Could the recent cyber attacks and growing severity of cybersecurity issues become the motivation for Congress to vote to reform United States currency?
According to Philip Diehl and Edmund Moy, former Directors of the U.S. Mint, the discussion as to remove the cent and paper dollar from circulation should be part of the current budget and tax overhaul debates.
Philip N. Diehl 35th Director of the U.S. Mint June 1994 — March 2000
Edmund C. Moy 38th Director of the U.S. Mint September 2006 — January 2011
The discussion is the same as it has been. The cost of zinc has risen causing the manufacturing costs of the Lincoln cent to climb above its face value. Even with operating efficiencies that have brought down the cost of manufacturing to its lowest levels in many years, the price of zinc keeps makes the materials cost more than the coin is worth.
As for the paper dollar, the Government Accountability Office has published several reports over the years that demonstrate the cost savings between using the paper dollar versus a coin dollar. The last GAO report (GAO-13-164T) concluded that using a dollar coin instead of the paper note “could potentially provide $4.4 billion in net benefits to the federal government over 30 years.”
This is not a new discussion. The only change is that this is being suggested by former Directors of the U.S. Mint from both sides of the aisle. Diehl was appointed by Bill Clinton and served from June 1994 through March 2000. Moy was appointed by George W. Bush and served from September 2006 through January 2011.
Earlier this year, Sen. John McCain (R-AZ) introduced the Currency Optimization, Innovation, and National Savings Act of 2017 (COINS Act) (S. 759). McCain’s bill would require:
Suspending the production of the one-cent coin for 10 years except for collectibles. After three years, the GAO would doe a study to determine whether production should remain suspended or should be reinstated. This would not demonetize the cent.
Change the composition of the nickel to 80-percent copper and 20-percent nickel. This should bring down the cost of materials used in striking the five-cent coin to be on par with its value. Efficiencies in manufacturing could lower costs further.
If the bill becomes law, two years after it is enacted, the Federal Reserve will begin removing $1 Federal Reserve Notes from circulation. This will probably be done by the banks who will take the notes on deposit and send them back to the Federal Reserve where they will be destroyed. Coins would take their place. The $1 FRN could still be produced for the collector market.
Sources report that the chances of McCain’s bill getting a hearing are minuscule. While having lunch with on congressional staffer, I was given three reasons why Congress will not address this issue:
States with a large rural population primarily west of the Mississippi River represented by Republicans are unlikely to support the removal of the one-cent coin. Removal of the coin is viewed as a hidden tax against the people with fear mongering that suggest the government is keeping the extra money that would become on the rounding of prices.
States with large poor populations, primarily in the south, and their advocates who believe that taking away the pennies are a way to separate more money from poor people who can least afford to lose the ability to pay in cents.
Surveys show that most of the people older than Millenials are against removing the paper dollar. Since this population constitutes the majority of the voters and donors, the politicians are not about to make those people upset.
Another issue is that McCain is not popular amongst his fellow Republicans. If the issue is addressed, it is likely to be discussed as part of a bill that does not bear McCain’s sponsorship.
Given the partisan nature of politics and the perceptions of the members of Congress, there is a very little chance of the Coins Act or any similar legislation being enacted during this session of Congress.
Fans of the NBC show The Blacklist that watched on Wednesday, October 4, would have noticed there was a numismatic role added to the script.
Raymond Reddington, played by James Spader, was trying to gain the attention of a high-rolling thief and found himself at a numismatic auction. The item up for bid was the 1943-D Bronze Lincoln cent. As part of the story, it was announced that it was the only one known to exist and that it was graded by the Professional Coin Grading Service.
Currently, there is only one known 1943-D Bronze Lincoln Cent and was graded by PCGS to be MS-64BN. It last sold for $1.7 million in 2010.
Since then, more 1943 Bronze Lincoln Cents were found including a 1943-S graded MS-62BN by PCGS. That coin was sold to Bill Simpson, a co-owner of the Texas Rangers, for $1 million in 2012. Simpson owns a complete set of 1943-PDS and 1944-PDS off-metal Lincoln cents, the latter made of zinc coated steel.
In the show, the hammer price was $3 million. All things considered, it is probably an accurate estimate of what the coin might be worth if it were to come to market today.
