Amongst all of the noise on Capitol Hill, the one area where no noise has been made is in the numismatic arena. For the last three months there has been no bill introduced, heard in committee, or acted on by either chamber of congress. Although there have been some hearings on a few issues, the last numismatic-related bill that had any congressional action was the introduction of the Pro Football Hall of Fame Commemorative Coin Act, S. 1842, introduced by Sen. Rob Portman (R-OH) in December.
This type of inactivity is unusual for congress. Regardless of party, congress is always looking to curry favor with their constituents and groups associated with their constituents by introducing commemorative coin legislation. Over the last few congresses (a two-year term), there will be over 40 coin-related bills that die in committee where very few even get a cursory hearing.
As an aside, a friend pointed out that the U.S. Mint did not bring 50,000 gold coins to the Whitman Baltimore Expo and wondered how many of those coins were purchased by baseball’s owners and members of the Baseball Hall of Fame. It would be interesting to see the effect of organized baseball on the sale of these coins.
Also on the schedule for 2015 is the United States Marshals Service 225th Anniversary commemorative coin series. The Marshal Service commemoratives will include a gold $5, silver dollar, and clad half-dollar coins. I do not think this will be as popular as the 2005 Marine Corps 30th Anniversary commemorative coins.
Officially, the 2016 scheduled commemorative will be the Mark Twain Commemorative coin program that will only include gold $5 and silver dollar coins. However, considering Twain’s mindset about being famous, I think he would be amused by having a commemorative coin made in his honor. I might call it the “Mark Twain Amusement commemorative.”
The only other commemorative coin with legislation that has passed congress and signed by the president is the 2017 Lions Clubs International Century of Service Silver Dollar.
Given the law says that there will be no more than two commemorative coin series per year (31 U.S.C. §5112(m)); and given that the next time only one commemorative coin is scheduled to be issues is in 2016, there is plenty of time for congress to do “something” and pass one of the bills that is currently waiting for their action.
2014 National Baseball Hall of Fame Commemorative Proof $5 gold coin obverse
The U.S. Mint reports that the $5 gold National Baseball Hall of Fame Commemorative Coin has sold out. It may be the fastest sell out of any gold commemorative coin in the modern commemorative era lasting only through the first weekend.
It has been speculated that the U.S. Mint will strike more coins than the law (Public Law 108–291 [PDF]) allows on order from the Secretary of the Treasury. No official decision has been announced by either the U.S. Mint or the Department of the Treasury. However, it is questioned whether it is legal for the Secretary to make this decision unilaterally or requires an act of congress. There seems to be evidence that someone had previously approved an increase for the 2005 Marine Corps Commemorative dollar, but there is no authoritative source for proof.
Collectors who have contacted me are not happy with the U.S. Mint. Many believe that the high limit (50 coins per “household”) was too high. When I posted images of the graded baseball coins, several commented that they felt that dealers “abused” their access to the immediate supply of coins that were available in the U.S. Mint booth at the Whitman Baltimore Expo that many collectors did not have a fair chance.
None of my correspondents would bemoan a dealer’s ability to make money on the secondary market. But to do so by taking advantage of the U.S. Mint’s inability to manage its market as the lone producer of U.S. commemorative coins was considered excessive by many. Although I sympathized with their point of view since I could not purchase one for my collection, I questioned whether the U.S. Mint has an obligation to just sell the coins or satisfy market forces. But as many pointed out, the U.S. Mint is a government agency and has a responsibility to the people of the United States and not just the corporations.
While at the Whitman show I spoke with one of the U.S. Mint employees who said that they should have limited the number of coins someone can purchase at one time. Although they did enforce lower limits on the supply of coins sold on Saturday, the damage had been done leaving collectors to scramble to buy the coins on the secondary market or order them online. Those of us who order the coins from the U.S. Mint online catalog will have to wait until June 21, according to the notice sent to me. However, the website is saying that the proof dollar is backordered until July 7 while the clad proof half-dollar is will be available on April 10.
