The Allegory of Liberty

The latest “controversy” surrounding the U.S. Mint is that the depiction of Lady Liberty on the new U.S. Mint 225th Anniversary 24-karat gold coin is depicted by an African-American woman.

This comes after 225 years of depicting Liberty as a white woman—or is it? (see below) What has caused even a bigger stir in some sectors was in the statement released by the U.S. Mint, they say that this “is the first in a series of 24-karat gold coins that will feature designs which depict an allegorical Liberty in a variety of contemporary forms-including designs representing Asian-Americans, Hispanic-Americans, and Indian-Americans among others—to reflect the cultural and ethnic diversity of the United States.”

I saw one blog post ask, “How dare they do this?” Followed by asking, “What’s next, a Mexican?”

If these folks would stop fomenting and learn a bit about history, this is part of the evolution of how we have depicted Liberty since the discovery of the New World

One of the first uses of woman as allegorical figures at back to the goddess of ancient Greece and Rome. Both gods and goddesses were allegorical figures of the power they represented using an exaggerated version of the human forms they knew about. Using woman as strong, matronly-like figures guarding over a country’s sovereignty like a protective figure.

Prior to the discovery of North America, Britain had Britannia. Britannia was the allegorical figure as the protector of the British Empire. Named for the Greek and Roman term for the geographical region, Britannia is usually seated facing the water. Although most images has her seated on a shroud-covered seat, sometimes Britannia is depicted sitting on a horse. She is wearing a helmet, hold a trident and a shield emblazoned with the Union Jack to show she is the protector and ruler of the seas. It is not a coincidence that Christian Gobrecht’s Seated Liberty design is similar to the design used for Britannia.

1672 Britannia copper coin

1854 Seated Liberty Quarter with rays and no arrows

When the first European settlers arrived, they used the image of an “Indian Queen, a voluptuous, but stern Native American woman dressed in little more than head feathers. Portrayed sitting astride a giant armadillo or sporting a tomahawk, the Indian Queen represented exoticism, danger and adventure: attributes that 16th- and 17th-century explorers most associated with their new land.”

As colonization grew and the native American tribes and the settlers were not getting along (you would also be angry if these outsiders were pushing you off your native lands), her looks were softened to look more Anglican in appearance trying to represent what was perceived as a less hostile look.

The look of Liberty has changed with the artist that have designed her image. The most famous image of Liberty is the statue by Frédéric Bartholdi titled “Liberty Enlightening the World,” or more commonly known as the Statue of Liberty. Bartholdi, a French sculptor, reportedly used his mother as the model for the statue’s face. This makes the most famous depiction of Lady Liberty a French woman.

Two of the most famous and different depictions of Liberty were created by George T. Morgan and Anthony de Francisci. Morgan used actress Anna Willess Williams as the model for his design noting that her profiles was the most perfect he had ever seen. For the Peace dollar, de Francisci used the portrait of his wife, Teresa, as the model. With rays instead of a crown or a headdress departing from previous designs, using the image of Teresa de Francisci means that an Italian-born woman was depicted as Lady Liberty since she was born in Naples, Italy.

1879-S Morgan Dollar

1921-D Peace Dollar

Historical Note

Many references claim that Martin Van Buren was the first U.S. born president because he was born in 1782, after the signing of the Declaration of Independence. However, the Treaty of Paris, which established the United States as a new country, was not signed until September 3, 1783. Although the colonies declared itself independent in 1776, the United States was legally not a country until the signing of the Treaty of Paris.

These are also not the first examples of someone not being born in the United States being depicted on U.S. coinage. In 1892 and 1893 the U.S. Mint produced the Columbian half dollars with the image of Italian-born Christopher Columbus. Although these coins were only struck as a commemorative, they were circulated and used in commerce. However, the first coin struck for circulation that included the image of a foreign-born person was the Washington quarter. George Washington was born in the British Colony of Virginia in 1732 as a British subject. In fact, the first nine presidents were born British subjects in the colonies. It was not until John Tyler succeeded William Henry Harrison as president in 1841 when a United States-born citizen became president. Tyler was born in 1790 in the State of Virginia.

Although there are many examples of African-Americans appearing on commemorative coins. In the Classical Commemorative Era, the U.S. Mint issued the 1946-1951 Booker T. Washington and 1951-1954 George Washington Carver/Booker T. Washington Commemorative half-dollars. Modern Era Commemoratives include the 1998 Black Revolutionary War Patriots Silver Dollar featuring the portrait of Crispus Attucks, 1997 Jackie Robinson commemorative coins, and 2007 Little Rock Nine Silver Dollar featuring the legs of the Little Rock Nine being lead to class.

For circulating coins, the reverse of the 2002 Missouri State Quarter features William Clark’s slave York paddling the canoe with both Meriweather Lewis and Clark in the boat. The reverse of the 2009 District of Columbia quarter honors Duke Ellington.

Do not forget that Sacagawea is a non-Anglican being featured on a circulating coin, even though the coin really does not circulate.

But is this the first African-American Lady Liberty?

1933 Saint Gaudens Double Eagle (obverse)

Finally, there is a claim that the model used by Augustus Saint-Gaudens for the design of $20 double-eagle gold coin was Harriette Eugenia “ Hettie” Anderson. Hettie Anderson was an African-American model from South Carolina considered an extraordinary beauty. Anderson was known to pose for Saint-Gaudens and many other artists with connections to Saint-Gaudens, such as Adolph Weinman.