Of course, they did not use a real 1943-D Bronze Lincoln cent and there was a mistake when the coin showed up later in the story. But if you have not seen this episode, I am not going to spoil it for you!
1943 Lincoln cent struck on a copper planchet (Courtesy of CoinTrackers)
People seem to come out of the woodwork when there is the story about an error coin being worth a lot of money. Most have folders or albums left behind by long passed loved ones that they have stored in a draw for sentimental reasons. They do not have the passion of the relative for collecting, but they still have the folders.
Since the news reports about the discovery of two 1943 Lincoln wheat cents struck on copper planchets hit the news, I have received a few inquiries as to whether they have a coin that could be worth tens- or hundreds-of-thousands-of-dollars. All are disappointed when they find out that grandpa’s old album may not be worth more than $50.00 if that much.
“But the coin is so old!”
U.S. cents have been made of copper, steel, and copper plated zinc. What’s next?
Those of us who have been around this hobby for a while know that many factors go into pricing coins including supply and demand, condition, and other market forces. The considerations are so varied, that I wrote a two-part series on “How Coins are Priced” (links: Part I and Part II) that is still relevant.
The 1943 copper Lincoln cent is known as an off-metal error. It probably happened when the U.S. Mint started to strike the 1943 Steel cents and a few copper planchets were probably still stuck in the machine. According to Coin World, there have been 12 reported 1943 copper cents.
Now that the coin has been reported in the mainstream media, be careful about buying counterfeits coins. Sources report that would-be fraudsters are either taking the abundant supply of steel cents at a cost of 50-cents to $2 each and plating them with copper. This type of counterfeit is easy to detect using a magnet. Copper is not magnetic and will not react to a magnet.
Another trick they try is to alter the “8” on a 1948 Lincoln cent to make it look like a three. If you carefully study the style used on the “3” and the “8” you will see that they are very different shapes on the coins. Also, if you look at the date under magnification, you could see the tooling marks. This is where carrying a 10x loupe is beneficial.
Identifying a 1943 altered date
Otherwise, make sure the coin is encapsulated by a reputable grading service and that you check the serial numbers against the grading service’s database.
While it is nice to have the attention, please do not be disappointed when I tell you that the rusting 1943 steel cent is probably worth about 25-cents or that reprocessed set may be worth one- or two-dollars.
In the hunt for something interesting, I stumbled across two listings on eBay for a two error dies from the Denver Mint being sold by noted error expert Fred Weinberg. These Lincoln cent dies are not dies with errors but dies with part of the design still visible.
Dies from the U.S. Mint makes for an interesting collectible. Standing about 2½ inches tall and about 1¼ inches across the base where it is loaded into the coining press, it is really an unremarkable piece of metal. Weighing 192 grams (about 6.8 ounces), the only distinguishing marks on the die is the serial number stamped on the base.
Before being discarded, workers at the U.S. Mint are supposed to completely grind off the design so that it cannot be used to strike counterfeit coins. Even though it is not cost effective to flood the U.S. economy with counterfeit Lincoln cents, the U.S. Mint does not want to take the chance someone will try. Once the design is removed from the die it can become a collectible.
Close-up images of the dies make the visible design look more dramatic than in person. After all, the images were likely taken with a macro lens on a die used to strike a coin 19.05 mm (0.750 inches) in diameter. Even so, the idea was fascinating enough for me to submit bids high enough to win both dies.
The first “error” die was used to strike the obverse of 1993-D Lincoln cents. This die is not completely filed down since it does show some of Lincoln’s hair. Although not a large area, there is enough of the incuse portion of the die’s section to be able to identify it as hair and providing a good guess as to where it would be on the coin. The sticker in the image was placed there by the seller. I decided to leave the sticker.
View of the 1993-D Lincoln Cent obverse die
Serial number for the 1993-D Lincoln Cent obverse die shows the D for Denver, 3 for 1993, and followed by a sequence number
Close up of the 1993-D Lincoln cent die showing part of the hair design still visible.