Cassie McFarland holds up Baseball Hall of Fame Commemorative Dollar with her design
Like many of my correspondents, it is difficult to believe that anyone at the U.S. Mint would be afraid that this commemorative would not sell. A simple search using your favorite search engine would have shown that the coverage of the striking of the first curved coin in U.S. Mint history was seen world wide. Even the image of Cassie McFarland, the artist whose design was selected for the obverse of the coin, holding one of the first strikes in her gloved hand was reproduced on news outlets throughout the world. You cannot buy that kind of publicity.
We are talking about baseball, America’s pastime. America’s game. Regardless of the accepted story of its founding, it is generally accepted that Major League Baseball was founded in 1869 making it the oldest organized league in North America. Not only was the coin released just before Opening Day for 2014, but the National Baseball Hall of Fame and Major League Baseball have been promoting this coin since the bill was signed.
I just received a notice from my credit card issuer that a charge was made when my card was not present. I did not make a charge today and it was for an odd amount. After visiting the credit card company’s website, the name of the entity that charged me was “DIRECT RESPONSE” but located at 801 9TH Street NW, Washington, DC. The address sounded familiar but I could not think of why. After entering it into a search engine I found that it is the address for the United States Mint Headquarters.
After receiving the email, I could not remember what I ordered from the U.S. Mint that they are charging my credit card? I remember I made my annual order of presidential coin covers, but I received those. A visit to the U.S. Mint’s online catalog jarred my memory to remembering that I ordered the 2013 Theodore Roosevelt Coins and Chronicles Set. A quick visit to the webpage noted that the items will be available for shipping on March 18, 2014. I received the notice on March 18, 2014. This means the set should arrive within a week!
I usually do not buy the Coins and Chronicles sets because the subjects do not interest me. However, I have always been a fan of Teddy Roosevelt. My first exposure to Roosevelt was as a youngster growing up on Long Island, I was fortunate to have taken a few field trips to Sagamore Hill, his home in Oyster Bay, New York. My other exposure to TR was visiting the memorial to him at the American Museum of Natural History on Central Park West in Manhattan. Every time I go to the AMNH, which still my favorite museum, I make sure I stop in the TR Memorial.
Roosevelt initiated the “Golden Age of American Coin Design.” Using his bully pulpit, he held the designs of the U.S. Mint Chief Engraver Charles E. Barber in contempt. In fact, Roosevelt had called Barber’s designs “atrociously hideous.” Roosevelt ordered coinage whose designs were more than 25 years old to be redesigned. Roosevelt was a fan of sculptor Augustus Saint-Gaudens and asked him to help redesign American coinage.
After Saint-Gaudens died of cancer, Roosevelt continued to look to revitalize U.S. coinage. He seized upon Abraham Lincoln’s 100th birthday to redesign the small cent. He was steered to Victor David Brenner, whose bust of Lincoln was used as the model for the new Lincoln Cent first issued in 1909. Not only was Lincoln the first president to appear on a circulating coin, but Brenner’s obverse design is still in use today.
Roosevelt called his coinage redesign his “pet crime.”
The coins and medals that are part of the 2013 Coins and Chronicles Set
Up until the release of the 2013 Roosevelt dollar, the president who is credited with starting the renaissance of American coinage design has not been honored on a United States coin. His image has appeared on coins but as part of an image of Mount Rushmore. You can find Roosevelt on the 1991 Mount Rushmore silver dollar and clad half dollar. Mount Rushmore also appeared on the reverse of the 2006 South Dakota State Quarter. Roosevelt’s image does not appear on the 2013 Mount Rushmore quarter.
If you want to learn more about our 26th president and have the time to read three books that were writing in Victorian-era prose, I would highly recommend the three books by Edmund Morris: The Rise of Theodore Roosevelt that covers his life up until his presidency, Theodore Rex about his presidency, and Colonel Roosevelt that discusses his life after he leaves office in 1909. For those who want a little lighter reading and in one book, I recommend Mornings on Horseback by David McCullough.
I have not yet read The Bully Pulpit by Doris Kearns Goodwin that covers the era of Roosevelt and his successor, William Howard Taft. Between Roosevelt and Taft, it was a time of bridging the Victorian era with the industrial age. It was a very interesting and important time in U.S. history.
