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.

Save now for the 2019 Apollo 11 Commemorative Coins

Artist’s conception of the common reverse for the 2019 Apollo 11 commemorative coin program.

Every year since coming into office, President Barack Obama and his family packs up and flies to Hawaii for an end of the year vacation. Obama was born in Hawaii and still has some family on Oahu. Before leaving Washington, he will sign whatever bills are sent to him by congress. According to the White House News Feed, President Obama signed the Apollo 11 50th Anniversary Commemorative Coin Act on Friday, December 16, 2016!

Based on my posts from the last few weeks, I am sure you can tell I have a fascination with space. In fact, if there is such thing as reincarnation, I want to come back in the future to be able to travel around the universe in a manner similar to what we see in the movies. It is sad that there is no real enthusiasm for space exploration as there was when Apollo 11 landed on the moon!

In July 1969, my family lived in the Long Island suburbs of New York. The year before Apollo 11, my father bought a new, large RCA color television. Aside from learning that the beginning and end of Wizard of Oz was in black-and-white, I was able to watch the launches of the world’s largest Roman candle, the Saturn V rocket. Before Skylab and the Shuttle programs, it was a marvel of human achievement. I loved watching the liftoffs from Cape Kennedy and always wanted to go see one in person. I never did get to see a rocket launched, but I hope to some day.

This was a time when kids went outside to play, even in the summer evenings. We played a lot of baseball-related games including setting up a “field” in the street. Nobody was in the street. We were all home watching television and watching overhead shots of Mission Control in Houston. Even through the television, you could sense the tension until Neil Armstrong announced, “Houston, Tranquility Base here. TheEagle has landed.”

It wasn’t until years later when I learned more about the Cold War when I understood why it was more important for the United States to land and walk on the moon first. All I knew was it was very cool that an American was up there. It made Star Trek seem possible!

The moon walk was Monday night. Again, we were staring at the television watching the enactments as to what to expect. There were mockups of the Lunar Module and astronauts demonstrating what Armstrong was supposed to do. I remember the concentration on the “D-Ring,” the D-shaped handle that Armstrong had to pull on to open the door that had the camera. There was a question that the ring had to survive the landing and that the door could have jammed. We would have a historical moment without it being recorded on video!

“These are the first pictures ever broadcast from the moon,” was the words by whoever was on television. I remember the words but not who said them. Pulling on the D-ring worked and the world was watching. We watched as Neil Armstrong climbed down the ladder onto the surface of the moon. After a brief stop to remove the cover on the plaque that was attached to the ladder, Armstrong put both feet on the footpad of the lunar module. After a quick bounce step from the footpad to the surface of the moon, Armstrong gave his famous like, “That’s one small step for [a] man, one giant leap for mankind.”

There has been a “controversy” about whether Armstrong said “… one small step for man,” or “… one small step for a man.” Whatever is the correct version does not take away from the feat and the fact that Neil Armstrong was the first human being to set foot on Earth’s only natural satellite!

While NASA was the inspiration for many of the modern technologies we enjoy today, only Apollo 11 took it to the level of defining U.S. technology. While Skylab and the Shuttle programs were far more advanced, Apollo 11 stands as one of the 20th-century’s most amazing feats.

Needless to say, I am excited!

  • Commemorative program issued in 2019
  • Required design elements:
    • Convex in shape “to more closely resemble the faceplate of the astronaut’s helmet of the time”
    • “The Secretary shall hold a juried, compensated competition to determine the design of the common obverse of the coins minted under this Act, with such design being emblematic of the United States space program leading up to the first manned Moon landing.”
    • Winning designer to receive no less than $5,000 for their design.
    • Common reverse design “shall be a representation of a close-up of the famous ‘Buzz Aldrin on the Moon’ photograph taken July 20, 1969, showing just the visor and part of the helmet of astronaut Edwin ‘Buzz’ Aldrin, in which the visor reflects the image of the United States flag, astronaut Neil Armstrong, and the lunar lander.”
  • Mintage Limit: 50,000 $5 gold; 400,000 silver dollars; 750,000 clad half-dollar; 100,000 five-ounce silver proof dollars
  • Surcharges of $35 per $5 gold; $10 per silver dollar; $5 per half-dollar; and $50 per five-ounce bullion.
  • Payouts: 50-percent to Smithsonian Institution’s National Air and Space Museum’s “Destination Moon” exhibit; 25-percent to the Astronauts Memorial Foundation; and 25-percent to the Astronaut Scholarship Foundation.
I may not be much of an artist but I can play a little with Photoshop!

