Weekly World Numismatic News for July 31, 2022
One of the issues that prevented me from writing a more substantive post is that I am investigating an alleged California-based site that is scamming people via Facebook. When I warned Facebook users it was a scam, the site owner sent a private message telling me I was a bad boy before turning off all means to comment or return messages.
Whoever is behind this site is trying to sell American Silver Eagles for below spot. The prices for these fakes have dropped to $14 as the price is silver is falling.
Please don’t fall for these scams. Tell your friends and relatives not to buy from them. It will not end well for anyone.
And now the news…
A Piece of Numismatic History Can Be Yours
That curiosity in history had me searching for the auction of a significant piece of numismatic history. An article appeared at Coin Week reporting that a sample PCGS Type 1 holder with a handwritten label was up for auction at Great Collections.
According to the auction description, it is a prototype holder for a very worn Peace dollar to show how a coin with a worn date could be certified by PCGS. The handwritten label was produced in 1989 or 1990, with PCGS confirming the label’s authenticity.
The label is a demonstration of the growing pains experienced by PCGS. By 1989, PCGS was three years old and experienced an exception to its established procedures. Long before low-ball collecting, what does a company do with a low-grade coin?
The prototype holder with a coin that would likely grade PO-1 today is an artifact of numismatic history. Aside from its historical significance, it is just a cool item. The price as this is being written is $5,050. The auction ends Sunday, June 19, 2022, at 06:38 PM Pacific Time. Get your bids in!
Weekly World Numismatic News for June 5, 2022
The college-age child of a friend accepted a summer job in London and went early to witness the Queen’s Platinum Jubilee. Earlier today, I joined my friend on a video talk with the group of U.S. students staying in a London hotel.
During the discussion about the atmosphere around the streets of London, I asked about coins and medals that they encountered. All of the students found a 50 pence coin issued by the Royal Mint, and almost every shop and street vendor carried the coin they included in making change.
Other souvenirs the group collected are aluminum tokens with images commemorating the jubilee. The tokens were reminiscent of Mardi Gras tokens. Some found tokens that were the size of the old large penny with images of the Queen at various ages.
A few found currency-looking commemoratives, and they were designed as £70 notes with images of the Queen. The reverse has the name and address of a London business using the notes as an advertising opportunity.
The jubilee celebration is over, but the collectibles will live on.
And now the news…
Weekly World Numismatic News for May 29, 2022
Memorial Day took on national significance following World War I when the nation began to recognize all those who gave the ultimate sacrifice during all conflicts. By the end of World War II, most of the celebrations were renamed to Memorial Day. Memorial Day did not become an official holiday until 1967 with the passage of the Uniform Holidays Act (sometimes referred to as the Monday Holiday Bill). The law set Memorial Day to the last Monday in May, changing it from the traditional May 30.
The modern Memorial Day is a holiday celebrating the lives of those sacrificed in defense of the United States and its ideals at home and abroad. We honor the memories of those who paid the ultimate sacrifice so that we can collect what we like. They have gifted us the freedom so that I can write this blog and you can read and share it with others.
And now the news…
What about eliminating the $1 Federal Reserve Note
For most of the 21st century, many groups have advocated for eliminating the $1 bill, while others provide a counterpoint to maintain the status quo. While the discussion of eliminating the note has economic and policy concerns that lawmakers must address, how would the U.S. government implement the policy?
The Federal Reserve Act of 1918 gives the Federal Reserve the authority to procure, distribute, and manage the nation’s currency supply. They must procure the paper money from the Treasury Department, but the Federal Reserve is required to tell Treasury how much money they need to print. But does the Fed determine which notes to print?
The law (12 U.S. Code § 418) says that the Treasury Department prints notes in “the denominations of $1, $2, $5, $10, $20, $50, $100, $500, $1,000, $5,000, $10,000 as may be required to supply the Federal Reserve banks.” The statement suggests that the Federal Reserve banks set the printing requirements. Does this mean that the Federal Reserve banks can tell Treasury that it no longer requires them to print the $1 note?
Neither entity can make this decision alone. On July 14, 1969, history teaches us that the Treasury Department and the Federal Reserve announced they would discontinue issuing $500 and higher notes “immediately due to lack of use.” Even though the Bureau of Engraving and Printing last printed these notes in 1945, the Nixon Administration felt that removing them from circulation would help reduce crime. The Federal Reserve withdrew the notes as customers deposited them in banks.Although the denominations remain part of the law, the Federal Reserve Act gives the Federal Reserve latitude to manage the currency supply as it deems necessary. It was a policy enacted by the Treasury and Federal Reserve in tandem.
The agreement was not as easy as the history books want us to believe. In 1969, William McChesney “Bill” Martin was the Federal Reserve Chair. Martin was appointed by Harry S. Truman in 1951, fiercely guarded the Federal Reserve’s independence, and was known to push back against presidential policies with a minimalist approach to managing market factors. In the 1960s, Martin ran afoul of Lyndon Johnson and Richard Nixon for not doing more to help prevent a recession.
Following a meeting with Nixon in October 1969 about what his administration saw as an impending recession, Nixon announced that he would replace Martin when the Federal Reserve chair’s term expired on January 31, 1970.
It was not the first time the Federal Reserve changed United State currency without legislation. Since the formation of the Federal Reserve, the Federal Reserve authorized the printing of gold certificates, silver certificates, Legal Tender notes, Federal Reserve Banknotes, and the ongoing Federal Reserve Notes.
Before the formation of the Federal Reserve, the Treasury Department determined what currency to print and its design. Treasury Secretary Franklin MacVeagh proposed reducing the size of the currency paper in 1909. After years of study and discussion, Secretary Andrew Mellon approved new smaller designs issued in 1929. The change did not require new legislation.
Based on history, Treasury Secretary Janet Yellen and Chairman of the Federal Reserve Jerome Powell can decide to withdraw the $1 Federal Reserve Note from circulation. Powell can instruct the Federal Reserve Banks to stop issuing $1 bills and use the $1 coin instead. When the notes return to the Federal Reserve System, they can withdraw the notes and destroy them as they do with old currency.
Yellen can refuse by saying that she is following her boss’s policies, the President of the United States. But the Federal Reserve is an independent agency and does not have to ask for permission. By law, if the Federal Reserve does not order the printing of new $1 bills, the Bureau of Engraving and Printing will not print new currency.
Politics may prevent Yellen and Powell from making this decision, but they can do it and allow the United States to join the rest of the civilized world that no longer carries its unit currency in paper form.
Could the $100 Bill Go Away?
Would ending the circulation of the $100 Federal Reserve Note force the Russian people to pressure Putin over his Ukraine attack?
According to an opinion piece published in the Wall Street Journal by Markos Kounalakis (sorry, it’s behind a paywall), the sanctions on Russia are not reaching their people. Kounalakis believes that the United States should stop circulating the $100 bill to reach the people.
The United States dollar is the world’s reserve currency, and it is used as a safe store of wealth by people and companies. The Euro may represent an easily transactional currency, but the dollar is where the world turns for a store of wealth. In Russia, where the banks are not trusted, average citizens keep their savings in dollars.
According to the Federal Reserve, more than 661,500 pounds of $100 bills are in Russia as of 2019. Russians are stuffing them in a mattress and not using them for commerce.
Removing large-denomination currency from circulation is not new. In 1969, the Treasury withdrew the $500 and $1000 notes from circulation to make it more challenging for drug traffickers to move large amounts of cash.
In 2016, some economists made a case to stop circulating the $100 bill and the €500 banknote, even claiming the €500 note was nicknamed the “Bin Laden.” Eventually, the European Central Bank (ECB) stopped circulating the €500 banknote in 2018. But that has not stopped their use by criminals since the ECB has not demonetized the notes.
Even if the United States wanted to stop the circulation of $100 notes in Russia, it would not be an easy process. First, who would have the authority to make this determination? According to the Federal Reserve Act of 1918, it is the Federal Reserve’s job to manage circulating currency independently. The law that created the Office of the Comptroller of the Currency (OCC) allows this Treasury bureau to oversee the mechanisms that go into currency movement.
The government has more latitude over managing currency than coins. The law requires the U.S. Mint to strike cents, 5-cents, dimes, quarter dollars, half-dollars, and dollar coins (31 U.S. Code § 5111). On the other hand, the law (12 U.S. Code § 418) sets the denomination types, but it does not require the Federal Reserve to circulate all denominations.
If the President decides that it is in the best interest of U.S. foreign policy to stop the circulation of $100 notes, the Federal Reserve must decide if it is in the best interest of the Federal Reserve System to do so. However, the law complicates the matter by having the OCC oversee the institutions managing the currency. The blurry line between the authority of the Treasury Department and the independence of the Federal Reserve could create tension.
Should the policy regarding issuing $100 Federal Reserve Notes change, currency collectors may find opportunities to collect $100 notes.