Jan 20, 2009 | history, legal, US Mint
A few moments ago, on the west side of the Capitol, Barack Obama was sworn in as the 44th President of the United States. On a specially built platform, President Obama put his hand on the same bible that Abraham Lincoln used at is inauguration in 1861 and was sworn in by John Roberts, Chief Justice of the Supreme Court. Millions millions of people watching on the National Mall and around the world heard President Obama take the oath of office:
I Barack Hussein Obama do solemnly swear that I will faithfully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States. So help me G-D.
Whether you voted for President Obama or not, this is a historical moment that everyone should savor. We wish the new president well and hope he will pursue the right policies to better this country.
Numismatically, President Obama’s election has caused opportunists to come out of the woodwork with numismatic collectibles that potential collectors should think twice about before purchasing. We have seen the advertisements on television, in magazines, and as fliers in other mail. They are advertised as “exclusive” and “limited editions” with prices set at one price, but if act today, you can receive the coins at a lower price.
If you buy these coins, please remember that these vendors are colorizing business strikes made by the US Mint and are worth their face value. Coins are colorized or thinly plated with less with less than a few cents of gold. Although the work is made with real coins, they are numismatically worthless. Similar collectibles for other events have not increased in value. In some cases they worth less than their issue price.
The US Mint warns that the coins are not official US Mint products and not endorsed by the Mint.
Please enjoy the view of history from where ever you are. But please consider another collectible to honor this history. Pins, buttons, clothing, hats, copies of The Washington Post from the day of the inauguration are wonderful alternatives that you can appreciate for years to come.
Oct 25, 2008 | eBay, grading, legal
When a company with the popularity of eBay sets an exclusive policy that says a seller cannot list a coin as certified unless it is one of a perceived top-tier grading service, it was only a matter of time before they would be sued.
It is being reported that eBay, the American Numismatic Association, the Professional Numismatics Guild, and the company of ANA President Barry Stuppler are being sued in the Eastern District of New York alleging anti-competive conduct.
The primary defendant is a company called Universal Grading Service of New Jersey. Others have ownership association with the company.
The case was filed in late August with a conference scheduled to be heard in January. The suit claims that a conspiracy exists between the defendants against small grading companies. According to the complaint, the plaintiffs are saying that eBay’s listing policy “limits the flow of goods in commerce.”
It is expected that the plaintiff will ask for class-action status.
One of the first questions would be whether New York is the proper jurisdiction for this suit. None of the organizations or officers are located in New York. Filing in New York may have been a strategic move since the court is known to be business friendly with a bias to opening markets. But without clear jurisdiction, it can be speculated that this case will be dismissed on those grounds.
Another issue is whether a non-government entity has the legal right to restrict how their site is used. Although I am not an attorney, I seem to recall similar cases where the commercial entity can restrict access to their services.
Interestingly, while UGS chooses to fight in court, Dominion Grading Service, which was formed out of the ashes of PCI, has chosen to let the market decide. DGS wants to earn respect rather than suing for it. That may be a better way to go.
Jun 10, 2008 | Eagles, legal, legislative, US Mint
We have been in for a wild time here in the Washington, DC area. Severe thunderstorms and high winds swept through the area on Wednesday and Saturday providing the electric companies with quite a bit of work to do. During that time, I am reminded once again that computers cannot function without electricity.
While the rest of us were sweating and fixing our homes, the US Mint and Treasury policy implementers were downtown trying to figure out how to throttle the sale of silver on the open market. In fact, the Mint has been slowing the sale of American Silver Eagle bullion coins since April.
According to a letter sent to authorized bullion purchasers, the Mint has experienced “unprecedented demand” for silver bullion coins. While the demand for silver has risen, the Mint’s supply has not been able to keep up with the demand. So the Mint will be increasing production at the expense of collector American Eagles and while limiting the sales to bullion dealers.
Although sale of silver bullion has surpassed expectations, expectations by the US Mint should have been higher. With the economy waning, it should not surprise the Department of the Treasury that people would hedge their money against inflation through the purchase of precious metals. This is one of the oldest strategies in investing. Yet, the Mint all but admits to being caught short by this. Why?
Many have commented on the Mint’s shortsightedness while others argue that the Mint is acting illegally. I think it is mired in politics.
Since the seating of the 110th Congress, there has been a subtle show of acrimony between the Mint and the new congressional majority. US Mint Director Edmund Moy has made it clear that he thinks the Mint should have the power to determine the content and design of US coins. The House of Representatives responded by introducing H.R. 3956 that would give this power to the US Mint.
