting to buy a 1933 double eagle when the Secret Service interrupts the transaction and arrests him.
Attorney Barry Berke helps get Fenton out of jail and begins to build a case against the government. The defense claims that King Farouk of Egypt legally exported the coin. Some court drama and negotiations lead to charges against Fenton being dropped but the coin not returned to Fenton.
The scene is Federal Court in Manhattan where Berke is negotiating a settlement with federal attorneys. Finally, in July 2001, both sides agree that the coin would become federal property and sold at auction. The Fenton and the government would split the proceeds of the auction. The government required the buyer pay an extra $20 to officially monetize the coin.
Flash to the World Trade Center where the coin is removed from a safe and transferred to the government.
Brief pause for a scene about the destruction of the World Trade Center.
Fade to Southeby’s Auction on July 30, 2002 where the coin sells for $6.6 million plus a 15-percent buyer’s premium. After the auction Stephen Fenton received $3.3 million. Another $3.3 million was deposited in the federal treasury. Southeby’s and their auction partner Stack’s earned $990,000. The president of Southeby’s will pull $20 out of his pocket and hand it to the government’s representative to monetize the coin.
New scene is in a dark basement in Philadelphia. Joan Langbord, Israel Switt’s surviving daughter, will be opening boxes as if she was looking for something. Soon she would find a bag with ten 1933 Saint-Gaudens double eagle coins.
Langbord contacts the U.S. Mint and hands the coins over for authentication. In July 2005 they determine the coins are real and confiscates them.
Langboad contacts Berke to help recover the coins.
First trial occurs in July 2011, which leads to a unanimous decision against Langbord who was joined by her sons in the lawsuit. The elderly Langbord did this to protect the family’s interest.
Scene changes to the transfer of the ten coins to the Bullion Depository at Fort Knox, Kentucky.
Langbord appeals and a three-judge panel will vacate the forfeiture and order the government to return the coins.
The government appeals and asks that the return order be vacated in order to appeal the decision. Rather, the Chief Judge of the Third Circuit will stay the order and ruled that the appeal will be en banc, meaning that the appeal will be heard before the entire bench of judges this year.
Fade to the image of the ten coins in Fort Knox with the lettering “To be continued…” overlaying the screen.
The producer found the story so unbelievable that he threw me out of his office.
Just goes to prove that reality is weirder than fiction!
The term Dog Days goes back to ancient Roman times when calendars were measured by the stars. While trying to measure time, the hottest part of the summer would coincide with the brightest star, Sirius, being dominant in the sky. Sirius is part of the constellation Canis Major (big dog).
During the period from about 20 days prior to the height of Sirius to 20 days following, Canis Major would only appear with the sunrise and sunset. Because ancient Romans thought Sirius contributed to the heat and humidity, this period would be called the Dog Days.
Today’s society has attached many meanings to the Dog Days of Summer. In baseball, it is the jockeying for position to get ready for the pennant races. Football begins training camps, politicians warm up to run for office (sometimes a year early), and the temperatures are rising with the east getting too wet and the west not getting wet enough.
These contrasts illustrate a congress that sometimes looks like they are really trying to do something and then really trying to put the “fun” in dysfunctional!
In July, it looks like congress really tried to do some work. Here are the coin-related legislative actions from our from our representatives on Capitol Hill:
It’s the law!
H.R. 893: Boys Town Centennial Commemorative Coin Act
I think I covered all of the options. If I have not or you want to add more commentary, even (especially) if you disagree with me, then leave a comment. Remember, the only comments I reject are for bad language and spam. Keep it clean and it will appear as soon as I can get to them.
Are you going to buy the new 2015 American Liberty High Relief Gold Coin?
Yes, I cannot wait! (50%, 36 Votes)
No, because the gold coin is too expensive (25%, 18 Votes)
Yes, but I also do not like the design (11%, 8 Votes)
No, because I am not interested (7%, 5 Votes)
No, because I think the coin is ugly (7%, 5 Votes)
What is going on at the U.S. Mint? For an organization whose actions are micromanaged by law seems to be finding a way to get around those rules to make some real questionable decisions.
