Pocket change nickel type set

The other day I was talking with a someone who was not a coin collector to explain why I liked collecting coins. One of the reasons I mentioned was the thrill of the hunt. To be able to find that one coin to add to a collection or even reaching into my pocket and finding something interesting, even if it was not valuable.

To demonstrate what could happen, I reached into my pocket and happen to pull out what could be considered a type set of Jefferson nickels. I first found the 2012-P nickel that seems to now be in common circulation. Next was a 1982-D nickel with what looks like a filled “D” mintmark. For the time period, the blob for the mintmark was common and not worth anything more than a curiosity.

As I slid the 1982-D aside, I found the reverse the the Keelboat type 2004-P nickel. The person I was talking with was not aware of the Westward Journey nickel program commemorating the Lewis and Clark expedition to the west. I mentioned that the 2005 American Bison design was my favorite. Not only does it have the the American Bison on the reverse, the animal that most represents the country’s westward expansion, but the front has that wonderful bust of Jefferson designed by Joe Fitzgerald.

When I started to look at the last nickel, I said, “oh… this is older.” When asked how I knew before looking at the date, I explained how the relief had changed over the years. Using the four coins in hand, I could demonstrate how the relief and designs have been altered over the years to accommodate striking requirements. Even though the composition of the United States 5-cent coin has not changed since 1883 except for the silver-copper-manganese composition during World War II (1942-45), the U.S. Mint has lowered the relief of the coins in order to make the dies last longer and reduce production costs. According to the U.S. Mint’s 2012 Annual Report (PDF) it costs 10.9 cents to make one nickel. It could be more if the U.S. Mint had to use more dies to strike coinage for circulation.

I adjusted my glasses to see that the coin had the year 1956 then I flipped it over to see if there is a mintmark. When asked why I was looking for the mintmark on the back when it appeared on the front of the other coins, I said that up until 1964 the mintmark on the Jefferson nickel was to the right of Monticello and only if the coin was struck in Denver or San Francisco. Only the War Nickels had a mintmark prior to 1964. Luckily, I was able to demonstrate when a “D” mintmark appeared on the coin.

A small type set of Jefferson nickels found in pocket change. Top row: 1956-D and 1982-P. Bottom row: 2004-P Keelboat design and 2012-P.

A small type set of Jefferson nickels found in pocket change.
Top row: 1956-D and 1982-P. Bottom row: 2004-P Keelboat design and 2012-P.

The next question was “How much is it worth?” Since the coin could be graded Good-4 at best, I said it would probably be worth 5-cents, face value. I decided to look up the price and saw that it was worth 6-cents! It is hardly worth the effort to sell. But the person that I was showing the coins found my little pocket-change type set was interesting.

Now that I have written about them, all four coins will go back into circulation for someone else to find. Who knows, maybe a young numismatist will find the 1956-D, think it is cool and add it to their collection. If you are in the Washington, D.C. metro area, you can be on the lookout for the 1956-D and other nickels I just wrote about. Happy change hunting!

A Week Fit for a Buffalo

2013 National Coin Week--Black Diamond Shines AgainWelcome to National Coin Week. This year, from April 21 through April 27, the National Coin Week theme is “Black Diamond Strikes Again” to celebrate the 100th Anniversary of the introduction of James Earle Fraser’s Buffalo nickel.

According to legend, Black Diamond was Fraser’s model for the reverse of the Buffalo nickel. Black Diamond was a North American bison that was living in the Central Park Zoo. He was donated to the zoo by Barnum and Bailey and lived his life there until he was auctioned in 1915 to a game and poultry dealer who was later sold as steaks for $2 a pound.

James Earle Fraser, ca. 1920

James Earle Fraser, ca. 1920

When asked about the model for the coin, Fraser said it was Black Diamond and found him in the Bronx Zoo. At one time Fraser was not sure of the name of the animal but insisted his influence was at the Bronx Zoo. Black Diamond was never at the Bronx Zoo.

But like the story of who was the model for the Indian on the obverse, why should facts spoil a good story!

According to the fun folks at the American Numismatic Association, Black Diamond lives. Not only are they on the hunt to find him, but you can follow his exploits on Twitter using the handle @Diamondisalive.