2013 William Howard Taft $1 Coin
Taft is another president that does not get the respect he deserves. Aside from pulling the country out of the recession of 1909, Taft was the only president to have been appointed to the United States Supreme Court. He was the 10th Chief Justice serving from 1921 through 1930. For numismatists, Taft was responsible for convincing congress to pass the appropriate legislation that formed the Commission of Fine Arts. Although Roosevelt created the CFA by executive order, Taft felt that was not constitutional. He asked congress to codify the CFA’s existence into law.
For those in need of a good trivia question, Taft was the last president with facial hair, sporting a very cool looking handle-bar mustache.
One of the cans found as part of the Saddle Ridge Gold Coin Hoard
Anyone following the main stream media has heard of the Saddle Ridge Hoard, the 1,427 gold coins found in cans buried under a tree somewhere in California. The couple who found the coins and their location has been kept confidential to prevent potential prospectors on their property. Reports have surfaced that the find has opened a new gold rush in California.
This is not to say that treasures can only be found in California. As someone who has started a business dealing with collectibles, I have found interesting items at good prices in the most unexpected places. The concept is not to start digging where someone else made their discovery but look for clues to new finds elsewhere. Chances are that the next find will not be the same area.
One of the more interesting aspects of the Saddle Ridge Hoard story is the speculation of where the coins came from and why were they buried in that location. The most entertaining was the story that these coins were stolen in 1901 from the U.S. Mint in San Francisco. Even though it sounds plausible, the details of what would have happened based on historical record does not support this theory.
The old San Francisco Mint building built in 1874
Based on the response of David McCarthy, senior numismatist for Kagin’s, the firm working with the family, the two factors that debunks the theory that the coins were stolen from the Mint is that the coins in the hoard were mixed dates with the latest being six years prior to the theft and many of them were circulated. If they were stolen from the Mint, they would be all uncirculated, one date, and all with S-mintmarks.
Also, the U.S. Mint is not a bank. It does not save inventory. Records† show that over the years, the U.S. Mint loathes keeping inventory for long periods of time. These sources report a revolving inventory suggesting that only the 1933 Double Eagles may have been kept in the vaults longer than other coins while the policies about gold coins were being settled.
Anticipating the question about the GSA Hoard of silver dollars, those coins were not stored by the U.S. Mint. Those dollars were delivered to the Department of the Treasury to use as backing for silver certificates. The storage areas where the coins were found were either facilities used or leased by Treasury. Coins that were melted under the Pittman Act for sale to the British to help them fund their defense in World War I were coins held by the Treasury. Coins struck to replace the melted coins were then stored in Treasury facilities.
When the General Services Administration (GSA) worked to consolidate and reduce office space in the 1960s, millions of mostly Morgan dollars struck in Carson City were found in several buildings including in storage areas off the historic cash room in the Treasury Building in Washington, D.C. Coins were sold the public by sealed bid over five auction sales between 1972 and 1974 with one final sale in 1980.
Up until 1964, anyone could trade a silver certificate for silver coin at par (e.g., $1 silver certificate for one silver dollar). This ended when silver rose in price making the price of silver more expensive than par value.
One of the 1,427 “Saddle Ridge Hoard” buried treasure gold coins certified by PCGS
Even though the Treasury issued gold certificates, the gold backing were stored in limited vaults—and eventually Fort Knox. While there was some trading of gold certificates for gold coin, which is where the problems of the 1930s came from, gold was handled differently. The U.S. Mint had a cash operation where they would trade gold for coin (after it was assayed) and gold certificates for coins. This type of trade could also be accomplished at assay offices. But banks of the time were not required to make the trade. While many did as a service, with a service fee of course, there is no record of the government hoarding gold coins in the way silver dollars were hoarded.
Saying that the Saddle Ridge coins were once stolen from the Mint makes for a good headline. Good headlines makes for page views and page views translates into more advertising dollars for those blindly reproducing the erroneous story without checking the facts. Unfortunately, the truth cannot be explained on a bumper sticker or in a sensational headline—but that does not mean I will not try!