The other error die was used to strike the reverse of 1994-D Lincoln cents. In this case, the “error” is very subtle. There are two lines that would have been where the bottom two steps of the Lincoln Memorial would have been. Based on the placement, these would be to the center-right of the Lincoln statue in the monument. In the image, it is at the bottom of the “R.” I do not know why the “CR” is written on the die but I am not removing it, for now.
View of the 1994-D Lincoln Cent reverse die
Serial number for the 1994-D Lincoln Cent reverse die shows the D for Denver, 4 for 1994, and followed by a sequence number
Close up of the 1994-D Lincoln cent reverse die showing a small section of the steps to the Lincoln Memorial still visible
I do not know how Fred Weinberg finds these items but they are fascinating. The next time you go to a show you should check out his inventory. He finds some really interesting errors that have to be seen to be believed.
Looking down on the Lincoln Cent “error” dies. The 1994-D reverse die is on the left, The 1993-D obverse die is on the right.
Yesterday, I wrote about sales of 2017-P Lincoln cents selling at nearly 20-times face value online. These are coins in production that the U.S. Mint will continue to strike until December 2017 at a pace that should yield over 5 billion coins.
At the end of the post, I wrote:
Maybe it is time for the American Numismatic Association and Professional Numismatic Guild to issue a statement warning the public. If these organizations are about protecting the collector, here is a clear case of price gouging that they should show concern!
2017-P Lincoln Cents are selling for high multiples over face value
Sometimes, I do not understand collectors and the speculation market.
I had read a few stories about the one-year-only 2017-P Lincoln cent selling for high multiples online. I had to check it out for myself. What I found are rolls of uncirculated Lincoln cent selling for upward of 20-times face value!
Since the U.S. Mint did not announce that they would be adding the “P” mintmark to the one-cent coin as a one year issue, there has been a frenzy of interest. It seems to the point of overpaying for a coin that is really not worth more than its face value!
These are business strike coins, struck for circulation. They are the coins ordered by the Federal Reserve to satisfy the nation’s commerce. Although they have a mintmark “P,” the U.S. Mint will strike billions of these coins. In 2016, the Philadelphia mint struck over 4 billion one cent coins—4,698,000,000 to be exact.
According to the U.S. Mint production figures, 515,200,000 of the 2017-P Lincoln Cents were struck. Extended out over 12 months, that means the U.S. Mint will strike over 6 BILLION of these coins.
One day of 2017-P pocket change finds
Before typing this blog post, I checked my pocket change to see how many I had. Since I empty the change from my pocket daily, I found five coins just from my daily travels on Saturday.
This is an unfortunate state of society. The collective ADD and instant satisfaction will have people spending more than they should only to be disappointed later when the coins are not worth more than face value. It will be like those who bought 50 State Quarters on the home shopping channels only to later realize they would be lucky if they could recover half of what they paid.
I understand that online sellers are trying to satisfy the market. Capitalism at its most greedy. But it is not good for the hobby.
1974-D Experimental Lincoln cent pattern made using an aluminum planchet (J2151)
Once again the U.S. Mint is saving us coin collectors from ourselves and preventing a legally obtained collectible from being owned by the collecting public. In a canned statement that had to have been copied from previous canned statements, U.S. Mint Principal Deputy Director Rhett Jeppson said that the agreement to return the only known version of a 1974-D Aluminum Lincoln cent pattern “is not only good for the integrity of the coin collecting hobby but for the integrity of the government property and rule of law.”
In 1974, as part of the effort to find a composition that would replace the 95-percent copper planchet for the one-cent coin that was used at the time, the U.S. Mint struck 1.4 million as patterns with the intent on destroying all of the coins struck when completed.
Congress did not like the concept fearing that their silver color would confuse them with other coins. Additionally, the aluminum composition could not be detected in vending machines nor would show up on an x-ray if swallowed. The coins were melted down.
Patterns that were struck for this test were made entirely in Philadelphia.
Which brings us to the story of the 1974-D cent pattern in this story.
Harry Lawrence who retired as deputy superintendent of the Denver Mint in 1979 owned this coin. Lawrence died in 1980. Harry’s son, Randall, discovered the coin in 2013 after moving to La Jolla from Denver and selling a bag of his father’s old coins to Michael McConnell at the La Jolla Coin Shop.