Be sure to check out the the information at the ANA website. One thing you may want to read is the “The History and Romance of Hobo Nickels” [PDF] from the Money Museum.

Are you going to celebrate National Coin Week?

Yes, and I am even carrying my lucky Buffalo Nickel (38%, 6 Votes)
No, not this time (25%, 4 Votes)
What's National Coin Week? (25%, 4 Votes)
My local coin club is doing a program (6%, 1 Votes)
This is a silly idea (6%, 1 Votes)

Total Voters: 16

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1913 Buffalo Nickel Type 1 Reverse

1913 Buffalo Nickel Type 1 Reverse

National Coin Week banner courtesy of the American Numismatic Association.
Other images courtesy of Wikipedia.

One Page Collection: 2, 3, and 5 cent coins

A few weeks ago, I wrote about a one page collection starting with the one cent coin. The set also included an example of a half-cent to cover the lowest denomination of coins produced by the U.S. Mint.

The concept of the one-page collection is to create a meaningful collection using a single 20 pocket page that holds 2×2 holders. Using this format, I can create any type of collection without being bound to the albums and folders that are published by the numismatic press. I can also personalize the collection with information I find and other stories, some that I write.

When creating a one page collection, I am looking at ungraded coins that could be graded Fine or better and costs under $100 each. While I try to keep purchases under $50, having the ability to go over for certain coins gives me a little flexibility while staying closer to affordable.

I was asked what I used as a price guide to determine affordability. For full disclosure, I had been consulting the NumisMedia Online Fair Market Value Price Guide of collector coin. The site is free, updated monthly, and is the same information printed in their monthly publication. The NumisMedia Online Dealer Price Guide as well as their printed version requires a subscription.

Since my first one-pager was of the lowest denominations, I will move up a bit and put together a collection of 2, 3, and 5-cent coins.

The first coin struck by the newly created Mint was the half disme in 1794. As one of the original coins designated by the Coinage Act of 1792, legend has it that the coins were struck using silver donated by Martha Washington. Although there is no proof that our first First Lady donated her silver, it makes for a good story.

The first half-dismes were really not struck for circulation but over 86,000 coins of the 20.8 grains (1.35 grams) of .8924 fine silver were delivered to Secretary of State Thomas Jefferson (under the First Coinage Act, the Mint was placed under the Department of State). Originally designed by Robert Scot, the early Flowing Hair and Draped Bust half-dimes (the “s” was dropped in 1796 since it was silent anyway). Production ceased in 1805 with the shortage of silver.

Production picked up again in 1829 with the Capped Bust design by William Kneass and continued until 1837. After the passage of the Act of January 18, 1837, the weight of the coin was reduced to 20 5/8 grains (1.34 grams) and the fineness raised to .900 silver. For this change, Christian Gobrecht’s Seated Liberty design was used for the new coin.

This is where the series gets interesting. First, there was a change in design in 1838 to add stars to the obverse. In 1853, to show that the size and weight was change, arrows were added to the date from 1853 through 1855 before being removed in 1856 when the weight was returned to the old standard. In 1860, the legend was move to the obverse replacing the stars and the reverse laurel leaves were made larger.

The silver half-dime was made through 1874 after the successful release of the copper-nickel coin we call the Shield nickel. Nobody is sure when the coin started to be called a nickel, especially since it is made of only 25-percent nickel. It has been speculated that it was called a “nickel” because of the composition while it circulated along side the silver half-dime.

The U.S. nickel is unique in that it is the only coin that has been made of the same .750 copper and .250 nickel composition since its introduction in 1866 except for the silver alloy used during World War II from 1942-1945.

Starting this collection with an easy to find 1865 3¢ Nickel

Starting this collection with an easy to find 1865 3¢ Nickel

Two and three cent coins were conceived out of the coin shortages during the mid-19th century. The three-cent coin, nicknamed the trime, was conceived in 1851 for better handling by the post office for buying postage. The silver three-cent coin was struck between 1851 and 1873. However, when silver became expensive and people were hoarding the coins for their silver content, congress authorized the striking of copper-nickel three-cent coins where were called to as three-cent nickels. Mint engraver James B. Longacre designed both coins that used a Roman numeral “III” on the reverse.