See the Saddle Ridge Hoard at Whitman Baltimore
It is being reported that Don Kagin will bring many of the coins in the Saddle Ridge Hoard to the Whitman Expo that will be held March 27-30, 2014 at the Baltimore Convention Center. If you need an excuse to come to Baltimore aside from attending the largest coin and currency show that is not run by the American Numismatic Association, coming to see the Saddle Ridge Hoard before it is broken up and sold later this year.
† A good reference for U.S. Mint statistics is a government-produced publication named Domestic and Foreign Coins Manufactured by the Mints of the United States: 1792-1965. It has been scanned several times and can be found on one of the many archive sites. The problem is that I found only one good scan, and it is not the best, but forgot where I downloaded it from. Printed copies are even more difficult to find.
Credits
Image of the can of gold coins from the Saddle Ridge Hoard courtesy of Kagin’s.
Image of the old San Francisco Mint courtesy of Wikipedia.
Image of the graded eagle courtesy of Professional Coin Grading Service.
The production and circulation of currency in the United States have been largely unchanged for decades, despite the growth in electronic financial transactions. Treasury is undertaking a comprehensive review of U.S. currency, including a review of both the production and use of coins, in order to efficiently promote commerce in the 21st Century. These studies will analyze alternative metals, the United States Mint facilities, and consumer behavior and preferences, and will result in the development of alternative options for the penny and the nickel.
Some of this has been ongoing for the last few years. As part of the Coin Modernization, Oversight, and Continuity Act of 2010, (Public Law 111-302 [PDF]), the U.S. Mint performed and Alternatives Metals study that was completed in August 2012 and then reported to Congress in December 2012.
The problem with the study is the politics written into the law which the report addresses in the executive summary. Key to the problem is the provision written into the law that gives too much consideration to the vending and coin-operated industry. Rather than find the best metals possible while considering the factors that would have to be changed to make new coins work in devices like vending machines, parking meters, and other machines that take coins for payment, the law is written as if the vending industry has veto power over the choices.
Reading the alternative metals report is like taking a college course in metallurgy. When reading the report, it is apparent that there is no perfect solution. Either the coin sizes and weights will have to change in order to meet electromagnetic signature (EMS) requirements to make new coins similar enough to provoke fewer changes to existing equipment or the EMS of the coins will have to change and the machines reprogrammed. In either case, something will have to change.
In short, the EMS is the waveforms that are sensed when a coin is exposed to low frequency radiation (harmless to humans). The waveforms are read by sensors and compared with a programmed baseline to verify that you dropped a real coin into the machine and not a slug.
As part of the alternative metal study, the U.S. Mint is holding a stakeholders meeting. Interested members of businesses, industries, and agencies will meet with the U.S. Mint study group to share their perspectives on the impacts of alternative metal compositions on circulating coins. This meeting will be held Thursday, March 13, 2014, from 10:30 a.m. to 3:30 p.m. (EDT) at the U.S. Mint Headquarters located at 801 Ninth Street NW, Washington, D.C., 2nd floor. Attendance is by invitation only. Anyone interested in attending can contact Leslie Schwager, Office of Coin Studies at OfficeofCoinStudies@usmint.treas.gov, or by calling 202–354–6600 no later than Monday, March 10, 2014 to request an invitation and obtain additional meeting information.
You can read the full announcement about this meeting in the Federal Register 79 F.R. 6672. [PDF]
Because of the recent storms and closing of the federal government, my work requirements have shifted making it difficult for me to attend. Anyone who will attend this meeting is invited to contact me. I would be interested in hearing all perspectives about the meeting.
Given the political nature of both the budget process and the law behind the alternative metals study, it is reasonable to believe that nothing will be accomplished by the president’s budget recommendation or the meeting at the U.S. Mint. In fact, since congress has to approve any changes to U.S. coinage and that this congress has been the least productive in history, do not expect change in your pocket change any time soon.
Last week, when the U.S. Mint announced a meeting of the Citizens Coinage Advisory Committee will be held on February 11, they included an agenda item mentioning a discussion regarding a 24-karat gold Kennedy half-dollar special product for 2014.