Because of the treatment of blacks in America, Anderson’s part in Saint-Gaudens’ work was kept quiet. After his death, Homer, the artist’s son, edit Anderson out of his father’s unfinished autobiography. This information was later discovered by William E. Hagans. Hagen was researching the Swedish artist Anders Zorn, who worked with Saint-Gaudens. While reviewing Zorn’s work, he found a sketch Zorn made with Saint-Gaudens and a nude Hettie Anderson lying in the background. After further research, Hagen discovered that Anderson was modeling for Saint-Gaudens at the time he was designing the double-eagle. It was later that Homer Saint-Gaudens removed Anderson from the history of this coin’s design.

If this is true (see “Written out of History” on this page), then this is not the first time Lady Liberty was depicted as an African-American Woman!

Anders Zorn’s etching of Augustus Saint-Gaudens taken a break with a nude Hattie Anderson laying behind him.

Credits

  • Composite image of the American Liberty gold coin courtesy of coinews.net.
  • Image of Britannia coin courtesy of the Royal Mint.
  • Seated Liberty quarter image courtesy of Numista
  • Morgan and Peace dollar images courtesy of Wikipedia.
  • Anders Zorn etching of Augustus Saint-Gaudens image courtesy of Wikimedia Commons.

Certainty

Since the election, there have been a number of stories about the “Trump Effect” on the markets. The narrative is that the economic bounce is tied specifically to the election of Trump.

The premise is that the market is reacting to the election of Donald Trump and is the direct cause for the change in the economic factors in the markets. Unfortunately, the narratives being promoted is shortsighted. Markets are not reacting to the election of Trump. The markets are reacting to the certainty that the election is settled.

Markets hate uncertainty. When there is uncertainty, the markets tend to react to everything and sometimes in an exaggerated manner. Fortunately, the economic indicators have been good and the markets have reacted accordingly with exaggeration.

How the markets have reacted to uncertainty in economic news

When looking at the collecting markets, whether it is numismatics or antiques, you can look at the precious metals markets as a key indicator. In basic terms, the price of precious metals is indirectly proportional to the strength of the markets and economy. It translates to if the economy is strong making investing less of a risk, then the precious metals markets will be weaker. it means there is more cash circulating creating discretionary income that buyers use to spend on non-essentials, like hobbies.

A strong market and economy means that investments in businesses are a better bet. Strong employment numbers and the movement of goods and services mean that there is money to be made by investing in business. If there are good investment opportunities, it does not make sense for investors to tie money up in precious metals.

Investment in metals makes sense when investing in their value is better than the expected rate of return on business investments. Once investors turn to precious metals, the price is based purely on supply and demand. Since the supply stream is relatively constant, demand mostly influences the price of metals. If the demand is high and the supply cannot keep up with the demand, the price will rise. What helps regulate the price is that there continues to be a supply but the demand has been known to outpace the supply.

The fact of the matter is that economic indicators have improved. Prices of metals have been steadily dropping since August as the investment in stocks been going up. Even before the election, the markets were in growth mode but skittish with uncertainty.

All the election brought was a certainty. Markets know who the next president will be, who will be in congress, and who will control the state houses. If markets hate uncertainty then the currency that fueled the rally was the removal of uncertainty.

After the week following the election, the markets leveled off with the next goal to figure out what the Federal Reserve would do. With the uncertainty surrounding the December Federal Open Market Committee (FOMC) meeting, the drive to record levels stalled. When the FOMC announced the increase in interest rates, rather than reacting negatively, the reactions was as if the markets were saying, “It’s about time.” with the uncertainty of what the FOMC would do, the markets reacted by climbing to record levels.

Market reactions to various news and economic events

In the meantime, the metals markets have been on a steady decline. Since the capital markets are providing a good return on investments, there is no incentive to invest in metals. Although people are buying, the fewer buyers are beating the prices down making bullion-based collectibles cheaper.

Gold free fall began on Election Day 2016

Silver downward trend started on Election Day

What does that have to do with higher end collectibles such as rare coins?

When capital markets are adding to the general wealth of the investor community, they will look for different places to invest their winnings. The new money will start to buy high-end items to supplement their other investments. This is why the collector market thrives during good economic times. Prices of fine art, prime real estate, collector cars, and even rare coins rise.

Rare coins have been resilient since the decline in markets. Rare coins became a safer bet and have attracted new investors which has bucked the trends of the past. This was not lost on the broader investing community who may be looking for diversity in their portfolios.

In review, the markets have been on a six-year rise as the economy has recovered from the Great Recession. Economic indicators are on an extended positive run. The election created certainty in the future of the government and the Federal Reserve created certainty when it raised interest rates. Since markets like certainty, the reaction is not because of the result of the election it is that the election is over.

Certainty is driving the markets, not the details of the results.

Credits

  • Dow Jones Industrial Average charts courtesy of Yahoo! Finance.
  • Gold and silver charts courtesy of Kitco.

Vegans go overboard with polymer notes

Bank of England £5 Polymer note

I have a personal rule that I do not criticize anyone’s lifestyle choices or non-choices. It is not a matter of tolerance but one of respect because if I want acceptance for what I do then it is not my place to judge someone else. But I draw the line where tolerance is pushed beyond acceptance but an insistence that everyone adapt to their ways.