Return of the Centennial Gold Merc

The U.S. Mint announced that they will sell off the remaining Mercury Dime 2016 Centennial Gold Coin starting at 12 Noon Eastern Time on Thursday, December 15, 2016. Although the website says the price is $200, it is likely that the opening price may be $205 based on the U.S. Mint Centennial Gold Price Grid and the average price of the London Gold Fix.

Order limit will be one per household.

Coins that will be on sale are coins that were left over when the sale was closed earlier this year, orders that were not completed for many reasons including credit cards that could not be processed, and a few returns that are not “spoiled.” If you order, you will not receive coins that were damaged and return.

There are only a few thousand left. Good luck!

West Point Gold

Gold storage at West Point in 1942 (screen grab)

While we cannot tour or see inside the Bullion Repository at Fort Knox, Kentucky, the U.S. Mint just released a B-Roll video of scenes inside the gold repository at the West Point Mint.

Gold stored at West Point is called “working stock.” This is the gold that the U.S. Mint uses for striking coins. Depending on the demand, the gold you will see in the video will not be there in a year. It will be used for American Gold Eagles, gold commemoratives, and gold medals cast for congress and the president.

West Point has been called “The Fort Knox of Silver” because it is where the U.S. silver reserve is located. It is also the location for the working stock of silver used by the U.S. Mint. All of the U.S. Mint facilities have working stock of silver used to strike silver coinage. However, since most gold production is struck out of West Point and Philadelphia, most of the working stock of gold is in those facilities.

West Point is the primary manufacturer of gold bullion coins.

In the video at the 50-second mark, someone is weighing a bar of gold. He says the manufacturer claim is that it weighs 400.100 (troy ounces) but actually weighs 400.096. A gold bar weighing 400.096 troy ounces is 12.444 kilograms or 27.435 pounds. With the price of gold currently $1,176.60 per troy ounce (as this is being written), the melt value of that gold bar, which is .9999 fine looking at the stamp on the bar, is $470,752.95.

Video courtesy of the U.S. Mint.

What is the Mint doing with the Mutilated Coin Redemption Program

Coins found in the recycling stream.

Coins found in the recycling stream.

Last year, the U.S. Mint suspended its Mutilated Coin Redemption Program when it alleged that a company in New Jersey was importing counterfeit coins from China to redeem as mutilated coins. Formal charges were brought against the persons involved in March and the U.S. Mint extended the suspension indefinitely last May.

The mutilated coin redemption industry is a multi-million dollar business. Most of the businesses involved with this industry are recyclers that find coins in cars and machines that are recycled. Recycling these metals require the use of heavy machinery that takes apart the items and compresses them to transport to processors. Six compressed cars can take up the same amount of space as one full-size car. More can fit in the same space if the metal is shredded.

Although some of the coins are removed from the cars, others end up in the machinery. After processing through high pressure and high heat, the found coins are in no condition to be sent to banks for redemption. Most of the time, these coins are cut, bent, or badly scorched making them impossible to process using normal coin counting mechanisms. According to an industry representative, recyclers can find an average of over $2 per car and over $10 in coin-operated machines as they are taken apart and crushed.

Scrap IkeCoin-operated machines are not as well made as people suspect. For every time you might have had a coin “stuck” and lost in the machine, the coin might have dropped into an area outside of the coin bin and between internal parts. When the machines are serviced, the coins are usually dumped into bags and taken back to the company to be placed into coin counting machines. In many cases, the count between the expected amount of money and the number of items sold are not exact. This type of “shrinkage” is part of their business risk plans.

When the coin-operated machines are taken out of service, many are cleaned and inspected for loose coins. But the way the machines are designed, it is common that many coins are missed. They will continue to stay within the machine until it is discarded for scrap.

Cars and other machines sometimes gain a second life overseas. Machines are sold as surplus, repaired by their new owners and put into service around the world. These machines end up in the recycle system when they fall beyond the ability to be repaired. International recyclers recover U.S. coins from these cars and coin-operated machines. This is not including the scrap cars that are shipped overseas for recycling. Brokers buy the coins from recyclers and ship them to the United States. Currently, there is an estimated $1 million in mutilated coins being held by Customs and Border Patrol (CBP) while the redemption program is suspended. It is also estimated that more than $50 million in mutilated coins are being stored overseas while shipments are suspended.