No further information is available from the U.S. Mint prior to the CCAC meeting.
Shortly after Kennedy’s, U.S. Mint Director Eva Adams and Chief Engraver Gilroy Roberts reported that there was discussions about putting Kennedy’s portrait on a silver coin. Since Jacqueline Kennedy did not want to replace Washington’s portrait on the quarter, it was decided to use the half-dollar. Roberts used models from the inaugural medal for the obverse design and Assistant Engraver Frank Gasparro prepared the reverse design using the Presidential Seal.
Since the law stated that coinage design could not be changed more often than 25 years, and that the Franklin Half was only 15 years old, it required Congress to authorize the change. The Act of December 30, 1963 allowed the design to be changed.
When the coin was released in 1964, the 90-percent silver coin was saved by a grieving nation wanting something that represented the fallen President. Over 273 million coins were struck in Philadelphia and 156 million in Denver.
This year, the Kennedy half-dollar will celebrate its 50th anniversary. It appears that as part of that anniversary, the U.S. Mint will use the authorization it has to strike 24-karat gold Buffalo coins and use it to create a Kennedy half-dollar tribute.
Today’s poll asks if you like the idea of a gold tribute coin and whether you would buy one?
What do you think about the idea that the U.S. Mint will produce a 24-karat gold tribute to the 50th anniversary of the Kennedy half-dollar?
I like the idea and will buy at least one of the coins. (40%, 28 Votes)
I like the idea but gold is too expensive for me. (24%, 17 Votes)
Why don't they strike a silver half-dollar like the silver coin that came out in 1964? (21%, 15 Votes)
i do not like the idea (7%, 5 Votes)
Where's the reverse proof? I want a reverse proof! (6%, 4 Votes)
It doesn't matter what the U.S. Mint does. I don't buy any of their products! (1%, 1 Votes)
H.R. 3729: Korean Immigration Commemorative Coin Act
Sponsor: Rep. Robert “Rob” Andrews (D-NJ)
• To require the Secretary of the Treasury to mint coins in commemoration of the 100th anniversary of the beginning of Korean immigration into the United States.
• Introduced: December 12, 2013
• Referred to the House Committee on Financial Services
The National Baseball Hall of Fame Commemorative Coin Act (Public Law 112-152 [PDF]) celebrates the 75th Anniversary of the National Baseball Hall of Fame in Cooperstown, New York. The three-coin commemorative program consisting of a $5 gold coin (50,000 maximum mintage), $1 silver coin (400,000 maximum), and a clad half-dollar (750,000 maximum) struck as uncirculated coins or as proofs.
The bill required an open competition for a common obverse design “emblematic of the game of baseball.” During the government shutdown this past October, the U.S. Mint posted the announcement on their website that the winning design was submitted by Cassie McFarland of San Luis Obispo, California.
McFarland told reporters that she stumbled upon the competition while researching coins for another art project. McFarland found the U.S. Mint’s call for design two days before the deadline and submitted a drawing. Her drawing was based on an old baseball glove belonging to a relative.
Cassie McFarland
For submitting the winning design, McFarland received a $5,000 prize.
U.S. Mint Sculptor-Engraver Don Everhart will do the engraving of McFarland’s winning design. Everhart created the reverse design.
Surcharges will be $35 per gold coin, $10 per silver coin, and $5 for the clad half-dollar to be paid to the National Baseball Hall of Fame for their continuing operations. If all the coins sell out, the Hall of Fame will receive $9.5 million for ongoing operations.
Given that the selection of Coin of the Year tends to favor gimmicks (to explained in a future post), it would not be surprising that this coin wins COTY when it is considered at the end of 2015.
In the mean time, it will be interesting to see this coin in hand as this is the #1 numismatic-related story as selected by the board of the Coin Collectors Blog!
The collecting public has been enamored with the American Silver Eagle reverse proof. By making the fields look matte and the effigy of Adolph A. Weinman’s Walking Liberty design in a stunning mirror finish, the coin has become a favorite with collectors. Prior to this year, the U.S. Mint produced the American Silver Eagle for the 2006 20th Anniversary Silver Eagle set, 2011 25th Anniversary Silver Eagle set, and the 2012 75th Anniversary of the San Francisco Mint set.
This year, the reverse proof was included in the “2013 American Eagle West Point Two-Coin Set.” The coins were struck as the U.S. Mint branch facility in West Point, New York. The coins feature the “W” mintmark.
Included with the reverse proof coins was a coin that the U.S. Mint called “enhanced uncirculated.” While it looks like a proof coin, the enhanced portion are the selective frosting of elements. Introduced earlier this year, the new laser frosting technique allows the U.S. Mint to selectively apply the frosting texture to areas of the dies in a matter that leaves fine details of the coins. For the enhanced American Silver Eagles, the selective frosting leaves the folds of Miss Liberty’s skirt mirrored and is used to show off the flag she is holding. Weinman’s Walking Liberty image is one of the best designs every to appear on a U.S. coin. Enhancing it in this manner just makes it pop in a way Weinman could never imagine.
2013-W American Silver Eagle reverse proof
2013 American Eagle West Point Two-Coin Silver Set with reverse proof and enhanced uncirculated coins.
2013-W American Silver Eagle enhanced uncirculated coin
In a recent conversation with Acting Mint Director Richard Peterson, he said that the U.S. Mint’s most successful coin launch in recent history was the American Buffalo reverse proof coin. The coin was first offered for sale at the World’s Fair of Money this past August, the U.S. Mint did not have enough inventory in order to meet the demand.
2013-W American Buffalo gold reverse proof obverse
Reverse of the 2013-W American Buffalo gold reverse proof
1913 Buffalo Nickel Type 1 Reverse
The 24 karat gold coin that was first issued in 2006 featuring the 1913 Type 1 Buffalo Nickel, was issued to celebrate the 100th anniversary of the design by James Earle Fraser. Fraser, who had a reputation as being a finicky artist, would likely be happy to see his Type 1 Buffalo nickel design as a gold reverse proof coin. Black Diamond never looked so good!
Although it has not been announced, Peterson suggested that the Kennedy half dollar may see an enhancement. Since 2014 will be the 50th anniversary of the Kennedy Half Dollar, expect the U.S. Mint to do something for this anniversary. It would not be a surprise to see a set with reverse proof and enhanced uncirculated coins.
Using the enhanced uncirculated treatment, if a 2014-S coin paid tribute to the Bicentennial reverse, can you imagine how good that would look?
Two discussions that transcended numismatics is what to do about the one dollar coin and common one-cent coin. Both coins cause different problems depending on who is doing the arguing. I find it amazing that the logic that is used to support the argument is not used consistently.
Dollar coins have been around since the beginning of the republic. In fact, the coin that currently holds the record for being the most expensive coin sold at auction is a 1794 Flowing Hair dollar. The coin is reported to be amongst the first dollar coins minted at the newly created Mint was bought by Legend Numismatics for more than $10 million. Laura Sperber, one of the principals of Legend Numismatics, was quoted as saying that she was prepared to bid higher for the coin.
If that is not enough to show how important the dollar coin has been in our history, there is always the 1804 Bust dollar, also known as “The King of Coins.” The U.S. Mint ceased to strike dollar coins in 1804 because of hoarding when the price of silver rose. The dollars that were struck in 1804 were struck using dies dated 1803 and are indistinguishable from the coins struck in 1803. The U.S. Mint continued to strike “minor coinage” to encourage circulation.
In 1834, eight dollar coins were struck with the 1804 date to include in a special set created as a gift for the King of Siam (the area known today as Thailand). One coin was included in the set, one was retained by the U.S. Mint for its collection that is now part of the National Numismatic Collection at the Smithsonian National Museum of American History, and the six others were kept as souvenirs by Mint officials and eventually landed in private collections. Between 1858 and 1860 seven more specimens were surreptitiously by U.S. Mint employee Theodore Eckfelt. It is alleged that Eckfelt created 15 coins. Six are in private collection, one is now part of the National Numismatic Collection and the others were reported to be destroyed when seized by the government.