2015-S Saratoga National Historical Park Quarter
First, the U.S. Mint begins production of uncirculated San Francisco struck America the Beautiful Quarters in 2012 leaving the coins of the first two years of the program out. Collectors of the entire set will have two uncirculated options for 2010 and 2011 but a partial set for the rest of the program. Why start something like this in the middle of the program?
Just before the release of the S-mint quarters, the U.S. Mint changed its branding and changed the design of the Presidential $1 Coin Cover. Those of us who collect the coin covers now have two different formatted designs that shows when you show your 2010 Abraham Lincoln cover followed by the 2011 Andrew Johnson cover. And the change puts a thick black bar across the bottom forcing the portrait to be reduced making it an ugly design.
2010 Lincoln First Day Cover (before branding)
2011 Andrew Johnson First Day Cover (after branding)
Although I love the reverse proof coins and do not think including them in special sets, such as the 2015 Reverse Proof Roosevelt Dime as part of the 2015 March of Dimes Special Silver Set, but there are persistent rumors of a Presidential dollar reverse proof set. Why add a reverse proof set in the middle of a series? What is the U.S. Mint thinking? Adding a reverse proof to an existing series is as wrong as the S-mint national parks quarters.
2015 American Liberty High Relief Gold Coin
Allegedly, there is “excitement” being made over the new 24-karat $100 Liberty gold coin. First, there was a lot of industry discussion on the $100 face value, which is irrelevant to the issues. What difference does the denomination make on a non-circulating coin? But am I the only one who thinks the image of Liberty looks like an anorexic weakling?
Look at some of the past images of Liberty and they have a stronger look. Two of the most famous by Augustus Saint-Gaudens and Adolph A. Weinman has a striding Liberty that shows character. George Morgan’s Liberty had a regal look and Anthony de Francisi’s Liberty on the Peace dollar is just a marvel of beauty. This image is so uninspiring that I would buy the coin only because it is the first year of issue and has some investment potential. Otherwise, if I were to invest in 24-karat gold coins I would continue to buy the American Gold Buffalo.
2015 American Liberty High Relief Gold Coin Reverse
The appealing feature of the coin is the eagle on the reverse. While there have been flying eagles on Christian Gobrecht dollar, James B. Longacre’s Flying Eagle cent, and Saint-Gaudens’ $20 gold coin, the new design brings forward the strength of the eagle gripping an olive branch to symbolize peace. Although the eagle depicted on Official Seal of the United States includes arrows in one of the eagle’s claws, modern sensibilities will prevent the symbolism that the arrows would depict.
I know that the designs were approved by the Citizens Coinage Advisory Committee and the U.S. Commission of Fine Arts. But, as usual, their motivations and sense of design is really in question. Maybe it is time we drop one of these committees and streamline the process.
Expanding collecting options from the U.S. Mint is good for the hobby. However, adding options to existing series and ugly coins should be discouraged.
Saratoga Park quater image courtesy of USACoinBook.com All other images courtesy of the U.S. Mint.
Usually, I open the month with a report on the coin-related legislation from last month. In August, congress went on their summer vacation and did not work on any legislation. There are many who think that given the way congress has done little to nothing over the last few years, this may have been a good thing. When congress returns after Labor Day, there is work on their schedules. While I expect the same level of non-work as before their vacation, there are the issues that have a high probability of being worked on.
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The other day I walked into the office of a big-shot producer and pitched a story for a movie that had the possibilities of a sequel. Here is the story I pitched:
The term Dog Days goes back to ancient Roman times when calendars were measured by the stars. While trying to measure time, the hottest part of the summer would coincide with the brightest star, Sirius, being dominant in the sky. Sirius is part of the constellation Canis Major (big dog).