To be a vegan means that you do not use or consume any animal product. It is a movement that began in the 16th century but organized in the 19th century as part of a philosophy to reject the commodity status of animals. In fact, the term “vegan” did not enter the language in 1944 when Donald Watson co-founded the Vegan Society in England. Fundamentally, I do not have a problem with vegans or veganism but it has recently crossed the line where my tolerance is being tested.

In September, the release a new £5 polymer note featuring the portrait of former Prime Minister Winston Churchill. Even though there were concerns raised at the time of the release, in November, a vegan activist names Steffi Rox asked the Bank of England if the new £5 polymer note contains tallow on Twitter. The Bank of England responded that “there is a trace of tallow in the polymer pellets used in the base substrate of the polymer £5 notes.”

Which was followed up by Ms. Rox asking “what consideration was given to #vegans & their human rights in the making of these?”

This exchange reverberated around the world to all countries that use polymer notes including Australia that has been circulating polymer notes since 1992.

The Bank of England issued a statement confirming that the pellets used to make the polymer substrate contains trace amounts of tallow.

The new notes are produced on a product called Guardian manufactured by Innovia Security. Innovia is the company formed in Australia following the research and production of the polymer substrate by the Reserve Bank of Australia. Although Innovia has not issued a formal statement, press reports note that the company admits that tallow is used in the resin it sources from a supplier to make the polymer pellets used by the banks in the manufacture for the substrate that is printed for currency.

Tallow is made from suet, the fatty deposits around the organs of cows and sheep. It is a byproduct of the process of butchering a cow for its meat and hides. In its natural form, suet is only useful for cooking and some preservation. When it is rendered (by boiling) into tallow, it is used to manufacture soap, candles, and lubricants. The use of tallow in even the most synthetic lubricant is ubiquitous. Machines used to harvest crops or grease moving parts in automobiles have tallow in them.

Tallow is part of using the whole animal rather than killing it for parts and discarding the rest. It is the concept that animal rights activists preach. On this, I agree with their position.

But it isn’t like the Bank of England or Innovia is dumping tallow into its manufacturing process. Based on what how it was explained to me by a chemist familiar with polymer manufacturing but not associated with Innovia or the polymer banknote process, tallow is likely used in the resin as part of the pellet manufacturing process. The resin acts as a binder but has to manufactured in a way that prevents it from sticking to everything. Small amounts of tallow are used as a lubricant to make the resin to prevent it from sticking to the machinery. Trace amounts of tallow remain in the resin in the same manner oil would remain on your tires if you rolled over an oil slick on the street.

Just because there is oil on your tires does not mean your tires are made of oil. But the oil remains a trace element on your tires and continues to exist until removed using some type of friction. But it is such a small trace, you never notice.

The same can be said of the tallow. The chemist said that if there are more than 5 parts per million of tallow in the notes then that the manufacturing process should be questioned. Aside from suggesting the process is dirty the proportions may make the polymer unstable and less useful to use as currency. Its 25-year usage in circulation suggests that there are no problems in the manufacturing process.

To understand what 5 parts per million would mean, you can also think of it as one-two thousandth of one percent.

With all due respect to vegans, you are probably breathing more dander in a single day than you are touching tallow in all of the polymer banknotes that cross your paths. For those of us who know that tallow is used in all sorts of lubrication products, especially those used in transportation, you cannot get away from its use. It is everywhere. You need to better educate yourselves before taking a stand against one-two thousandth of one percent because you look like hypocrites.

Victoria Cleland, Chief Cashier at the Bank of England, presenting the Churchill War Rooms with their New Fiver

Images courtesy of Innovia Security.

Correction and Update on Jeppson’s position at the Mint

Rhett Jeppson, Principal Deputy Director of the U.S. Mint

I recently found out that I have been wrong about the employment status of Rhett Jeppson, the current Principal Deputy Director of the U.S. Mint. Previously, I said that Jeppson is a member of the Senior Executive Service, the government executive program. He is not. Jeppson is was appointed by the President of the United States.

When a representative of the U.S. Mint contacted me to clarify the error, it was not clear as to what authority that Jeppson could be appointed as a “Principal Deputy Director” without confirmation by the Senate. A public policy attorney working for a public watchdog group believes that the White House used their discretionary authority to transfer Jeppson’s position from the Small Business Administration to the U.S. Mint. Although this is not confirmed, there was no other logical that could be found based on the law and public filings.

The U.S. Mint has been without a permanent director since Edmund Moy’s resignation became effective in January 2011. When Moy resigned, Richard Peterson became acting director, which he could do for a limited time, then became Deputy Director but in charge of everything. While that is not the technically correct term, essentially, Peterson was the acting director.

In September of 2012, President Obama nominated Bibiana Boerio, the former Managing Director of Jaguar Cars Ltd., for director. Since her nomination had not been acted upon, her nomination died in committee when congress adjourned following the 2012 election.

Peterson remained, essentially, the acting director until January 9, 2015, when it was announced that Jeppson was joining the U.S. Mint as Principal Deputy Director. His formal nomination was announced on Friday, July 9, 2015. Finally, the Senate Banking Committee held a hearing for his nomination on the Ides of March, Tuesday, March 15, 2016. Since then, as congress has done for most things they did not have to do to prevent a disaster, sat on the nomination.

Essentially, the clock has run out on Jeppson’s nomination. It is likely his appointment will not be reported out of committee and, like Boerio, will see his nomination fade into the ether.

According to the U.S. Mint, Jeppson was asked to tender his resignation effective on January 20, 2017, as have all Obama Administration appointees. It will be up to the next president to determine whether he stays.