The Coinage Act of 1873, known as “The Crime of ’73,” ended the free coining of silver and put the United States strictly on the gold standard until the western states where silver was being mined became upset. Two weeks later, congress passed the Bland-Allison Act to required the Department of the Treasury to buy the excess silver and use it to strike the Morgan Dollar. Morgan dollars, especially those struck at the branch mint in Carson City, Nevada are popular with collectors because of their ties to the days of the old west. Collectors can find quite a few nice examples of Morgan and the Peace dollars that were struck from 1921 through 1938 because many did not circulate. These coins were held as backing to silver certificates in circulation and did not get released to the general public until the GSA Hoard sales that begin in the 1960s.
Such a colorful history also has a downside that is used as fodder against the dollar. After ending the production of the Peace dollar in 1938, no dollars were struck until 1964 when the U.S. Mint struck 316,076 1964-D Peace dollars in May 1965. The coins were never put into circulation and the entire population of 1964-D Peace dollar were allegedly destroyed. There have been reports that some Peace dollars were struck using base metals (copper-nickel clad) as experimental pieces in 1970 in anticipation of the approval of the Eisenhower dollar. The same reports also presume these coins have been destroyed.
The Eisenhower dollar was not well received because of its size. The 38mm coin was seen as too big for modern commerce and with the exception of dollars struck with the special bicentennial reverse in 1975 and 1976, most coins did not circulate.
The Susan B. Anthony dollar coin was introduced in 1979 with much fanfare for being the first coin to honor a woman. The coin was a failure because it was confused with a quarter
To try to improve circulation someone came up with the idea of the small dollar as part of an attempt to honor suffragette Susan B. Anthony. The copper-nickel coin was very close in size to the Washington quarter, had reeded edges like the Washington quarter, and on a simple glance was consistently confused with the Washington quarter. I even have heard coin collectors use the fiasco of the Susie B.’s as a reason not to pursue the dollar coin.
Since the introduction of the Sacagawea dollar in 2000, the dollar coin’s size has remained the same but with the addition of manganese has a golden color to be visually different from other coins. For the visually impaired, the reeding was removed from the edges. Today, the Presidential $1 coins and the Native American $1 Coins have edge lettering that keeps it tactically different from the quarter dollar. However, people continue to bring up the Susan B. Anthony dollar as a reason not to use dollar coins.
Historically, dollar coins has been more popular in the western regions of the United States where the east prefers paper. Financial centers and big city government prefers paper for its alleged ease of handling. When circulated side-by-side, the public tends to choose paper over coin.
When we look around the world for examples of how to handle this situation, we find that the United States is the only country where the unit currency is available in both paper and coin. Other countries did not give people a choice. Rather, their governments made a decision based on overall economic benefits of using a coin with a predicted 30-year lifespan over paper currency that can last 18-24 months in circulation. Instead of the argument being of practical economics where every other country and the European Union have put on their proverbial long pants and made a decision that is in their best economic interest, factions in the United States comes up with mind boggling arguments of alleging that taking the paper dollar away is akin to taking away our freedom.
Obverse of the 2013-S Lincoln proof cent. Lincoln’s portrait, designed by Victor D. Brenner in 1909, is the longest running design of any United States coin.
Then why is that not an argument that can be used to figure out what the do about the one cent coin? Are we not giving up the same freedoms by forcing those who pay for good and services using cash to sacrifice their ability to pay what is due and not over pay?
The United States has a history of using its currency to boost the economic status of its citizens, aside from the various silver laws and the laws that eventually took the United States off the gold and silver standards, the creation of the half-cent was made because of the economic status of its citizens. Following Alexander Hamilton’s Treasury Secretrary’s report to congress “On the Establishment of a Mint,” Secretary of State Thomas Jefferson had another idea. Jefferson thought it would be better to tie subsidiary coins tied to the actual usage of the 8 reales coin. At the time, rather than worry about subsidiary coinage, people would cut the coin into pieces. A milled dollar cut in half was a half-dollar. That half-dollar cut in half was a quarter-dollar and the quarter-dollar cut in half was called a bit.
The bit was the basic unit of commerce since prices were based on the bit. Of course this was not a perfect solution. It was difficult to cut the quarter-dollars in half with great consistency which created problems when the bit was too small, called a short bit. Sometimes, short bits were supplemented with English pennies that were allowed to circulate in the colonies.
As an aside, this is where the nickname “two bits” for a quarter came from.
Jefferson felt that in order to convert the people from bit economy to a decimal economy, the half-cent was necessary to have 12½ cents be used instead of a bit without causing problems during conversion from allowing foreign currency to circulate as legal tender until the new Mint can produce enough coinage for commerce.
The half-cent would come into focus in the 1850s when the cost to produce the United State’s copper coins was nearly double their face value. In 1856, the Mint produced the first of the small cents, the Flying Eagle small cent, and produced 700 samples to convince congress to change to the small cent. As part of the discussion was the elimination of foreign currency from circulation making the U.S. Mint the sole supplier of coins.
There is no record of outcry from the public on the elimination of the half-cent. Its elimination came four years after the Coinage Act of 1853 that created the one-dollar and double eagle gold coins in response to the discovery of gold in North Carolina, Georgia, and California. The gold rush caused a prosperity and inflation that not only made the half-cent irrelevant but not something on the public’s mint. In that light, the Mint and congress felt that it just outlived its usefulness and would not be necessary with the elimination of foreign currency from circulation.
More controversy was generated in 1857 over the demonetizing foreign coins in the United States than the elimination of the half-cent. While the half-cent continued to circulate, it was estimated that one-third of the coins being circulated were foreign, primarily reales from Mexico. Redemption programs did not go smoothly, but in the end foreign coins were taken out of the market and the American people adapted and it could be said we prospered as a nation.
Like the 1850s, the last seven years have found that the cost of the copper used to make the one-cent coin has increased to more than the coin’s value. Combined with the labor and manufacturing costs, it costs the U.S. Mint between 1.6 and 1.8 cents for each copper-coated zinc cent struck. Although people argue that the cent is not needed and is barely useful, the U.S. Mint reports that 65-percent of its production are for one-cent coins that are ordered by the Federal Reserve to be circulated in commerce.
Eliminating the cent has caused controversy from those concerned with the economic welfare of the less fortunate. Many are using the same arguments that Jefferson made in 1791 to create the half-cent in order to keep the one-cent coin in circulation while others point to what other countries are doing. Canada is currently the country with the largest economy to eliminate its lowest denomination coin. Proponents of eliminating the cent point to Canada’s rocky success (withdrawal of the cent had been delayed twice) as an example of how the United States can handle the situation.
Canadian 1-dollar and 2-dollar coins. The 1-dollar coin is called a Loonie because its reverse depicts a common loon. “Toonie” is a play on the Loonie nickname.
Canada also does not circulate paper currency smaller than their 5-dollar banknote. Rather than paper (or polymer as they are converting away from rag-bond paper), Canada circulates a one-dollar (Loonie) and two-dollar (Toonie) that is regularly used in commerce. The Bank of Canada is also considering eliminating their 5-dollar note in favor of a 5-dollar coin that would be produced by the Royal Canadian Mint for circulation.
Suggesting that if the United States follows Canada’s lead in the elimination of the cent, should the United States follow Canada’s lead and eliminate the one- and two-dollar Federal Reserve Notes in favor of one- and two-dollar coins?
This debate will continue until someone decides to act like an adult and make a definitive policy decision—especially when the Fed publishes a “working paper” that cherry picks facts to support a specific viewpoint.
Image of the Susan B. Anthony dollar and Lincoln cent courtesy of the U.S. Mint.
Image of the Canadian Loonie and Toonie courtesy of Noticias Montreal.
Amongst all of the noise on Capitol Hill, the one area where no noise has been made is in the numismatic arena. For the last three months there has been no bill introduced, heard in committee, or acted on by either chamber of congress. Although there have been some hearings on a few issues, the last numismatic-related bill that had any congressional action was the introduction of the Pro Football Hall of Fame Commemorative Coin Act, S. 1842, introduced by Sen. Rob Portman (R-OH) in December.
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