McConnell had the coin graded by Professional Coin Grading Service as MS-63 and determined it to be a genuine pattern. They were going to offer the coin for auction when the government stepped in to stop the sale and demanded its return.
Michael McConnell (left) and Randy Lawrence (right) returned the rare 1974-D penny made from aluminum back to the U.S. Treasury Department Thursday afternoon. — Nelvin C. Cepeda
There is one caveat to this story: there is no record of Denver ever striking such a coin. According to Randy Lawrence, the coin was given to his father when he retired from the Denver mint.
When Lawrence and McConnell sued the government to end the demand order, it is reported that Alan Goldman, former interim Mint director who headed the aluminum cent project, speculated in his deposition that the coin might have been made as part of a practical joke. Goldman allegedly named a suspect whose name was not released but is reported to be deceased.
The ensuing lawsuit lasted about two years and was settled today with McConnell returning the coin to the U.S. Mint on March 17, 2016.
The precedence this ruling is more dangerous for the hobby than people think. The most important issue is that it puts into jeopardy the status of the five 1913 Liberty Head nickels. Created under allegedly similar circumstances, the U.S. Mint has no record that these coins were ever produced. Although the government has tacitly agreed not to pursue that coin, there may be a time when someone with a more parochial view might use this situation to recover alleged chattel as property of the state.
Rulings like this will likely keep any surviving 1964-D Peace dollars hidden from the public. This will partially bury the history of turmoil in the coinage markets of the early 1960s. Hiding history is never good for anyone.
1974-D Aluminum cent courtesy of PCGS via Coin World.
Over the summer, a Harris Poll was conducted to understand how Americans feel about abolishing the one-cent coin and the paper dollar note. Even though there are pundits calling for these changes and even the end of physical currency, Harris found that those wanting to keep the lowly one-cent coin continue to hold the majority opinion.
Series 1935 $1 FRN Reverse Early Design
According to Harris, 51-percent of those polled oppose abolishing the minting and use of one-cent coins versus 29-percent in favor. In 2008, 56-percent were opposed and 24-percent were in favor. While some will see a small movement to being in favor of eliminating the one-cent coin, the change is not significant when considering that the last poll was seven years ago shortly before the height of the recession and the beginning of the bank failures.
Those of us who work in areas outside the larger commercial world has experience with a cash economy that is not tied to economic status. One of those is the numismatics industry. While many dealers will take credit cards, and will pass along the fees along to the customer, many dealers have said that most of their off-line business is a cash-based business. While larger purchases are done using checks, most will leave shows with more hard currency than other types of payments.
1909-VDB Lincoln Cent
Collectibles businesses are very reliant on cash. In my business, I do accept credit cards but when I do shows the overwhelming majority of my business is in cash. A few weeks ago I did a two day show and had one of my best weekends ever but only had one sale using a credit card.
There are people who are leery of using credit and debit cards for every transaction. We use cash to limit our exposure. In this connected world, the credit and debit card leaves a digital breadcrumb that is available to be hacked. I cannot tell you how many times I watched people in local convenience stores punch in their codes in a matter I could see them and then leave their receipts behind. This could be used to steal your money and your debit cards are not covered the same as credit cards. But the public does not see this.
A week does not go by without a report of the hacking of personal information that should not be made public. Unfortunately, it is getting to be like rain on the hot-tin roof, after a while the sound blends into the background.
According to the Federal Reserve, there was approximately $1.39 trillion in circulation as of September 30, 2015, of which $1.34 trillion was in Federal Reserve notes. That represents a lot of money that would have to be accounted for if we were to go into a cashless society. It would take a significant effort that would not make for good public policy.
The calls to make changes to change are beginning to drone on as background noise like rain on a hot-tin roof.
It has been a very interesting few weeks since my last post. During that time there was a lot of business activity that I hope will allow be to have more time to do some of the things I would rather be doing, like write. Aside from the blog, I have 95-percent of a collecting-related ebook completed and 80-percent of a different sort of book completed. In between business meetings, I was able to start a book I am tentatively calling “Why did the Mint do that?” which may include information about why the Bureau of Engraving and Printing does what it does including a section on the history of counterfeit detection in the United States.
In the mean time, I have started several posts in the same style that I have been writing for the last few years. Until I can make more time, some long-form tomes will have to wait. Instead of taking the time to write longer items, I will look to write shorter posts including in multiple parts, depending on the topic. This way, I can clear the list of ideas I have been saving.
One more bit of housekeeping before I talk about my new collection: you might see a page that says that I am working on an update. I decided that the blog needs a new look and that periodically, I will work on a theme change. Hopefully, I can finish by the end of the month, but you never know!
That being said, I also had taken the time to start a new collection. While I wanted to start something new for a while and had an idea for a direction, I did not have the opportunity until now.
Earlier this month I attended a local coin show in Westminster, Maryland. Westminster could be considered a distant suburb of Baltimore with a big firehall that housed this show. Although I was there to man the front table representing the Maryland State Numismatic Association as its president greeting people, I was able to slip inside to look around. One of the tables had binders with foreign coins and I started to look.
Grabbing the one for Canada, I remembered that the first official coinage of the Province of Canada. In 1840, the British Parliament passed the Act of Union that merged the upper and lower colonies of Canada into the single Province of Canada. As a province, Canada was able to form a more independent government, even though it was answerable to the Crown. Answering to political dissension that was building in the province, Queen Victoria named Ottawa as the province’s capital. Although the province government met in Ottawa anyway, this was a symbolic move.
One of the problems was the lack of circulating currency. Even though the monarchs loosened the rules on circulating coinage in Canada, there was a need for a larger supply. Even though the Province of Canada’s parliament passed legislation to adopt a decimal coinage, Queen Victoria finally recognized the request. As part of trying to maintain order in the province, Victoria ordered the Royal Mint to produce coinage for Canada starting in 1858.
Canadian large cents with the effigy of Queen Victoria are affectionately called Vickie Cents. With the recent elimination of the one cent coin, looking back at the Canadian cent through its history has become popular with Canadian coin collectors. The key date for Vickie Cents is the first year, 1858 coin.
At mid-grade the 1858 Vickie cent is not that expensive. Although they are harder to find, the demand keeps the price reasonable for the average collector. Although I have been thinking about starting a Vickie cent collection for a while but when I found one in this dealer’s binder, I could not resist!Based on the description in the Charlton Standard Catalog of Canadian Coins, the coin would be graded around F-12. But since it is the first year of issue and the general rule is to buy the best you can afford, this was how I was going to make my start with Vickie cents.
1858 Province of Canada Large Cent (Vickie Cent) obverse
1858 Province of Canada Large Cent (Vickie Cent) reverse
Since I was there I decided that even though it was not the first year of issue, I would pick up the last year of issue. Since Queen Victoria died in January 1901, that was the last year her image appeared on coins in the British Commonwealth. I picked out a nice extra fine example to mark the beginning and end of the series.
1901 Dominion of Canada Large Cent obverse (Last year of Victoria Cent)
1901 Dominion of Canada Large Cent reverse (Last year of Victoria Cent)
Vickie cents were produced in 1858 and 1859 with a few distinguished varieties. One notable variety is the 1858 coin-aligned reverse. At the time it was the Royal Mint’s practice to have coins aligned in what we call today “medal alignment” where the top of the obverse and reverse point in the same direction. An error at the mint created a rarer coin-aligned (tops on opposite ends) coin. In 1859 there were overstrikes, doubled numbers, alignment differences, and composition differences. If I were to look for all of the known varieties, the cost of the 1859 with a Narrow 9 made of brass (not bronze) would cost about as much as a 1914-D Lincoln cent and be much more difficult to find.
The cents of 1858-1859 were minted in enough quantity to keep the Canada stocked with cent until 1876. New portrait, and varieties, were introduced as well as a striking at the Birmingham Mint, also known as the Heaton Mint, along side the British halfpenny, which used the same planchet. Coins struck at the Heaton Mint were given the “H” mint mark.
Foreign coin collecting can be an adventure that may not be as expensive as their U.S. counterparts. If you are collecting for fun, as I am, pick a country, learn a little about the history, and pick a series to collect. I picked Canada because my wife’s family is from the Province of Québec. Not only will you find it a challenge, but the lower demand may make your endeavor more affordable.