As the mutilated coins accumulate, recyclers are now paying for storage and security over and above their regular business expenses. Some have sold their mutilated coins to other recyclers and brokers at a discount to avoid paying the storage costs. Those accumulating these mutilated coins are hedging on the mutilated coin-recycling program being restarted soon.

Brokers handling the import of these coins have filed suit against the CBP for blocking and holding the shipments of mutilated coins. Plaintiffs cite a report from a company called FormerFeds Group, a company made up of former federal lawyers and other senior officials, that said the accusation of importing mutilated coins from China is not true and that the amount of “junk” (non-coins in the batch) are within tolerances of the program. They are requesting that the court grants an order to release the coins and to compel the U.S. Mint to resume the Mutilated Coin Redemption Program.

Hong Kong-based Wealthy Max Ltd. publicly opened and sampled 13 tonnes of mutilated U.S. coins waiting for shipment in Hong Kong.

Hong Kong-based Wealthy Max Ltd. publicly opened and sampled 13 tonnes of mutilated U.S. coins waiting for shipment in Hong Kong. The coins come from piles of metal generated by automotive shredders and via incinerated waste streams.

Without fanfare, the U.S. Mint published a request in the Federal Register (81 FR 75922) asking for comments regarding the Mutilated Coin Exchange Program to supplement the information it has already gathered. The notice was published on November 1, 2016, without a follow up from the U.S. Mint press office. The U.S. Mint allowed for a two-week comment period that ended on November 15, 2016.

According to the Federal Register, the “Mint is considering include requiring participant certification, coinage material authentication, chain of custody information, and annual submission limitations.” They were seeking comment on that and other possible factors to better secure the program. There is no indication as to whether this is tied to the case brought by the brokers handling foreign recycling.

Coins make up a very small minority of the amount of scrap in the recycling stream. But with the problems caused by the U.S. Mint’s refusal to properly deal with this issue, it is taking up a lot of time and money both here in the United States and with long time business partners abroad.

Credits

Can we now move on?

In 1916, the U.S. Mint began to circulate three iconic coin designs that remain favorites amongst collectors. To celebrate, the U.S. Mint issued 24-karat gold centennial versions of the Mercury Dime, Standing Liberty Quarter, and Walking Liberty Half-Dollar. The designs of the coins are the same as their century-old counterparts except the gold specification was added. Earlier this month, the U.S. Mint released the 2016-W Walking Liberty Half-Dollar 24-karat gold coin to complete the series.

With the release of the gold Walking Liberty Half-Dollar, every coin design that was part of President Theodore Roosevelt’s “pet crime” that has gone out of circulation, except the Bela Lyon Pratt quarter and half-eagles and the Saint-Gaudens $10 eagle, have been reproduced at least once. Only Victor D. Brenner’s Lincoln Head Cent design remains in circulation even though the reverse has been redesigned a few times.

Isn’t it time we move on?

Let’s forget the legal limitations placed on the U.S. Mint that only allows them to do a tribute like this in gold even though the original coins were struck in silver, how many collectors are really interested in buying these coins? How many can afford these coins?

Judging by the listings for online auctions and dealers that specialize in modern precious metals, it seems that the alleged sellout of the gold Mercury Dime was because of speculation. While there will always be some opportunists in any market, the appearance of the churn in that market feels more like people looking to make money rather than collect, especially since its $209 issue price is more affordable.

Now, both the Standing Liberty and Walking Liberty gold coins are still available. With the limited availability, why aren’t collectors buying these coins?

Aside from the cost of a gold coin, how many younger collectors or even those that are a part of Generation X have any connection to those coins? It is possible we Baby Boomers have seen these coins in circulation, even sparingly. I was able to find Mercury dimes and Buffalo nickels as late as the very early 1970s before they were all removed from circulation. My interest in collecting started when I found Indian Head cents in pocket change.

I am not saying that these designs are unworthy of a tribute. As a collective, they are arguably the most iconic designs of U.S. coinage. But what many consider the best of the best will live on as part of the American Eagle, Buffalo 24-karat, and the soon-to-be palladium bullion programs.

Isn’t it time we move on?