Your government at work.

VOTE!

Voting Coin TossThe election of 1800 was a rematch of the incumbent John Adams, the Federalist, and his Vice President and Democratic-Republican Party nominee, Thomas Jefferson. At the time, the president was elected with the most Electoral College votes and the Vice President was the candidate with the second most votes.

There were no rules on how the states selected electoral votes. Some states directly selected electors while others voted for the candidate whose party selected electors. It was 200 years before Florida would become an election issue but for this election, Georgia was the issue when its certificate of election was defective because it was not in the right format. But the President of the Senate, who was the election judge, counted the Georgia votes.

The race ended with Jefferson and Democratic-Republican Vice Presidential candidate Aaron Burr in a 73-73 tie. Since there was no clear winner, the fourth presidential election in the nation’s history set up an early test for the new constitution and was sent to the House of Representatives for resolution.

In 1801, when the House convened on February 11, the chamber was controlled by the Federalists. As the first partisan election, the Federalists were not happy with the choice causing some not to vote or vote against the candidate they liked the least. In 35 ballots over seven days, the vote was 8 states selecting Jefferson, 6 for Burr, and no result for Maryland and Vermont whose delegations tied.

During the votes, Alexander Hamilton, a Federalist, urged his fellow Federalists to support Jefferson. Hamilton thought Jefferson would be a better choice because “by far not so dangerous a man.” Hamilton was not as confident about Burr. Hamilton would later confirm his feeling on July 11, 1804.

After a letter writing campaign by Hamilton, the four delegates from Maryland that supported Burr shifted their vote to “no selection” as did the Burr supporters from Vermont, Delaware, and South Carolina. That would give Jefferson the vote from 10 states to become the third president of the United States.

If we learn nothing else from history, every vote counts. Go out and vote!

Image courtesy of iStock Photo.

Is numismatics really dying as a hobby?

Coin CollectionAlthough I owe you my impressions of the U.S. Mint’s Numismatic Forum, giving it the proper treatment I think it deserves has taken longer than expected. Rather, let me jump ahead to a recurring theme that takes over the conversation on the state of the hobby: Numismatics is a dying hobby of the old.

MYTH: Electronic transactions have taken over and hard currency is being used less.

FACT: Electronic transactions make up only 13-percent of retail purchases in the United States and 7.1-percent worldwide. Although the pundits like to point out that trillions of dollars change hands electronically, this includes non-consumer-related transactions such as bank transfers from one account to the other using the Automated Clearing House (ACH). If your paycheck is deposited directly into your account, it is transferred using the ACH system.

In real money, the International Monetary Fund estimates that the U.S. Gross Domestic Product (GDP), the total costs for all goods and services, to be $18,561,934,000,000 ($18.561 trillion). If 13-percent of that is electronic retail purchases, that means that $2,413,051,420,000 ($2.413 trillion) is made not using cash. What about the other $16.1 trillion dollars?

WMATA Smartrip CardDepending on which report you read, electronic transactions should grow at a rate of 8-10 percent annually. Even if the U.S. GDP is on a pace to grow by only 1.4-percent, adding about $250 billion in electronic transactions will not make a significant dent in the rate of electronic transactions.

Of course, the U.S. are not spending $16 trillion in cash transactions, but both the U.S. Mint and the Bureau of Engraving and Printing are on course for record production years. Year-to-date, the U.S. Mint has produced $870,133,500 in circulating coins (not including half-dollar, dollar, and commemorative coins). For Fiscal Year 2015 (October 2014-September 2015) the BEP produced $166,302,000,000 ($166.302 trillion) in currency (not including $2 notes). Although some of the currency does replace worn notes (the BEP reports that 90-percent of $1 notes replace damaged notes) and a significant portion of the $100 notes are shipped to banks overseas, which represents quite a number of transactions.

Although electronic payment options make up 13-percent of all cashless transactions you have to remember that this market barely existed a few years ago. Even as banks and large retailers push to increase the number cashless transaction, there are problems that society faces when moving to a cashless retail system. The biggest problem is one of scale. The United States makes more money, spends more money, trades more money, and has more economic impact than any other country in the world. It is the world’s single largest economy with a strong capitalistic culture where most of the commerce is done with small businesses. Amongst all business, 55-percent of retail merchants are cash-only enterprises. They are too small to consider paying the 3-to-5 percent fees for using a credit card, known as the “swipe fee.” Of those that do take credit cards, at least 36-percent require a minimum purchase.

MYTH: The sharing economy is turning the economic world upside down changing the way we will pay for goods and services.

Sharing EconomyFACT: Human beings have been sharing and trading goods and services from the dawn of time. You killed an ox and have the hide left over. I have a lot of fruit I picked that I cannot eat. I will give you an amount of fruit and you give me the hide. Money was created as a medium of exchange when I did not want your fruit but wanted some of the goods someone else had. It was the pre-historic version of the three-way trade.

Some of us grew up trading. I remember trading a Mickey Mantle baseball card for a Jerry Koosman and two Donn Clendenon cards —one from Houston and the other from Montreal, just after the Mets traded for Clendenon. I thought I gave the kid a deal because 1969 turned out to be Mantle ’s last year.

What has changed since I made the trade? There has been a tremendous change in technology. While we set the price for the baseball cards we traded, now there are price guides, electronic markets, auctions, and online trading sites. Even in other categories, you might place a classified ad in a newspaper or an advertising rag like PennySaver or something like Uncle Henry’s in Maine. Now there are sites like Craigslist, AirBnB, Uber and Lyft that expands the market.