Lithograph depicting Lincoln’s Assassination by Currier and Ives.
As Doctors Charles Leale, Charles Sabin Taft, Albert Taft, two soldiers who are anonymous to history, and William Hall carried the bleeding body of the president out of Ford’s Theatre, they saw Henry Safford in front of William Petersen’s boarding house waiving the crowd to bring them across to the street. It rained that evening as they brought Lincoln into the house and laid him diagonally on a bed in a first floor bedroom.
Joining the crowd in the room was Surgeon General of the United States Army Joseph K. Barnes, his assistant Charles Henry Crane, Lincoln’s personal physician Dr. Robert K. Stone, and Dr. Anderson Ruffin Abbott the first Black Canadian to be a licensed physician. With Barnes in charge, the examination and treatment proved beyond the capabilities of the medical arts of the time. By 7:22 AM on April 15, 1865, Abraham Lincoln, the 16th President of the United States of America had succumbed to his injuries.
While every president faces their shares of challenges, Abraham Lincoln was challenged with the morality of slavery and the breaking apart of the republic before it reached its 100th anniversary. He was so concerned about keeping the nation together that not only did he have Union troops shoot at what he considered fellow Americans, but he broke laws and violated the constitution in order to keep the country going.
Lincoln is remembered for his debates with Stephen Douglas, the Emancipation Proclamation, Gettysburg Address, his second inaugural address, the Civil War, the Homestead Act, three revenue-based (taxation) acts, and the National Banking Act that lead to the creation of the Bureau of Engraving and Printing. Aside from being the first president assassinated, there are other aspects of his presidency that is not widely discussed. Lincoln was known for either not enforcing laws he did not like or over enforcing laws to silence critics. While he did not condone a lot of the brutality especially from Generals Sherman and Grant, he did not condemn them either. Some historians suggest that his appointment of the young General George B. McClellan after the loss at the First Battle of Bull Run was to use him to manipulate the strategy to be more brutal against the Confederacy.
In a move that would have had any modern president excoriated, Lincoln ignored a writ of habeas corpus issued by Supreme Court Chief Justice Roger B. Taney. Lincoln became incensed with Taney after he authored the controversial Dred Scott v. Sanford decision that Lincoln highly disagreed with. Following the writ, Lincoln and his cabinet ignored Taney, a move that hurt him in many ways. Taney died miserable and poor after a long illness blaming Lincoln for his decline.
1909-VDB Lincoln Cent
Even with these blemishes on his record, Abraham Lincoln is the second-most celebrated and honored president. For his accomplishments, Theodore Roosevelt listened to immigrant artist Victor David Brenner to honor Lincoln on a coin. As part of Roosevelt’s “pet crime,” a portrait of Lincoln design by Brenner has appeared on the one-cent coin for 117 years. Lincoln has also appeared on the reverse of the 2013 Illinois state quarter, as part of the depiction of Mount Rushmore on the 2006 South Dakota quarter, and the 2010 Lincoln presidential dollar.
Obverse of the 2009 Abraham Lincoln Commemorative proof coin
Lincoln also appeared on the 1918 Illinois 100th anniversary of statehood commemorative half dollar, 1991 Mount Rushmore commemorative coin series, and the 2009 commemorative silver dollar honoring the 200th anniversary of his birth.
At one time there was a trivia question as to the only United States coin with a presidential portrait of a president on both sides of the coin: the Lincoln Memorial cent. If you look carefully in the memorial on the reverse, you can see the statue of Lincoln in the memorial making it the only coin of its time to have this distinction.
Aside from appearing on the current $5 Federal Reserve Note, Lincoln has appeared on notes of 10 different designs and denominations including the fourth issue 50-cents fractional note, $10 Demand Note, $500 Gold Certificate, and a $1 large size silver certificate.
Series 1882 $500 Gold Certificate
In honor of Lincoln, spend at least one of those little copper-coated zinc cents remembering that if it was not for him, that coin might not have existed.
Curier & Ives image courtesy of the Smithsonian Institute. Image of the 1909-VDB cent courtesy of USAcoinbook.com.Image of the 2009 Lincoln commemorative dollar courtesy of the U.S. Mint. Banknote image courtesy of AntiqueBanknotes.com.