Sales of mint and proof sets are down. Sales of commemorative coins are not meeting expectations where only a few have been sellouts. And the only modern coin that has seen any respect from the Baby Boomer and older collecting community was the 2014 50th Anniversary Kennedy Half Dollar gold coin.

It is time we move on.

The 115th congress will be sworn into office on January 3, 2017. Giving the congress time to get settled including my representative who will be entering his first term in the House, I will write to him to propose a that a silver program similar to the 24-karat gold program be created. Maybe, if coins are offered in silver, a more affordable metal, we can use those coins to generate additional interest in collecting.

It may not be much, but it is a start!

Coin images courtesy of the U.S. Mint.

Post election numismatic analysis

Rhett Jeppson, nominated to be the 39th Director of the U.S. Mint

Rhett Jeppson, nominated to be the 39th Director of the U.S. Mint

Most of the votes have been counted. Electors to the Electoral College have been selected. The post-election analysis is in high gear. Why not add the numismatic twist to the environment.

The immediate impact of the election results is that Rhett Jeppson will not be confirmed to become the Director of the U.S. Mint. Even though the Senate Banking Committee held a hearing for his nomination on March 15, the chance of the GOP-led Senate confirming any of President Obama’s appointment nominations are non-existent.

Jeppson was hired in January 2015 as Principal Deputy Director. Jeppson was hired as a member of the government’s Senior Executive Service (SES) program. In July, it was announced that Jeppson would be nominated as the Director. Since the nomination will likely die in committee, Jeppson will remain on the U.S. Mint staff as a government employee. Although he has not announced his intentions, Jeppson is likely to continue as Principal Deputy Director.

It is unlikely that the next administration will nominate Jeppson or anyone in the near future. Considering that there has not been political appointee running the U.S. Mint since January 2011, maybe President Obama could use his power to convert the term appointment into a permanent government employee. This way, the U.S. Mint can be run by competent managers rather than a pol who might do something like not ordering enough planchets to maintain a major bullion program.

The Bureau of Engraving and Printing is not affected by a change in administrations because the position of the director is a permanent government employee. Len Olijar will remain Director of the BEP as long as he is a government employee in good standing.

As for any of the pending legislation, do not count on anything being passed. Given the results of the election, sources say that the partisan rancor is so fervent that even the most cordial relationships have turned icy. These feelings are not limited to cross-party relationships. There is a growing divide between ideological members in both parties that could almost split the congress into four parties.

To suggest that the partisan bickering to escalate during the lame duck session would be an understatement. Remember, congress passed a continuing resolution, not a real budget, in late September that will expire on December 9. If a budget is not passed by December 9 then the government will have to be shutdown.

The 114th congress will adjourn being one of the most ineffective congress on record.

For the 115th congress that will convene on January 3, 2017, there will be 239 Republicans and 193 Democrats with three runoffs pending (two in Louisiana). Although the Republicans lost 7 total seats, they continue to hold a majority. Currently, Rep. Jeb Hensarling (R-TX) is the Chairman of the House Committee on Financial Services. Although it is not known if Hensarling will remain as chair of this committee, it is likely the new leadership will continue the previous policies. If the attitudes of this committee do not change, there may be very few commemorative coin programs that get through this committee.

Although revenue generating bills are required to be introduced in the House of Representatives (U.S. Constitution, Article I, Section 4), the Senate has been known to introduce commemorative coin bills without argument from their House counterparts. For the 115th congress, the Senate will have 51 Republicans and 48 Democrats with a runoff in Louisiana scheduled for December 10. However, Senate rules make the composition somewhat irrelevant because of their ability to filibuster.

Under the Senate’s filibuster rules (Senate Rule XXII), a senator can inform the presiding member that they intend to filibuster the debate. At that point, the presiding member will set the bill aside to allow other business to continue because the Senate can only work on one item at a time. This means that a filibuster stops all other floor actions. By setting the bill aside and not bringing it to the floor, this allows for other senate business to continue while the leadership tries to gather support for a cloture vote.

Cloture, or closure, is the act to end the free-flow debate of the senate and apply restrictions, such as a 30 hour limit on debate. Cloture requires a three-fifths vote of the senate (60 votes) to agree on cloture. Anyone who remembers some of the past discussions on the composition of the senate, when one party controls 60 seats, they called that a “filibuster-proof majority.” Otherwise, any senator can threaten a filibuster and have that measure buried.

Although it is unlikely that the senate would filibuster the vote on a commemorative coin bill, but it would be obstructed by the another bill ahead of it in the queue.