Pundits like to point to the sharing economy’s growth. The problem with the reports is that this version of the sharing economy has gone from nothing to something with a lot of press coverage. Anytime there is something shiny and new it grabs the attention of the public before they move on to the next distraction.

We share numismatics all of the time. We go to shows and display our collections for competitions. We enter registry sets to try to create a nice collection or even worst collection with the advent of “low ball” sets of coins of very low grades. We blog and read about other’s collections. We post finds to public forums and sometimes bring our collections to show off at club meetings.

Sometimes we even trade. Have you traded a few Barber dimes for a Barber half because you needed the half for your collection? How about three Morgan dollars for an elusive 1921-S Walking Liberty half-dollar?

The only difference between this and the new sharing economy is the lack of computer interface. Sometimes that human interaction is more fun than hiding behind a screen.

MYTH: People, especially millennials are not interested in collecting anything.

New Zealand Mint produces Monopoly coins for the Island nation of Niue. Did you pass Go?

New Zealand Mint produces Monopoly coins for the Island nation of Niue. Did you pass Go?

FACT: The Hobby and Toy industry is estimated to be a $20 billion business with an estimated growth of 1.6-percent over 2015. Not all of the emphasis is on electronic games and gadgets. One study found that more money is pledged for projects on the crowdfunding site Kickstarter than any other category.

One of the fastest growing sectors of this market is board games. While some games do incorporate electronics into their play, this new generation of gamers is finding that social gaming can be as much fun as their online endeavors.

Numismatics has never been a welcoming hobby for the mid-to-lower level collector. Dealers who are older may have a difficult time relating to younger and, frankly, a non-white demographic (see my post about one such incident here). It has created a culture of cranky older Caucasian collectors who think that their way is the only way to collect.

It is not just the dealers. Mainstream publishers put a lot of effort into creating references and collecting supplies that satisfy the market as being pushed by the dealers. Even worse, while the American Numismatic Association does recognize other aspects of numismatics, the fact that most of the Board of Governors are in the coin business with years of experiences in the coin business, that becomes the focus of the ANA.

It is time for the industry and its representative organization, the ANA, to remember that numismatics is more than coins. Currency, exonumia, scripophily, and even military medals are all part of numismatics. Concentrating on coins, especially coverage of high-value sales scares off many novices who may be willing to look at coins as a hobby. When I go out to schools in the Washington, D.C. metro area, I will bring enough Metro (the local transit system) tokens for everyone in the class. After buying a bulk bag of tokens, I have plenty to give away along with the story of how they were once used. But it allows me to show the students that numismatics is more than coins. I explain how I sit at junk boxes and at the tables of token dealers to find items from my hometown of New York. When I show them four pages of 2x2s with tokens and medals from New York and say that in three years I may have spent as much as $200, they seem to understand that you can have fun without spending a lot of money.

MYTH: We lost those who collected the state quarters forever.

State QuartersFACT: We also retained a lot of those collectors. Unfortunately, we damaged many others.

What made the state quarter program popular was that the way it was administered made everyone a stakeholder. Rather than dictating the design, states were encouraged to allow public participation to help decide on their quarter’s design. Contests and state pride went into the quarters that allowed each state to celebrate their home state. Ordinary people were brought into the process and ceremonies held in each state announcing the designs and on the release of the quarters.

Of course, the state quarters were also the hobby’s demise as television hucksters sold overpriced junk surrounding the sets. Colored coins and “special” sets were sold at high prices with the hint that they would only increase in value. When these people tried to cash in on their “investment” they found they overpaid, became angry, and may not come back. During this time, the ANA was nearly non-existent in the education process as it was undergoing its own internal political battles. Without someone to help stand up for the hobby to help educate the public, the industry suffered.

Although the ANA has improved in many areas, it continues to be about coins with a slant toward classic (pre-1965) and rare coins. The only modern coins that seem to get any amount of respect from the community are commemoratives, bullion, and errors. With the so-called modern era being 52 years old, it is time for the old and crusty of the numismatics industry to either get on board with that it is new to the new collectors or maybe it is time to consider retirement.

The lesson I have learned in numismatics as well in my business of buying and selling collectibles is that in order to expand any hobby it has to be made into something personal. Sports collectibles sell memories of your heroes. Space collectibles sell the mystique of outer space. Automobilia seems to have a fascination for a lot of people even as what was considered modern nameplates like Plymouth and Pontiac have gone the way of DeSoto and American Motors.

Hobbies have to also be interesting. Is it really interesting to collect a series of all of the same coins where the only difference is the date or mintmark? Again, why does a collection have to be biased for coins? Can someone have fun collecting So-called dollars, transportation tokens, or even unusual coins? I think about how much fun Charmy Harker might have had to put together her award-winning exhibit Penny Potpourri with things made out of pennies. If you have not seen her exhibit, you can find images here. It has to be one of the best exhibits I have ever seen because it is unusual. I like things that are different.

In order to get people interested in the hobby, you cannot introduce it to them by showing a 1909-S VDB Lincoln cent or a 1937-D 3-Legged Buffalo nickel as an example. Not only are these coins difficult to find and less affordable, but not everyone may be interested. I like to use my two-pages of 2×2 holders with a set of transportation tokens with every letter of the alphabet cut out of the center, except “Q” and “Z,” along with some that have shapes. When I tell someone I paid around $50 for the initial investment and can buy most tokens for less than $5 each, they want to know how they could get started.

Here are some ideas to help you start a new collection. You can only use these if you do so by recruiting a friend or relative who is not currently part of the hobby:

  • If you want to start with coins, go find a folder of currently circulating coins and see who can fill their folder first only from pocket change. I recommend either Lincoln Memorial cents, which can be interesting finding S-mint circulating cents on the east coast, or Jefferson nickels (for fun, use Whitman Jefferson Nickel folder #2).
  • Another idea for collecting coins is to make a collection based on a theme. Ideas for themes can be the year you were born, coins with an animal like buffalos, or create a type set that represents some of the subtle changes in a long series like Lincoln cents.
  • There are more to exonumia than transportation tokens. If your state issued tax tokens in the early part of the 20th century then how about finding examples for a collection. Tokens are still being created for gaming, casino chips, parking tokens, or store tokens the pre-cursor to paper coupons. Advertising tokens can be a fun way to collect your hometown. Tokens with themes, shapes, and cutouts can be a lot of fun.
  • Go beyond tokens to encased coins. Encased coins have been used as a private commemorative, advertising, and I even found one for an electric supply company that promised money off if you returned it to their store.
  • You can collect elongated cents, also called squished pennies, from almost anywhere. Recently, I found a machine in the Philadelphia Mint’s gift shop. For 51-cents, each I was able to buy two souvenirs. Collecting elongateds also helps you keep the record of where you have been.

And I didn’t mention currency or scripophily. One cool idea would be to collect stock certificates representing what you might find on a Monopoly game board.

If you have other suggestions, send it as a comment!

Now go out and start a collection. Recruit a friend and do it together.

Selection of my New York collection

Credits

Cash is being called spooky!

Cash seems to be the new 4-lettered word.

Swedish CurrencyIn February, former Treasury Secretary Lawrence Summers authored an opinion article that appeared in The Washington Post calling for the end of high-denomination banknotes. Summers cites a paper that claims to make a compelling case to stop issuing high denomination notes and possibly withdraw them from circulation because of its use in crime and corruption because large denominations are easier to carry. The paper claims that criminals have nicknamed the €500 note the “Bin Laden.”

Last May, the European Central Bank announced will stop printing the €500 banknote by the end of 2018 when the €100 and €200 banknotes of the Europa series are planned to be introduced. Although the announcement did not quote the Summers article, the announcement had addressed some of the issues he addressed.

In June, Sweden became the first nation to announce a formal policy to become a cashless society within five years. According to reports, Riksbank, the Swedish central bank, claims that just under 2-percent of all transactions are made by cash. They expect that number to drop to one-half of one-percent by 2020. Most shops report that 20-percent of sales are made using cash.

Sweden may be an outlier. Globally about 75-percent of all sales are made using cash.

In the United States, it is being reported that some higher-end retailers have stopped taking cash.

Retailers have been looking to the convenience industries as an example of the future. There are parking lots that no longer take coins in their parking meters. Pay stations now only accept credit cards. Some toll roads now require a special transponder to be mounted in your car because there are no booths to collect tolls. Those transponders must be linked to a credit card. Airlines no longer take cash when you buy beverages or snacks on the plane because handling the change is too difficult.

New payment options have entered the market. Smartphone-based Apple Pay, Samsung Pay, and MasterCard Master Pass have worked to make it easier to separate you from your money by allowing you to wave your phone at the reader and pay. For most retailers, there is little they have to do in order to accept these payment methods as long as they are accepting chip-based transactions. Since the transaction cost to the retailer does not change, it is an incentive for them to accept these types of electronic payments.

Although electronic payment options make up 13-percent of all cashless transactions you have to remember that this market barely existed a few years ago.

Even as banks and large retailers push to increase the number cashless transaction, there are problems that society faces when moving to a cashless retail system.

The biggest problem is one of scale. The United States makes more money, spends more money, trades more money, and has more economic impact than any other country in the world. It is the world’s single largest economy with a strong capitalistic culture where most of the commerce is done with small businesses. Amongst all business, 55-percent of retail merchants are cash-only enterprises. They are too small to consider paying the 3-to-5 percent fees for using a credit card, known as the “swipe fee.” Of those that do take credit cards, at least 36-percent require a minimum purchase.

Once you get past the problem of scale, then there are the issues of the poor who do not have bank accounts. Aside from not having the economic power to work with the banks, there are some communities that are culturally opposed to the banking system. Even if they can afford to have a bank account, many choose not to open one. The near failure of large financial institutions in 2008 did not help in the trust factor.

Of course, the one cultural issue that cannot be ignored is privacy. Cash transactions are private. Only the buyer and seller knows the details of the transaction (unless the buyer volunteers their loyalty or rewards account information). With the problems of hacking around the world, how do you know that your credit card transaction are safe? Should we ask the victims of the computer hacks on Target and Home Depot?

Aside from privacy, credit cards can be costly to the customer. High-interest rates, debilitating debt, and collection issues see the use of consumer credit dropping when there is an economic downturn. During the Great Recession that began in 2008, spending went down and, when the economy began to improve, savings went up. When wages began to rise in 2010, more money was being spent paying down debt than adding to the economy. Rather than stimulating the economy, this creates a stagnant effect since the economy thrives more on the selling of goods and not by the managing of cash.

It seems that every six months there is yet another “Chicken Little” story that either we are or should stop using cash. But when society seems to be set in using cash even when there is anecdotal evidence that makes it appear that we are on the brink of a cashless society, they become quiet as if they ended up in Foxey Loxey’s den!

Reports of cash’s eventual demise appear to be as amusing as it is greatly exaggerated. For numismatists, this means that our hobby will continue to grow with new, fresh material for years to come. Happy collecting!

image courtesy of The Guardian

Whatever happened to Customer Service?

A reader who found the Coin Collectors Blog through a search came across the two-part series I wrote in 2012 about “How Are Coins Priced” (links to Part I and Part II). After asking a few questions this new reader asked me about the section about Negotiating in Part II.

My principles of negotiating are to be nice, do your homework, know when to stop and always be gracious. Although some of us consider negotiating a sport, there is no reason to be nasty. Always say “please” and “thank you” even if you did not buy the coin. Thank that dealer for taking the time to talk with you. Good will can go a long way!

As a new collector, this reader visited a few regional shows before going to the World’s Fair of Money. Thinking that as a big show there might be some good finds and can jumpstart an interesting collection. While this was not my reader’s first large show, it was the first time the family visited the World’s Fair of Money. It was also an excuse to go visit Mickey’s first theme park.

With his permission I am reprinting his note. I removed the section that described the dealer and his inventory:

My family and I went to Anaheim for the World’s Fair of Money. As we searched the tables looking for something of everyone’s interest we came across a table with books of coins. While I have seen notebooks like this with pages full of coins this was the first time we have seen so many. Each of us sat at the dealer’s table and started to look through the books.
 
My son is interested in Middle Eastern coins because my family emigrated from the Middle East after World War II. My daughter is fascinated by Queen Elizabeth and want to try to collect different coins with her picture. My wife’s family is from Japan and she has been picking up some older Japanese coins. As for me, I decided to try to complete a set of quarters after collecting the states quarters.
 
We are collectors. We are not putting the kids in front of the books to keep them occupied. At one point my son, who is trying to learn Arabic, was asking me what a few coins said and picked out a small handful for his collection. Nobody else found anything they liked.
 
We finished five minutes later and went to pay. My son has his own money and asked the dealer for the price. If we go by the numbers written on the coins, the price was $42. While that does not sound like much it is for a kid whose job is to cut grass and do odd jobs around the neighborhood. No discount was offered.
 
Standing next to my son I asked if he could do better on the price and that’s where the trouble began. He turned to me and said, “For what, hogging my table?” I was taken aback! Not only were we really looking to buy but my son was buying. As a matter of fact when my wife did not see anything she like she gave up her chair to another collector passing by.
 
I sort of stammered something about that we are all collectors and were looking but did not find anything and he said, then he said something like, “Then you should have gone somewhere else!” He was very rough.
 
I asked my son what he wanted to do. It was his collection and his money. With nobody else around this dealer’s table he blurts out, “yeah, kid, I don’t have time for this. Give me 40 and go away.”
 
I could see that my son was conflicted. While he wanted the coins he did not like the dealer. He then dropped his head and said in a soft voice, “No Thank you.” Although he looked like he wanted to cry the dealer responded, “great, now I have to figure out what book to put these coins in.” My son reached over and tapped the book and walked away.
 
I have never been embarrassed for my son like this. Why would a dealer treat a child or a customer like this?

I had no answers for these parents. Even though I do not deal with coins, when I do shows I try to treat everyone with courtesy, even when I can tell they have no intention of buying from my inventory.

When I am working shows, as I will be this weekend, days can be long and difficult. You have to be attentive to everything around you not just to complete the sale but to also prevent theft. Even on the slowest day, it does not pay to get nasty with a customer or potential customer.

This is not the first time I have heard stories like this and based on this reader’s description, it is not the first time I have heard this type of story about the dealer. I know for some it is just a job and like many jobs, after a while there are aspects that can be frustrating.

But this is a job that is about customer service for a product people do not have to buy. Coin collecting is a luxury, not a necessity. Even if you are frustrated, showing it to customers will give you a reputation and hurt business. Then what will you do when the customers do not show up?

There comes a point in time when you have to ask yourself whether it is worth the investment in time, money, and your sanity to continue or would it be better to just retire? Unfortunately, when it comes to some of the very long-time numismatic dealers who attend some of these major shows, there are too many that should consider retirement.

Is a new grading system needed?

Coin GradingOver the last few years there have been many numismatic writers who have taken to their keyboards to complain about the state of coins grading. Aside from your intrepid blogger there was a series of articles that appeared in Coin World by Q. David Bowers. In his articles, Bowers notes that even though the American Numismatic Association grading standards have not changed in quite some time, coins in older holders usually are graded higher today than they were when originally graded.

One area where this is hurting the hobby is when trying to buy coins using online auctions. In a less than scientific study, I have noticed that while looking for a specific coin that coin once graded by the Professional Coin Grading Service in their old green holders (OGH) tend to sell at a price half-way to what it would be if it was the next grade higher. Coins in older Numismatic Guarantee Corporation holders sell close to a similar price.

It is not known how many coins are cracked out of their holders and submitted to the grading services are submitted as raw coins. Most of these “crack out artists” do not turn in the labels for the grading services to adjust their population reports. Some coins could be counted several times by all of the major grading services while collectors fish for better grades.