After H.R. 3956 was introduced, fellow members and watchdog groups question whether the bill would be constitutional since it will pass off to the executive branch the power “To coin Money, regulate the Value thereof…” (Article I, Section 8). To fix these issues, H.R. 5512. In H.R. 5512, congress would continue to determine the composition and design of coins while the Mint would become advisors.
When the bill passed the House, Moy was quick to disagree with H.R. 5512 by suggesting that the Mint should have more control over the composition and design of the coins. He also requested that the bill be changed to provide more time to implement the requirement for copper-colored steel cents. The current bill requires the change to occur in 90 days. Moy said that the conversion would require 18-24 months.
There may be more to this than just one bill. Following the passage of the Native American $1 Coin Act, the Mint thought they had a loophole that would prevent them from minting Sacagawea Dollars in 2008. Letters were exchanged between Congress and the Department of the Treasury explained the law that was passed and said that the Mint should strike Sacagawea Dollars immediately. Sources report that contentious discussions suggested that the Director would be in violation of the law if the Mint did not strike Sacagawea Dollars. Allegedly, this conversation occurred two weeks before the availability of 2008 Sacagawea Dollars.
Moy again by proposing the Mint strike 2009 Double Eagle Gold $20 ultra-high relief coin based on 1907-1908 design by Augustus Saint-Gaudens. When introduced to the Citizens Coinage Advisory Committee, Moy stated that 31 U.S.C. § 5112(i)(4)(C), the authorization of the American Eagle program, gave the Mint the authorization to strike these coins. Congress disagrees because everything about the coin, from composition to design, is not codified in the law. Rather than argue with the Director, both the House and Senate introduced appropriate legislation to authorize this coin.
Now, when the Mint was questioned on the distribution problems with silver, the Mint responded with a brief statement that said in part, “By law, the United States Mint’s American Eagle silver bullion coins must meet exacting specifications and must be composed of newly mined silver acquired from domestic sources.” (emphasis added) The problem is 31 U.S.C. § 5112(e) and 31 U.S.C. § 5112(f), the laws that authorizes the bullion program does not say that the coins must be made of newly mined silver. In fact, the law does not require that the silver be purchased from US-based mines. All it requires is that the silver used be purchased at market value and the bullion sold at a value based on the silver market.
It appears that Director Moy is using a pedantic reading of the law to make his point. Rather than working with congress to resolve these issue, Moy would rather use politics to make his point hoping citizens would complain to congress. Sources say that Rep. Luis Gutierrez (D-IL) has emphatically told both Moy and Treasury Secretary Henry Paulson to resolve the situation. Rep. Gutierrez is Chairman of the Domestic and International Monetary Policy, Trade and Technology Subcommittee which has oversight responsibility over the Mint.
Individually, these policy moves by Director Edmund Moy do not seem significant. Together, they represent a pattern that shows the Director is looking to increase his power over the Mint. Moy needs to remember that he is the boss of the manufacturing operation charged with the responsibility to strike coins as prescribed by the 535 member Board of Directors (congress) and approved by the Chief Executive Officer (president). Moy’s actions are insolent and should be the subject of disciplinary actions by the Board of Directors.
Mar 29, 2008 | coins, legal
Litigation between the Langbord family and the United States government continues over the ten 1933 Saint-Gaudens double eagles that were found by the daughter of Israel Switt in a safe deposit box and confiscated by the US government. When the coins are not being displayed, they are stored at United States Bullion Depository in Fort Knox, Kentucy.
Joan Langbord, 76, and her two sons Roy and David, filed a lawsuit in US District Court against the government to retrieve the coins. The Langbords are represented by Barry H. Berke who represented Stephen Fenton in the lawsuit for the Farouk specimen.
In a recent ruling, the court denied the plaintiff’s motion to depose those involved with the decision making process of the Farouk specimen. While more than 40 separate motions have been filed by both sides, it appears that this is the first one denied to the plaintiffs.
As the case moves on, there continues to be speculation of at least one more example in existence. The result of this lawsuit will determine whether that piece comes out of the shadows.
Who said numismatics did not have mystery and intrigue!
Mar 27, 2008 | BEP, currency, legal
During a discussion of inexpensive solutions for ways to make authentication into government systems stronger and accessible for the public at a low cost, we were told that the mechanism selected had a version in Braille to allow participation by the blind. Because the program was sponsored by the Department of the Treasury, it was considered ironic that Treasury was concerned about this blind in this program but does not make that same consideration for our currency.
The issue with accessibility of currency has long been an issue, especially since the passages of the Americans with Disabilities Act (Public Law 101-336, signed by President George H.W. Bush). Unfortunately, the Bureau of Engraving and Printing has interpreted Title III (Public Accommodation) as not applying to US currency. Even as the BEP has added new security features and the look to our currency, no changes were made for the blind.
In 2002, the American Council of the Blind (ACB) brought a lawsuit against the Treasury Department demanding that US currency be designed to be accessible to visually impaired people. The court ruled in favor of the ACB complaint in 2006. Treasury was supposed to respond to the order in 30 days from the review. No public statement has been made by Treasury.
From the BEP’s founding in 1861 through the mid-1920s, the bureau had a history of frequently changing currency designs and even changed its size around the turn of the century. Beginning in the 1920s, currency design did not change until the mid 1990s when new security features had to be added curb counterfeit problems.
Advocacy groups continue to petition BEP to make the currency more accessible to the visually impaired. BEP has even been provided with studies of describing the features used by over 100 countries to include the visually impaired. The Reserve Bank of Australia has researched and developed the use of polymer notes with special security features with consideration for the visually impaired with great success.
Rather than implement one of existing technologies that are being used by over 100 countries and the European Union, BEP designers chose to increase the size of the “5” on the reverse of the new $5 note so that it would be visible to those with limited sight capabilities. Allegedly, the intaglio printing used on the note is supposed to help the blind. What the BEP does not mention is that once the note wears, the benefits of the intaglio printing disappear.
The BEP does not have the same design restrictions that is placed on the the US Mint (31 U.S.C. §5112). BEP can change the notes at any time for any reason. The only restriction on US currency is that the denominations must begin with one dollar (31 U.S.C. §5115(a)(2)). So why does BEP continue to discriminate against one class of Americans while continuing to producing an ugly product?
Jan 19, 2008 | gold, legal
It was reported on the website AccessNorthGa.com that police was able to stop a conspiracy to steal coins from the Dahlonega Gold Museum. It began when museum staff was tipped off by an anonymous caller on Christmas Eve. Officials then contacted one of the alleged co-conspirators who supposedly visited the museum and researched the value of the coins.
“We put them on notice that we knew about the conspiracy and none of the coins would be stolen,” Lumpkin County Sheriff Mark McClure said. And, “We would be definitely looking to charge individuals if that did occur.”
Details about the conspiracy was provided to the Numismatic Crime Information Center, an organization that maintains a database and provides information to law enforcement about numismatic crimes.
Oct 25, 2007 | auction, legal, medals
Newsday was alerted earlier this month that a Pulitzer Prize gold medal won by the newspaper appeared for sale on the eBay auction site. Although that medal turned out to be a replica, reporters found listing for three gold Pulitzer Prize Medals for auction at Heritage Auction Galleries.
Officials from Heritage Auctions listed the 1953, 1970, and 1974 medals that were awarded to Newsday which Heritage deemed as genuine gold award medals. These were the first three of 19 Pulitzer Prizes won by the newspaper. Heritage President Jim Halprin alleges that the medals were consigned from a Long Island coin dealer who claims to have purchased them from an estate sale. The coin dealer has hired an attorney and has not commented.
Newsday executives believed the original medals were stored in a safe in the newspaper’s Melville (Long Island) corporate offices while authorized replicas are on display at in their New York City offices. Executives opened the safe where they thought the medals were stored and found a locked box. When a key could not be located, Newsday hired a locksmith to drill the lock open. The box was empty.
Company officials contacted the FBI to report the theft. The FBI recovered two of the medals that were sold to someone in Florida who is cooperating with the investigation. The other medal will be returned from Heritage Galleries’ offices in Dallas, Texas. All three medals will undergo authentication by the Medallic Art Company, who created the medals for the Pulitzer Foundation.
Halprin defended the auctions claiming that it is Heritage’s policy to verify consignments, especially when they are from someone they have not done business with in the past. He noted that their procedures have been in place since 2001 after previous problems. Halprin did not comment further on this consignment except to say that Heritage will perform an internal investigation into this transaction.
Acquiring an original Pulitzer Gold Medal that was awarded to a newspaper still in existence should be suspicious. One would expect a firm like Heritage would scrutinize the attempt to consign such a prestigious award. Investigating the pedigree of this medal be easy. Since the name of the newspaper is engraved on the medal, the first first act would be to call Newsday to verify the medal’s pedigree. Heritage was probably so ecstatic to obtain such a prize that their eyes probably glazed over and rushed it to auction without doing their due diligence—at least this is how it appears!
Apr 17, 2007 | coin design, legal, US Mint
The U.S. Mint announced that they have set the final rule to limit the exportation and melting, or treatment the cent nickel coins in order “to safeguard against a potential shortage of these coins in circulation.”