Even though I would like for the Apollo 11 50th Anniversary Commemorative Coin Act (H.R. 2726 and S. 2957) to pass, I will not be holding my breath during the lame duck session this year or a new version introduced anytime next year.

Good morning Philadelphia

U.S. Mint Philadelphia FacilityHello from Philadelphia!

I am in Philadelphia to attend the U.S. Mint’s Numismatic Forum. According to the U.S. Mint, “The purpose of the event is to gather leaders and stakeholders of the numismatic community to explore ways to stimulate and revitalize the hobby. As we approach the U.S. Mint’s 225th anniversary next year, we hope this unique opportunity to examine and discuss the Mint’s past, present and future will help move all the elements of the numismatic industry forward.”

I do not know who will be there but I am sure that I will see many of the regulars of the numismatic community. From the U.S. Mint, we will probably hear from the current Principal Deputy Director Rhett Jeppson and others from the Mint’s staff. Here is an overview of the schedule:

  • Arrival and welcome from the U.S. Mint along with introductions.
  • Recognizing the past:
    • U.S. Mint Heritage Assets overview
    • Smithsonian Numismatic Collection overview
  • The Present:
    • Mint product update and marketing initiatives update
    • “Invigorating the Coin Collecting Hobby” panel discussion
  • The Future: Workgroup discussions with reports from the workgroups
  • Visit to the Philadelphia Mint

For those of you who will not be there and would like to follow along, you can follow @coinsblog on Twitter as I send out periodic updates. The widget on the upper-right side of the page can also be used to follow the progress. Also, when I can post pictures, they will be copied to the Pinterest on the board “Numismatic Forum” or watch the widget below.

Of course, there will be a report posted over the weekend!

What do you think it’s worth?

1809 Madison Indian Peace MedalFinding coins in pocket change can be a lot of fun. Then there are those who find hoards of coins buried in the ground or just stored somewhere that people forgot. From shipwrecks to treasure hunts, we all dream of finding the next jackpot somewhere.

On your great grandfather’s farm, a worker was plowing the field and found a silver medal. It has the image of President James Madison on one side and what looks like a peace medal on the other. Rather than letting go, great grandpa traded three hogs for the medal.

The medal gets handed down from generation to generation until one of his ancestors takes the medal to Antiques Roadshow to find out what it is worth.

You are told that it is a silver James Madison Indian Peace Medal. The 1809 medal was designed by assistant engraver John Reich and struck at the U.S. Mint in Philadelphia. It is not the largest of the medals but at 2½-inches, it is a fairly significant medal.

What is it worth? See what Jason Preston of Jason Preston Art Advisory & Appraisals of Los Angeles said about the medal on Antiques Roadshow:

Did you guess right?

Image and video courtesy of WGBH and the Antiques Roadshow

We still need help PLEASE

Mrs. Janas of Juniata Park Academy in  Philadelphia, PA (Grades 6-8)

Mrs. Janas of Juniata Park Academy in
Philadelphia, PA (Grades 6-8)

Last month I came across a listing on the fundraising site DonorsChoose.org to raise money for a class in Juaniata Park Academy in Philadelphia so the “students would love to expand their knowledge and be able to identify with the real world today and visit places around the area.” This would allow the class to visit the Philadelphia Mint and the Philadelphia Federal Reserve Bank to learn more about our money.

The project can be funded for a paltry sum of $512.92. With the donations matched by the Dottie Lutz Foundation, we can send underprivileged students to visit the Mint and the Fed for $256.46!

As I said in my original post, maybe a few would become interested in numismatics. Seeing the exhibits and learning how money is made can inspire these children to become collectors. And as inner-city students in a minority community, adding this diversity to the hobby is one of the best gifts we can give the hobby.

There is ONE MONTH to go on this project.

Previously, I asked to see if nine readers of the Coin Collectors Blog would step in with a $25.00 donation. Thankfully, it appears that only one person did step up. This effort now needs $413.00 to be funded meaning it will take is $206.50 in donations for this to be funded!

I am asking for everyone to give any amount to fund this project.

It would be wonderful if the numismatic community stepped up to help fund the visits to the Mint and Fed for these students. Let’s see if we can influence some students to become numismatists.

Will you please join me?

Image courtesy of DonorsChoose.org

Pin It on Pinterest

%d bloggers like this: