Laura Legend Steps In It Again

There are a people in the numismatic industry I like, but there are some I watch with amusement for various reasons. One of those I watch with a certain amount of amusement is Laura Sperber of Legend Numismatics from Lincroft, New Jersey. Sperber and Legend deals with a higher end segment of the market where their “lower-end” products cost more than $1,000.

There is nothing wrong with the high-end market, but most of the people I have associated with in numismatics that are not dealers look at $1,000 as being out of our budget. We are happy finding nice coins and putting together fun sets that may not be the type of coins that Legend and similar companies would sell.

While I respect Sperber for her views on the market, she acts and writes like it the view of everyone who participates in the market. Thus is the case with her Market Report regarding the recently ended Whitman Baltimore Coin and Currency Expo.

Sperber opens her tome noting that the show was “decent but quiet.” As with many June shows in Baltimore, it is not as active as the March or November shows and Sperber notes that the timing and the location works against this show. This is a fair comment and something the people at Whitman needs to consider in the future.

What is not fair is that her views are caveated at the beginning saying that the dealers she spoke with “on our level” was a few paragraphs before a section titled “When Dreck Rules.” On one hand she is saying that, “we know of a few smaller dealers who had nice coins and did VERY well.” Then a few paragraphs down she noted that, “[there] were few fresh and nice coins in anyones display case.” Which is it? Were there dealers with nice coins or where there few nice coins? It cannot be both.

Sperber also forgets that there are more aspects of the market than this “on [her] level.” Some of us are on a budget whose budget may not include paying thousands of dollars for coins. But we like to look and even learn so that maybe if that coin ever becomes affordable we can consider a purchase. She disparages some who she said were not serious buyers who “came to kick some tires and chat.” Using this logic, we are not to go to a high-end dealer to look, ask questions, and learn. Maybe, people did not like the quality of your coins; after all, you said that there were not enough “fresh and nice coins in anyones [sic] display case”

But according to Sperber, “we need cool and better CAC stickered coins” as if CAC stickered coins are the answer to her problems. It is hard to say whether CAC coins are the answer, but the concept of a coin having eye appeal and being entombed in a plastic slab stickered by someone else does not give the coin good eye appeal. In fact, a high grade coin, with our without the sticker, can be quite ugly. As someone who is not a fan of toned coins, I find many toned coins unattractive, yet I have seen a few with a CAC sticker that I would never buy even if offered as a raw coin.

What Sperber does not tell you is that she and/or Legend Numismatics have a stake in the CAC. That lack of disclosure in her promoting of the CAC is disingenuous, at best. In the future, Sperber should caveat discussion she is involved with about the CAC noting her association.

I understand that the good people at Legend Numismatics have to make a living, but it is time for Laura Sperber to show some respect for the entire numismatic community and not just those who can afford what her company sells. Sperber has demonstrated an interesting perspective on the market that could be respected if she does not come off as a Jersey-tuff person as she has done on other occasions. Even this Brooklyn-born blogger is turned off by that Jersey-tuff attitude. She must start to learn that there is room for everyone in the numismatics market including the tire kickers, looky loos, low-end buyers, and those of us having fun. Until then, if I should be looking for a coin of that caliber I will probably not purchase it from Laura Sperber or Legend Numismatics.

Paulson and Understanding Common Cents

History tells us that the first coinage legislation was devised primarily by Secretary of the Treasury Alexander Hamilton with Secretary of State Thomas Jefferson. These fathers of the United States understood that the new, struggling nation needed its own monetary system that had to be accepted by the public. The eventual law became the foundation of our monetary system.

When Hamilton decided a decimal coinage system was best, he was looking at how the people were using the Spanish Milled Dollar (8 reales) and cutting it up for minor coinage. The pieces were called “bits.” He also saw the continued circulation of British copper coins. The highest denomination circulated in the colonies was a sixpence since the king used the lower coinage in an attempt to control the populace. These coins were used a decimal fraction of the Milled Dollar. It was a natural progression.

Jefferson and Hamilton proposed new United States coins that would be used along side their British and Spanish counterparts until the country could produce enough coinage to drive the foreign coins out of circulation. Jefferson proposed that the new United States coins be similar in size to the coins in circulation. Thus the bill passed by the first congress included a half-cent as the same size of the half-pence, the one cent as the same size of the one penny, the half-disme was the same size as the threepence, and so on.

Hamilton pursued the minting of the half-cent because he felt that if the cent was the lowest denomination, the prices for common commodities would have to be raised. About the half-cent Hamilton said that to “enable the porrer classes to procure necessaries cheap, is to enable them, with more comfort to themselves, to labor for less; the advantages of which need no comment.” The half-cent was also necessary to replace the half-penny and provide change for the bit, which is one-eighth of a Milled Dollar.

The half-cent survived until the passage of the Coinage Act of 1857 which eliminated the half-cent, approved the minting of the small cent, and demonetize foreign coins circulating in the United States. Since the half-cent was not a popular coin, the economy adjusted and found that half-cent pricing was voluntarily eliminated Also, without the bit being legal tender, there was no longer a need to make half-cent change. Within a short time, a few years by some accounts, both the half-cent and large cent were no longer being circulated.

In the United States, we hold our founding fathers in reverence because of how their work has survived. While these men were not perfect, their wisdom and foresight has survived wars, crime, corruption, economic crises, and terrorism for over 200 years. It is a self-correcting system that was designed to grow with the nation. During this evolution, economic concerns and support for the poor have been paramount in economic policy.

This might have changed on February 29, 2009, when the current Secretary of the Treasury Henry Paulson told Spike O’Dell of WGN in Chicago that the penny should be eliminated saying, “The penny is worth less than any other currency.” Paulson, who can turn a phrase as well as his boss, also shows that he is out of touch with the rest of America when he said, “I walk around with very little cash in my pocket, like everyone else.”

Apparently Paulson, the former chairman of Goldman Sachs, does not venture far from his office at the Department of the Treasury into southeast Washington or into areas of northeast where lesser advantaged people live who do not have a pocket full of credit cards. And with credit issues being at the center of the current economic crises, it is irresponsible for the government’s leading financial manager to pitch pennies for those who have to pinch pennies.

Those who want to end the production of the cent says that cash payments would be rounded. But at whose advantage? When there was an issue with the half-cent, the market adjusted on its own. So when the coin was eliminated in 1857, there was almost no economic impact. However, prices are not rounded, sales taxes are calculated in fractions, and the coin is used many transactions.

The United States has been striking one-cent coins every year since 1793. It is the most common coin, yet has produced some legendary coins like the Large Cent, the 1856 Flying Eagle Cent, 1877 Indian Head Cent, the 1909-S VDB, and the king of all errors the 1955 Doubled Die Obverse.

While the elite like Paulson and Richard Safire never consider the person who driving their limousines, the rest of us worry about the impact on the economy and the injustice its removal from the market would bring. All they consider is that the rising price of zinc and the production process of the United States Mint, it costs 1.6-cents to strike one coin, which allegedly affects the taxpayer.

What they do not tell the public is that the US Mint does not receive any appropriations from the Treasury General Fund. All of the operations of the US Mint (and the Bureau of Engraving and Printing) are funded through the Public Enterprise Fund. The PEF is a special account where the profits from the sales of coins, called seignorage, are deposited. Whether the sale is to collectors, or to the Federal Reserve Bank branches who pay face value for the coins, the difference from the manufacturing process and the purchase is deposited in the PEF. When congress determines the budget for the US Mint, the money used is withdrawn from the PEF. Congress then uses the balance for other purposes.

The Mint and BEP are manufacturers of money that are profit making organizations, and they have a very good profit record—better than any top ranked company. They have become self-sustaining agencies with a financial record better than most other government agencies. Unfortunately, that does not enter the discussion of the detractors.