Basics have not changed from the interim rule (and press release): melting of one-cent and five-cent coins is prohibited; individuals may carry $5 of coins out of the country; and dealers may ship up to $100 of numismatic coins out of the country. The civil fine will remain at $10,000 per incident, incarceration of up to 5 years in a federal prison, or both. Details are published in the Federal Register [PDF]
Dec 17, 2006 | coins, legal
In an effort to protect the supply of one-cent and five-cent coins, the US Mint issued an interim rule to make melting and export of these coins illegal. Even though the cost of the metals have risen above the cost of the coin, Mint Director Edmund Moy said that the regulations will prevent these coins from being “melted down so a few individuals can take advantage of the American taxpayer. Replacing these coins would be an enormous cost to taxpayers.” These rules are being implemented under the authority of 31 U.S.C. §5111(d).
Rules limiting the melting and exporting of US coinage are being implemented for the third time. The first time was in the 1960s when silver prices forced the conversion to clad coinage. It was used again during the inflationary period of the late 1970s shortly before the cent was changed from a copper coin to a copper-coated zinc coin. If history hold true, this may be a prelude to changing the composition of the one-cent and five-cent coins.
Historically, the five-cent coin we call a “nickel” has been minted using the same alloy of .750 copper and .250 nickel since the Shield Nickel in 1866. Nickel Three-Cent pieces were also minted using the same alloy from 1865 through 1889. The exception to this was the wartime silver Jefferson Nickels (1942-1945) that contained copper, silver, and manganese, but no nickel in the alloy.
In 1974, the Mint experimented with striking cents using aluminum. Images of these coins are bluish in tint, but that may be an artifact of the image. Aluminum cents were distributed to congress but law makers rejected the change. The Mint requested the return of the coin and were destroyed. At least one was not returned and certified last year by the family of a deceased US Capital police officer.
The odds against acceptance the aluminum cent were great at the time because of the change from silver to clad coinage using base metals. By 1971, the Kennedy Half-Dollar and newly minted Eisenhower Dollars were copper-nickel clad coins ending the use of silver for circulating coinage.
Today, the environment has changed. After 35 years of base-metal coinage, maybe the use of aluminum for the cent is an option that may be accepted. This time, rather than just an aluminum coin, the Mint could try to coat the coin with the .8 percent copper that the Mint uses to cover the current zinc planchets. It may be different for the nickel considering a change may affect more than just the look and feel of the coin including the modifications necessary for the use in the vending machines.
Look for a change with your change in the next few years.
Dec 8, 2006 | coins, legal
The family of Israel Switt is suing the US Mint claiming that the government illegally seized ten 1933 Saint-Gaudens Double Eagle gold coins found in a safe deposit box where Switt stored the coins. The coins were found by Switt’s surviving daughter, Joan Langbord, in 2003. Langbord reported the find to the Mint to “attempt to reach an amicable resolution of any issues that might be raised.” When Langbord gave the coins to the Mint to be authenticated, the Mint confiscated the coins.
Knowing the history of these coins, it was curious as to why Langbord gave the coins to the Mint. With the exception of the two examples held by the Smithsonian Institute and the one that was once owned by King Farouk of Egypt that was sold in 2002 for $7.59 million, other 1933 double eagles were confiscated and subsequent law suits upheld the Mint’s actions.
The suit was filed in US District Court in Philadelphia by Barry H. Berke on behalf of Langbord and her sons Roy and David. Berke is no stranger to these types of law suits. He represented the plaintiffs in the case that resulted in the sale of the Farouk coin in 2002. But the Farouk coin was different. King Farouk purchased the coin using an emissary in the United States from an unnamed dealer. The emissary applied for an export license with the State Department in order to allow the coin to be shipped to Egypt. Even though the coin was not formally issued by the Mint cashier, a requirement for coins to be circulated, the papers issued by a federal agency. Legally, this allowed the owner to consider the coin as legally owned and made the government’s case questionable. The case was settled with the parties involved agreeing to split the proceeds from the sale.
Unlike the Farouk coin, the ten coins that were confiscated from the family of Israel Switt, who has been accused of illegally obtaining the coins in 1934 probably from the cashier or his assistant, does not have any legal paperwork or other proceedings to declare the coins legal in any way. In fact, the precedence of the at least dozen confiscated coins prior to the Farouk coin strengthens the government’s case.
Unless congress intervenes, the Langbords are likely going to loose these coins the way others have done. Case law is replete with precedences acknowledging the government’s right to follow it’s procedures even when not codified in law or via the Code of Federal Regulations. In fact, the Mint’s coining and distribution policies and procedures extend beyond the law and into policies that now date to the reforms of James Ross Snowdon in the mid 19th century.
The story of the 1933 Saint-Gaudens Double Eagle gold coins has to be one of the strangest and most entertaining in the history of the US Mint. This chapter should add to that legend!
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