Bought this 1865 2¢ coin from my coin club's auction

Bought this 1865 2¢ coin from my coin club’s auction

During the Civil War, the silver shortage caused hoarding of coins. The only circulating coins were the copper large cents. In order to produce more coins that would circulate, congress passed the Coinage Act of 1864 that eliminated the silver half-dime, the silver three-cent piece (trime), and authorized the production of the bronze two-cent coin. The Longacre-designed coin featured a shield on the front and the denomination “2 CENTS” on the reverse between two wheat stalks.

Beginning with the Liberty Head “V” nickel, most of the coins should be easy to find and not cost a lot of money. In fact, it may be easier to find an 1883 Liberty Head nickel without the “CENTS” on the reverse, also called the Racketeer Nickel, than an 1883 nickel with the “CENTS” in Fine to Very Fine grades. It may be easier to find a 20th century version that would fit this collection nicely.

For the rest of the series, you can find nice coins at all grades without problems. Just be aware of the major varieties, such as the two types of Buffalo nickels, and the modern changes in the Jefferson nickel. It should be fun to complete this set:

✓ 1964-1873 Two Cent piece: When I started to look for a an example of a two-cent coin, I was surprised as to how many I could find that were nicely preserved and affordable. Most VF-XF coins in this series can be purchased for $40-60 or even less if you find a dealer having a good day.
✓ 1851-1873 Silver Three Cent piece (trime): It will be difficult to find silver three-cent coins from 1863 through 1872 because most were melted in 1873. One of the best examples I have seen were the 1852 coins. Not only are they affordable but the mintage of over 18 million make them the most available coins of the set.
✓ 1865-1889 Nickel Three Cent piece: After the two-cent coin, this was the other coin minted in reaction to the hoarding during the Civil War. Early dates are easily found because of their mintage figures in the millions and for affordable prices. It should not be difficult to find a nice Extra Fine coin for around $40.
✓ 1829-1837 Capped Bust half-dimes: If you want a real challenge, put together a typeset of all half-dime types. Part of the problem with that is the Flowing Hair half-dimes will cost thousands of dollars, if you can find them. For the average collector, I suggest a Capped Bust half-dime to start the five cent part of this set. Based on the price guides and what I have seen at dealer tables, you should be able to buy a nice one graded around Fine for $60-65. This should be a good representative start of the five cent series.
✓ 1837-1873 Seated Liberty half-dimes Types 3 &amp 4: No collection is complete without a representation of Christian Gobrect’s Seated Liberty design. Inspired by the similar image of Britannia, Gobrect posed Miss Liberty in the same manner except holding a union shield and a phrygian cap on a pole that signifies liberty and the pursuit of freedom. For this set, I recommend the 1853-1855 “Arrows at Date” (Type 3) variety. Aside being affordable at $60-70 in XF, the arrows tell the story of how the composition was changed while the coin was being used. The “Legend on the Obverse” (Type 4) variety is an interesting change and would be even more affordable. For the “Arrows at Date” variety, you may want to consider finding one with the “O” mint mark from the New Orleans mint to keep it interesting. “Legend on the Obverse” varieties from San Francisco are affordable and would make for an interesting addition to this collection.
✓ 1866-1833 Shield nickel: Rather than worry about the “Rays” versus “No Rays” types, I decided on the “No Rays” to keep this coin around $40. However, it is your collection and if you what to spend about $100 for a VF-XF Shield Nickel with Rays, go ahead since it will give your collection a little more depth.
✓ 1883 Liberty Head nickel “Without Cents” When Charles Barber designed the coin, his idea was to use a Roman numeral “V” on the reverse and not include the word “CENTS.” Since the three-cent coins used the Roman number “III” it was a logical progression. However, since the coin was about the same size of the $5 gold-half eagle, the Liberty Head nickel was gold plated in an attempt to pass them off as the $5 gold coin. These coins were then nicknamed Racketeer Nickels. It was then decided to add “CENTS” to the bottom of the reverse. After this decision was made, people thought that the coins would be recalled and started to save them, thus making it easier to find the 1883 without CENTS nickel than it is to find an 1883 with CENTS coin.
✓ 1883-1912 Liberty Head “V” nickel: Most XF coins in this series will be around $40 each, if you can find them. It is easy to find very worn coins and very expensive to find the higher grades. In fact, if you can find a nice XF 20th century issue, that would make a nice entry in this collection and only cost around $30.
✓ 1913 Type 1 Buffalo nickel: This iconic American design by James Earle Frasier ranks as one of my favorite. While it is a great design, the coin did not wear well and it is possible to find a lot of coins where the dates have been worn flat. On the reverse, Fraser designed the coin where the buffalo (actually, an American Bison) is standing on a grassy mound. On the mound was the denomination and mint mark. This high surface wore easily in circulation. It was later changed to remove most of the mound for a line. You can find nicely preserved Type 1 Buffalo nickels from Philadelphia for around $25. Spend as little as $10-15 more for an example from Denver. San Francisco coins will be $40 more.
✓ 1913-1938 Type 2 Buffalo nickel: Basically, the mound was hollowed out leaving the buffalo standing on what looks like a line. While not as aesthetically pleasing, it did preserve the denomination and mint mark on the reverse from wear. Best bet for this collection is to find a late 1930s example for $10-15. If you spend a little more, you can own an uncirculated 1935 or 1936 with a mint mark for $35-40. These make stare-worthy coin in any collection.
✓ 1938-1942,1946-2003 Jefferson nickel: Jefferson nickels come in four types with the left-facing portrait being the dominant coin of the series. With the exception of the 1939-D, you can find an uncirculated example for under $10. If you want an example with the mintmark on the reverse, select a coin from 1964 and earlier since the mint marks were move to the obverse starting in 1968 and no coins had mint marks from 1965 through 1967. Maybe you would want to add a 1970-S coin which was the last year the nickel was produced in San Francisco and had an obverse mint mark.
✓ 1942-1945 Wartime Silver Nickels: to reduce the amount of copper and eliminate the nickel that were need for the war, the Mint produced nickels using an alloy of .560 copper, .350 silver, and .090 manganese. To distinguish these coins from regular nickels, the Mint added a large mint mark over Monticello on the reverse. It was the first time the Mint used a “P” mint mark on any coin. Since the mint mark makes them unique, one from each mint would make a nice example. Maybe one from each year with each on representing one Mint. You can find nice uncirculated examples for an average of $5 each without looking too hard.
✓ 2004-2005 Westward Journey Nickel Series: After the success with the start of the 50 State Quarters series, to honor the 200th anniversary of the exidition by Meriwether Lewis and William Clark in the newly purchase Louisiana Territory and westward, congress authorized this two-year four coin series to commemorate the journey. These modern circulating commemoratives are readily available and the four should not cost a lot of money, even as uncirculated coins. Make sure you find all four coins: 2004 coins with the left-facing portrait with the Peace Medal and Keelboat designs on the reverse. The 2005 coins had a wonderful obverse portrait designed by Joe Fitzgerald that included the word “Liberty” reproduced from Jefferson’s writing. The reverse included the American Bison and “Ocean in View.”
✓ 2006-Present Front Facing Portrait: With the return of Monticello on the reverse, a new front-facing portrait by Jamie Franki based on the 1800 portrait painted by Rembrant Peale and includes the “hand written” version of “Liberty” on the obverse.

An interesting aspect of this collection is that the coins are of all the basic metals used in non-gold coins. The 2-cent pieces were made from copper while the 3-cent coins had one type made in silver and anther in nickel. While most of the 5-cent coins were made of copper-nickel, the wartime composition removed the nickel and lowered the copper content by adding silver and manganese. It is a good representation of coinage metals circulating in the United States.

This is one set where it was difficult to think about how to keep it to 20 coins. Depending on where you shop, your patience, and your budget, this is a collection that can easily be expanded.

If you decide to use this guideline for your set, do not limit yourself to my suggestions. Consider other options. Consider adding another page. Make it personal. Make it yours.

Most importantly: HAVE FUN!

2013 Will Be Interesting

We end numismatic 2012 almost the same way as we began, discussing what to do about the one-dollar coins. The over production lead to a quite a number of bills introduced in congress to try to fix the perceived problem but none ever made it to a hearing, let alone out of a hearing. Rather, the U.S. Mint hired Current Technologies Corp. (CTC) to perform an alternative metals study required by congress.

When the U.S. Mint finally published the report and a summary they made a recommendation to study the problems further because they could not find suitable alternatives to the current alloys used. While reading the summary gives the impression that the request is reasonable, the full 400-page report describes the extensive testing and analysis that the U.S. Mint and CTC performed leaving the reader curious as to why they were unable to come to some sort of conclusion—except that there is no “perfect” solution. This is a story that will continue into 2013 and be on the agenda for the 113th congress when it is seated on January 3, 2013.

The other part of the discussion is whether or not to end the production of the one-dollar Federal Reserve Note. It was the last hearing before the House Financial Services subcommittee on Domestic Monetary Policy and Technology for Rep. Ron Paul (R-TX) and the 112th congress that will certainly carry over into 2013.

This does not mean the Bureau of Engraving and Printing is without its controversy. In order to comply with the court order as part of American Council for the Blind v. Paulson (No. 07-5063; D.C. Cir. May 20, 2008 [PDF]) and the subsequent injunction (No. 02-0864 (JR); D.C. Cir. October 3, 2008 [PDF]), the BEP has been working to provide “Meaningful Access” to United States currency.

Secretary of the Treasury Timothy F. Geithner approved the methods that will be used to assist the blind and visually impaired to U.S. currency on May 31, 2011. In addition to examining tactile features, high contrast printing, and currency readers, the BEP issued a Request for Information for additional information to implement their plan. The BEP will be participating at stakeholder organization meetings to socialize and refine their plans. There will probably be few announcements before the conventions of the National Federation of the Blind and American Council of the Blind this summer.

Another building controversy from the BEP is whether the redesigned $100 notes will find its way into circulation. Introduced in April 2010, full production has been delayed because of folding during the printing process. The situation has to be so severe that the BEP has not announced a new release date and delayed releasing the 2011 CFO Report [PDF] to the end of Fiscal Year 2012 while finding a way to bury the scope and costs of the delays. Will the redesigned $100 Federal Reserve Note be issued in 2013? Stay tuned!

Staying with currency issues, there should be a new series of notes when a new Secretary of the Treasury is appointed. It is known that the current Secretary Timothy F. Geithner wants to pursue other options. If the BEP follows its past practice, notes with the new Secretary of the Treasury’s signature would be Series 2009A notes. There have been no reports as to whether Treasurer Rosie Rios will continue in her position.

As for other products, the BEP will continue to issue specially packaged notes using serial numbers that are either lucky numbers (i.e., “777”) or ones that begin with “2013” as part of their premium products. Of course they will continue to issue their sets of uncut currency.

Another carry over from 2012 will be whether the U.S. Mint will issue palladium coins that were authorized by the American Eagle Palladium Bullion Coin Act of 2010 (Public Law No: 111-303 [Text] [PDF]). The law requires that the U.S. Mint study of the viability of issuing palladium bullion coins under the Act. That report was due to congress on December 14, 2012 but has not been made public at this time.

Bibiana Boerio was nominate to be the Director of the U.S. Mint.

Bibiana Boerio was nominated to be the Director of the U.S. Mint.

One final bit of unfinished business from 2012 is the nomination of Bibi Boerio to be the 39th Director of the U.S. Mint. The former Chief Financial Officer of Ford Motor Credit and Managing Director of Jaguar Cars Ltd. has recently been a Special Advisor to the President of the Detroit Regional Chamber of Commerce while waiting for the Senate to confirm her nomination. The Senate will have quite a few presidential nominations on its agenda that will he taken up in the new congress.

Other than the higher prices for silver products, the U.S. Mint should not generate controversies for its 2013 coin offerings. There will be no changes for the cent, nickel, dime, and half dollar with the half dollar only being struck for collectors since it has not been needed for circulation since 2002. These coins will be seen in uncirculated and proof sets with silver versions for the silver sets.

For the sets with the changing designs, the reverse of the 2013 America the Beautiful Quarters Program will honor:

There has been no confirmation from the U.S. Mint whether they will strike San Francisco “S” Mint quarters for the collector community as they did in 2012.

The 2013 Presidential $1 Coins ends the 19th century and begins the 20th century with some of the more interesting Presidents of the United States in history:

If we honor the Presidents we have to honor their spouses. In 2013, the First Spouse Gold Coins will honor:

  • Ida McKinley
  • Edith Roosevelt
  • Helen Taft
  • Ellen Wilson (died 1914)
  • Edith Wilson (married Woodrow Wilson 1915)

The U.S. Mint has not released designs for these coins at the time of this writing.

2013 Native American Dollar Reverse Design

2013 Native American Dollar Reverse Design

The 2013 Native American $1 Coin will feature a reverse commemorates the Delaware Treaty of 1778. Since the dollar coin does not circulate, only collectors have enjoyed the great designs of this series since it began in 2009.

Congress has authorized two commemorative coin programs for 2013:

American Eagle coin programs will continue with the bullion, collector uncirculated, and proof coins for both the silver and gold. The American Eagle Platinum bullion coin will continue to use its regular reverse while the American Eagle Platinum Proof will continue with the Preamble Series. The Preamble Series is a six year program to commemorate the core concepts of the American democracy as outline in the preamble of the U.S. constitution. For 2013, the reverse will be emblematic of the principle “To Promote the General Welfare.” The U.S. Mint has not issued a design at this time.

Currently, there are no announced special products or sets using American Eagle coins and no announced plan for special strikings such as reverse proofs or “S” mint marks.

Finally, we cannot forget the American Buffalo 24-Karat Gold Coins that will be available as an uncirculated coin for the bullion/investor market and a proof coin for collectors.

And I bet you thought that 2013 would be a mundane numismatic year!

A TR Collectible

My earliest memory of learning about Theodore Roosevelt was going with the Cub Scouts to visit Sagamore Hill, his estate in Oyster Bay, New York. Roaming through Sagamore Hill with my fellow Scouts brought fascinating images of Roosevelt’s trophies from his various hunts. The skins, heads, and an ashtray made from an elephant’s hoof made quite an impression on this group of 7-8 year olds.

A special memory was of the bathrooms. Aside from looking very primitive compared to what we have in our homes even in the mid-1960s, but our Cub Master, who was also my best friend’s father, was a plumber. At times, he was worked for New York City as a plumbing inspector. We had fun poking fun at him using the facilities at Sagamore Hill as a background!

When I learned more about United States history in high school, I read more about the life and presidency of Teddy Roosevelt. I was impressed with his background of working through his health issues, was fascinated to read of his life in the Badlands in South Dakota, and interested to read about his political life as someone who demonstrated a great regard for the law and someone who wanted to make things better. Although I was not as physical as Roosevelt, his principled stance made an impression on me.

Before returning to collecting, I read The Rise of Theodore Roosevelt by Edmund Morris. It was not the easiest read because Morris used the late Victorian writing style that was popular during Roosevelt’s life. Once I became used to the style, Morris brings the reader along with Roosevelt into the mud of the Badlands, the halls of the New York legislature, as one of the police chiefs of New York City, Governor of New York, Secretary of the Navy, and Vice President. Through Morris’s words, it was like riding that freight train what was Theodore Roosevelt.

I returned to collecting in 2001 following the death of my first wife. During a particular spending spree, I bought Morris’s second volume, Theodore Rex. Although I never finished this book—only because of timing—my interest in Roosevelt continued to grow.

Then I learned about Roosevelt’s “Pet Crime.” I learned how Roosevelt conspired with Augustus Saint Gaudens to improve U.S. coin design. I learned how Roosevelt was influenced by immigrant Victor David Brenner to have the U.S. Mint issue the Lincoln Cent. I learned how the seeds of his “Pet Crime” lead to what has been called a renaissance of U.S. coinage.

To say I am a sucker for Theodore Roosevelt memorabilia would be an understatement. Although I do not have many pieces, finding cool items is always a thrill. Imagine how my eyes lit up when I found a Theodore Roosevelt card with a 1919 Buffalo Nickel. I did not know much about it, but I had to buy it. The final cost was not that expensive, but it was so cool that I did not care.

When the card arrived, I was a little disappointed in that the card was modern and the nickel was very worn. I can change the nickel since 1919 Buffaloes are not that expensive. But I had to find out more about the card.

After asking around, I found that the company, Authenticated Ink, is an autograph collecting company that issued these cards in 2008 as a promotion. Authenticated Ink printed cards of sports and historical figures that included coins from the era of the person depicted on the card. I have had problems contacting Authenticated Ink (emails have not been returned), but sources tell me that there were not many of these cards issued.

It is a very cool collectible and has been added to my “oh neat” collection.

60 Minutes on Minting Costs

CBS News’ ubiquitous weekly news magazine, 60 Minutes, broadcasted a report on Sunday that discussed the costs of producing cents and nickels (see embedded video below). According to the US Mint, over 8 billion copper-coated zinc cents were produced ($80 million) costing the Mint $134 million to produce. Producing 1.3 billion nickels ($65 million) made with the .75 copper alloy that has been in use since 1866, and cost $124 million.


Should We Make Cents?
Source: CBS News

Mint Director Edmund Moy, who was interviewed for the report by Morley Safer, said that the costs were a direct result of the rising metal prices. “You know, coins are made out of metal,” Moy said. “And worldwide demand for copper, nickel and zinc have dramatically increased over the last three years. That’s what’s primarily driving up the cost of making the penny and nickel,”

Stephen Dubner, the co-author of the bestseller Freakonomics, puts the penny in the same category as your appendix and other useless relics. “It’s just not useful,” Dubner said. Unfortunately, Dubner may not have heard that researchers may have found that the appendix does have a useful function.

The focus of the report was to look at the economics of continuing the production of Lincoln Cents. While the report mentioned the tradition of the cent and the coin features Abraham Lincoln, probably the country’s greatest president, and the 2009 redesign program, the argument about removing these coins from circulation are based on their economic worth. But if they are useless and have no value, then why is there a demand for these coins being produced?

I have previously explained that the Mint’s primary “is to produce an adequate volume of circulating coinage for the nation to conduct its trade and commerce.” To carry out this mission, the Mint distributes coins to the Federal Reserve System banks and branches as necessary. Regardless of the cost of production, is it really necessary for the Mint to produce so many cents for circulation?

Unlike commemorative or other collectible items, the number of business strike coins distributed is determined by the individual Federal Reserve banks. As the need arises, the Federal Reserve banks place orders with the Mint for coins to distribute to the nations banks. From those banks, coins are circulated to the public through business or teller operations. Although there are some stockpiles of under used coinage (mostly halves and dollars), the Mint uses “just-in-time” inventory management and distribution like many other manufacturing facilities. Thus, productions of business strikes are based on the demand created by the ordering practice of the various Federal Reserve banks.

If the cent is obsolete and economically infeasible with little buying power, then why is the Federal Reserve ordering so many for circulation?


How Cents are Made
Source: CBS News

Eliasberg 1913 Nickel Sells for $5 Million

An unnamed California-based collector purchased the Eliasberg 1913 Liberty Head Nickel for $5 million. The finest known of the existing 1913 Liberty Head Nickel was graded PR66 by the Professional Coin Grading Service was owned by Legend Numismatics of Lincroft, New Jersey and Bruce Moreland, a Washington state business executive. They paid $4.15 million in May 2005 for this coin.

The pedigree of this coin is attributed to Louis E. Eliasberg Sr., a Baltimore banker whose renowned collection included “one of everything.” His collection was sold following his death in 1976.

Of the five examples known to exist, one is owned by the Smithsonian Institute and the other by the American Numismatic Association.

Slab image from Legend Numismatics.

Westward Journey into History

With the authorization provided to the US Mint under Section 8 of the San Francisco Old Mint Commemorative Coin Act (Public Law No 109-230 [GPO: Text, PDF]) expiring, sets and rolls containing the 2005 Westward Journey Nickels are no longer for sale. If you missed the opportunity to purchase these items, you will have to find them in the secondary market.

If you are still looking for nice collectibles for the Westward Journey Nickel series, the Mint continues to sell the First Day Coin Covers for the 2004, 2005, and 2006 nickels.

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