Another area the detractors discount is the good that can happen from the penny. Remember the Penny Harvest Field that was on display in December at Rockefeller Center in New York City? While the pennies are being counted for the 2007 effort, the 2006 project collected over $643,000 for New York area charities. For a coin that allegedly has little to no purchasing power, that is a lot of money to support good programs.

Many of us who started collecting at a young age would either rummage through our parents’ change or worked cutting grass, delivering newspapers, and other odd jobs where the payment helped fuel that passion. Pennies were easy. We would buy the ubiquitous blue Whitman Folders and try to fill the holes with what we find. It was an inexpensive way to start a collection and have some fun. Today, there are companies that bulk lots from hoards that can be searched to create a nice collection of circulated coins. It is the same principle accounting for the economic changes since I started collecting 38 years ago.

Whether you are a collector, investor, or concerned citizen, I urge you to consider all of the facts. While the Ruppert Murdock-owned Wall Street Journal mentions the near dormant Citizens for Retiring the Penny whose only argument is that pennies cost too much to make, organizations like Americans for Common Cents looks to educate people with carefully constructed and referenced facts.

As a collector and taxpaying citizen of the United States, I believe Paulson and his ilk are wrong and should not be in a position of power with an attitude he has shown. As I type this, he will be in his job no more than the next 319 days!

I will leave you with one last thought: If the cent is obsolete and economically infeasible with little buying power, then why is the Federal Reserve ordering so many for circulation?

COMMENTARY: Manley v. Kagin

Numismatic publications have been writing about the case of Dwight N. Manley versus Donald Kagin. Manley is a sports agent who represents big-name NBA players is also a rare coin collector and investor. Manley is a major benefactor of the ANA. Manley accused Kagin of trying to broker a deal that involved a rare Blake & Company gold assay bar that was recovered from the S. S. Central America that was stolen from Manley’s home. Manley claims that Kagin knew the bar was stolen and failed to help in its recovery. Manley filed the complaint to have Kagin dismissed from the ANA for violating the ANA’s Code of Ethics.

Kagin runs the family’s firm in Tiburon, California. Kagin holds a Ph. D. in numismatics and is a member of the ANA Board of Governors. He asserts that the bar was not reported as stolen and when he was informed that it was stolen, he worked with Manley and the police to have the thief arrested. A public hearing was held on May 29, 2007, at the Long Beach Coin Expo.

The ANA released their findings the next day taking no action against Kagin but suggesting that he consider performing a bit more due diligence on future transactions. The following day, Manley’s attorney said that his client is considering further actions against Kagin.

Of all the evidence presented at the hearing was the one that said the bar was not reported stolen. Kagin claimed that he checked whether the bar was stolen through some sources, but did not find any information. Manley claims that Kagin knew Manley was the anonymous purchaser of the bar at an auction in 2000. He said that he sold many of the bars and has sold the bar in question shortly after its recovery.

So let me get this straight… Manley sold some of the bars, did not report that this bar was stolen, and expected Kagin to know that Manley still owned this bar that was bought six years prior? I do not understand Manley’s logic. Without a report that the bar was stolen, how was Kagin supposed to know?

The numismatic value of the Blake & Company gold assay bar has increased along with the price of gold. If Manley subsequently sold the bar at a higher price than it would have sold earlier, Manley was not what the lawyers call “injured” in this action. Manley probably benefited by the delayed sale.

By Manley and his attorney, Christopher L. Pitet, considering “further action” suggests that Manley does not respect the Code of Ethics that he accuses Kagin of violating. By continuing to pursue actions against Kagin, Manley is attempting to “impair the prestige of the membership therein.” Manley must “base all of [his] dealings on the highest plane of justice, fairness and morality, and to refrain from making false statements as to the condition of a coin or as to any other matter” as prescribed by the ANA bylaws.

I am not defending Kagin, but unless Manley can show that he was injured in any way by Kagin, which the ANA Board of Governors said he was not, then Manley should be thankful that his property was returned and move on. Going further will only injure Manley’s reputation with the ANA membership. Or as we said when I was younger: GET OVER IT!

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