Part of the problem is with the concept called market grading. Rather than looking at the coin and determine the technical state of preservation, the grading services take that grade and try to rank it within the market of similar coins. In the mean time, they participate in forums that teach technical grading without explaining market grading.

Could there be a better way? On the CDN Publishing Blog is a post by Rick Snow suggesting a different type of grading system based on a 15-point technical scale. Coins would be graded on a 0-5 scale for the condition of the planchet, state of the die as struck, and the strike. In this notation there would be no “Full Bands,” “Full Head,” or similar designations. Those coins would receive a strike score of 5. If that Jefferson nickel does not show all six steps, then the strike would be a 4. A final column would be a color designator with either a percentage of color loss from the original strike or RD (red), RB (red-brown), or BN (brown) for copper coins.

Rather than seeing a grade like XF, AU, or MS and trying to figure out why the coin received the grade, a coin would receive a grade like:

“Adjectival grade” (“Qualifier”: “Factor for Planchet”, “Factor for Die”, “Factor for Strike”, “Color Designation”).
As an example: Gem AU (13: 4, 4, 5, 10%)

The “Qualifier” would be the sum of the factors for the planchet, die, and strike.

It is an interesting idea especially for the current bullion coins. Honestly, can anyone really tell the difference between an American Silver Eagle graded MS69 versus one graded MS70? Yet, just because a grading service can allegedly tell the difference, there could be a two-to-three times difference in the price. However, I wonder if those coins were cracked out of their holders and resubmitted would they maintain their grades?

Could you tell the difference if they were not in the holders?

Although the grading services claim that they are doing what is best for the hobby, they are for-profit corporations that has to satisfy a market that seems to be more interested in the plastic and the label than the coin it holds. Even these verification services are for-profit corporations that has owners and investors to answer to. One is even into “market making” by doing arbitrage-like trading of its own stickered coins. This type of market making questions their independence because it appears that they are using their influence to drive up the price of those coins.

Would this type of grading be better for the hobby by providing the collector with more information? Is there an alternative that would fix the current system? Or is the current system just fine? Read the article on the CDN Publishing Blog and leave comments there and/or here!

Credits

U.S. Mint to hold Numismatic Forum

United States MintThe U.S. Mint announced that they will hold a one-day forum to “share perspectives on the past, present, and future of the numismatic hobby.” It is part of their preparation for the U.S. Mint’s 225th anniversary in 2017. The agenda will be the future of the Mint and the numismatic environment as a whole.

“It seems only appropriate that, while we as a bureau are celebrating our history, the Mint is also looking for ways to improve the way we engage our customers and invigorate our relevance into the future,” said United States Mint Principal Deputy Director Rhett Jeppson.

It will be interesting to hear the discussion and to observe the outcome of this forum because of the limited things the U.S. Mint can do without an act of congress. Although the U.S. Mint can create medals without an act of congress many of the medals they produce are required by law such as the duplicates of the awards to congressional gold medal recipients. As for legal tender coins, most of what the U.S. Mint does is governed by legislation. Although there is some leeway in areas like special finishes for proof and other non-circulating legal tender (NCLT) coins, what the U.S. Mint is allowed to produce is governed by law (see 31 U.S. Code §5112).

One area that they U.S. Mint has had a lot of freedom is the with the 24-karat gold special issue coins. As part of the bill that created the Presidential $1 Coins, there was a section (31 U.S. Code §5112(q))) that allowed the U.S. Mint to string $50 gold bullion coins of .9999 purity (24-karat). The law says that only the first issue must resemble the 1913 Type 1 Buffalo Nickel. Subsequent designs are at the discretion of the Secretary of the Treasury with designs reviewed by the Citizens Coinage Advisory Committee and the U.S. Commission of Fine Arts.

Subsequently, the U.S. Mint used this law to issue the 2009 Saint-Gaudens Ultra High Relief Gold Coin, 2014 Kennedy Half Dollar 50th Anniversary Gold Coin, 2015 American Liberty High Relief Gold Coin, and the 2016 Centennial Gold Coins. Even though the coins are popular and their low mintage does help generate interest, these coins are not affordable to the ordinary collector.

One way to make these available to the average collector is to strike a version as a medal, similar to the First Spouse medals that resemble their gold counterparts without a denomination. First Spouse medals are struck on the same planchet as the modern dollar coins.

The U.S. Mint does not have the freedom other world mints have. It is highly regulated by a congress with a parochial view on its constitutional obligation to coin money (Article I, Section 8). Remember, the U.S. Constitution says that “The Congress shall have Power… To coin Money, regulate the Value thereof, and of foreign Coin,” not micro-manage the process.

From a collector’s perspective, I am not sure what the U.S. Mint can do. They can take notes and recommendations from this forum and ask congress to make changes. However, given the behavior of the members of congress does anyone really think that they will craft any reasonable legislation?

Shortly after the press release landed in my Inbox I responded to the U.S. Mint expressing my interest in attending.

Those interested in attending should submit requests to USMintNumismaticForum@usmint.treas.gov by no later than Sept. 15, 2016. Individual requests to attend should include the person’s affiliation (e.g., hobbyist, coin dealer, coin grader, etc.). Seating is limited and submitting a request does not guarantee admission. Attendance will be at the cost of the participant. Detailed information will be provided to confirmed attendees. For those unable to attend or who do not receive an invitation, any formal presentations made by the Mint during the forum will be made available online as soon as practicable after the event.

Pin It on Pinterest

%d bloggers like this: