It has been a while since I wrote about a new purchase, mainly because I have not made many new purchases. The few I have made were to fill a few holes in a Barber Quarters and Barber Halves collection that I am doing for fun. I have picked up a few error coins that were not exciting. But this is the first time in a few months that I made a purchase that really excites me.
A few years ago I sat at a table at one of the Whitman Expos in Baltimore when I came across a dealer who was selling later issues of Israeli currency for inexpensive prices. I had seen a few pieces that intrigued me so I purchased what I could. Not long after, I found two books about the currency issues from the Bank of Israel and I decided to try to collect a sample from every series including the first two issue from the Anglo-Palestinian Bank and Bank Leumi after the founding of the State of Israel.
Last year I learned that the Bank of Israel was holding a public competition for the design of new bank notes. These notes will replace the current Second New Sheqalim series that was first issued in 1999. As a collector, it meant trying to get samples from the current series.
Luckily for me, my nephew is going to school in Israel and since he was spending his Spring/Passover Break in the United States, I decided to take advantage of his presence in the Holy Land to visit local banks to find nice notes for his uncle. Since I already have a 20 New Sheqalim polymer note, I was interested in the 50, 100, and 200 NIS notes. At the prevailing exchange rate, the cost would be under $95 for the set.
After sending the check to my brother to deposit into my nephew’s U.S.-based bank account, he went out looking for clean notes. According to my nephew, that is where the fun begins. First, he is in a school that is basically in the middle of nowhere—somewhere between Jerusalem and Tel Aviv near a land area not suitable for building. But since he had been traveling to Jerusalem, he would check the banks there.
Apparently, collecting currency is not a popular hobby in Israel because when he went to the banks they questioned his motivation. The story of the strange looks and comments by Israeli tellers and other bank personnel says that either there are not many numismatists in Israel or that they find other ways to purchase their collection than from the banks. I was amused by my nephew’s stories. He was a real trooper and found three notes that he carried back the the United States for his uncle’s collection! He’s also doing well in school, which is very important!
All three notes are from the 5766/2006 (third) printing with updated signatures and in either crisp or almost uncirculated condition. All three have nice colors and really display well, including the security features which are difficult to image. All the text on the obverse is in Hebrew using numbers for the denomination for easy identification. The reverse also includes the denomination information in both English and Arabic making Israel one of the few countries to include three languages on its currency (India is another).
The three notes are signed by Stanley Fischer, the Governor of the Bank of Israel, and Chairman of the Advisory Council, Aharon Fogel. Because of a change in the law that abolished the Advisory Council, notes printed after 5770/2010 only have the signature of Governor Fischer.
The 50 NIS note features the portrait of Shmuel Yosef Agnon sitting in his study and personal library with a pen in his hand. The text is from his acceptance speech when he was award the Nobel Prize for Literature in 1966. The reverse is a picture of Agnon’s writing stand with his pen and reading glasses. Listed over the paper on the writing stand are the titles of sixteen books written by Agnon. That list is in Hebrew.
The 100 NIS note features the portrait of Izhak Ben-Zvi, the second President of Israel, with the interior of the wooden structure that served as the President’s residence. Also featured on the obverse is text from the speech Ben-Zvi gave to the first assembly of the Yemenite community that was held at his residence in 1953. The reverse is the image of the synagogue in the Galilee village of Peki’in along with the text from the speech from his second inauguration. To the right over the windows panes (seen in red) is microtext are the titles of nine books written by Ben-Zvi.
The 200 NIS note features the portrait of Zalman Shazar, Israel’s their President with the image of students in an elementary school class. The text is from Shazar’s address to the Knesset on June 13, 1949 after the Compulsory Education Law was passed. The reverse features a typical alley in the town of Safed, a spiritual center of Kabbalists. Text is an excerpt from Shazar’s essay, “Tzofayih Tzefat” (Thy Watchers, O Safed), first published in 1950. To the right of the text is microtext featuring the titles of fifteen of Zalman Shazar’s works.
These notes are beautiful and they tell parts of Israel’s history. Digital images cannot convey how the security features, color shifting ink, subtle changes in color tone are well integrated into the notes making them works of art. One of the more interesting fetters are the triangles that appear on both sides of the note. If you hold the note up to the light, the triangles are lined up to reveal the Star of David.
The United States tried to use currency as a means to teach the people something. The Educational Series of 1896 tried to use allegorical figures with various themes. But the controversy of using a bare breasted woman on the $5 note derailed the series. These are amongst the Top 100 notes identified in 100 Greatest American Currency Notes by David M. Sundman and Q. David Bowers. In fact, very few small-sized notes made the list—only special issues like the Hawaii overprint note made for World War II. Even though the Bureau of Engraving and Printing has dabbled in color, maybe they should learn from a country like Israel and come up with more historic and iconic designs.
Paper currency was first developed in China in the 7th century and later adapted by the Mongol Empire before spreading to Europe and then the United States. China developed currency because of a shortage or metals. Notes printed promised the holder that it be redeemed for something of value and can be traded as specie. The Mongolian Empire learned from the Chinese and issued currency that they backed by the assets of their conquests. Since both China and Mongolia issued state guaranteed currency, the paper was trusted in commerce and helped build a steady stream of commerce between Europe and the east.
Although Europe traded eastern currency as trade was opened between the regions, currency was not a part of regular trade until the 13th century. In Europe, individual banks issued currency as a promissory note against assets held by the bank. Essentially, these were promissory or demand notes that was supposed to allow the holder to trade the note for specie on demand. Unfortunately, the practice was abused to try to raise additional capital and caused a lot of banks to fail.
The problem was not limited to private banks or loan companies. Banks owned by the nation states also tried to use currency as an investment vehicle without sufficient funds to back their values. Currency manipulation by those banks lead to man bank failures and economic depression that are woven through some of the strife through Europe.
Switzerland, France, and England were the first counties to organize and regulate the banks and regulate how they issue currency. Each country has experienced bank failures of not only the state chartered banks but the state central bank making the issued paper currency worthless.
Currency did not see a wide acceptance until it was issued in the Massachusetts Bay Colony in the 17th century. It was the first time that currency was issued in predetermined amounts. Since the colonies did not have the ability to coin money, all colonies issued its own currency by the 18th century. These notes functioned as currency but actually were bills of credit, short-term public loans to the government. For the first time, the money had no intrinsic value but was valued at the rate issued by the government of the colony in payment of debt. Every time the colonial government would need money, they would authorize the printing of a specified quantity and denomination of notes that it would use to pay creditors. The emission laws also included a tax that would used to repay the bill of credit and the promised interest.
As taxes were paid using the paper currency, the paper was retired. As the notes were removed from circulation, that was less payments the government had to make. On the maturity date, people brought their notes to authorized agents who paid off the loan. Agents then turned the notes over to the colonial government to be reimbursed and collect a commission for acting as an agent.
Sometimes, colonies could not pay back the loan. In those cases, the colonies passed another emission law to cover the debt owed from the previous emission plus further operating expenses. In this case, mature notes were traded for new notes. The colonists accepted this system since there were shortages of coins as well as there being an inability to convert the value of foreign coins into colonial shillings by farmers and other unskilled in such matters.
During the revolutionary war, the Continental Congress began to issue paper money to support the war efforts. The colonies also continued to issue paper currency. While the colonial issued notes had some value, those issued by the Continental Congress was not as sure and the notes’ value plummeted. With the saying “Not Worth a Continental” becoming popular so did the term “shinplasters” to describe the notes lining colonialist’s boots to help keep their feet warm.
Counterfeiting was rampant by the mid-18th century. In order to combat the problem, Benjamin Franklin devised the nature print, an imprint of a leaf or other natural item with its unpredictable patterns, fine lines, and complex details made it more difficult to copy.
To create a nature print, Franklin placed a leaf on a damp cloth. The cloth was placed on top of a bed of soft plaster that pressed the leaf into the plaster. Once the plaster hardened, it had a negative impression of the leaf. Molten copper was then poured over the plaster to make the printing plate. Franklin first used nature prints for the 1737 New Jersey emission. He also used different leaves for different denominations and elaborately engraved borders to further thwart the efforts of potential counterfeiters.
Franklin partnered with David Hall printing notes for New Jersey and Pennsylvania colonies. Along with his nature print, Franklin also included the phrase “Tis Death to Counterfeit.” Aside from trying to scare away potential counterfeiters, the penalty for counterfeiting in the 18th century was death. No convictions for counterfeiting colonial currency or death sentences have been recorded.
Later, Hall partnered with William Sellers to print Pennsylvania currency when the Pennsylvania assembly sent Franklin to England as their colonial agent. Other printers tried different methods to thwart counterfeiters. James Parker of Woodbridge, New Jersey printed notes in two colors. With printing a labor-intensive process, it was thought the process to cumbersome for counterfeiters to go through the process of the second printing. Also, Parker used red ink as the second color. Red was more expensive than black ink in the 18th century.
The next wave of note is known as Obsolete Notes, sometimes called Broken Banknotes. These were privately issued currency starting in the 1830s backed by the assets of the issuing bank. These notes became obsolete in the 1860s when many of the issuing banks failed and the federal government changed the laws regarding currency issues. Obsolete notes are a popular collectible since many feature beautiful images, called vignettes, that represent local industries or patriotic themes.
As the Civil War raged, the public hoarded coins creating a shortage of circulating coinage. People started to use postage stamps for transaction requiring small change. Stamps were traded in envelopes that would fall apart causing the gum on the back to make them a sticky mess. As a result, the post office issued small, rectangular Postage Currency in 1862. Postage currency was larger than the postage stamp without the gum on the reverse, and the front depicted the postage stamp and its value. Without the adhesive, they could not be used for postage but could be redeemed at any post office for its face value.
Currency in the United States went from its chaotic stage to something the government issued and regulated with the passage of the National Bank Act of 1863. The law replaced the postage currency with fractional currency. Authorize by the government and printed by the American Banknote Company, fractional currency was issued through 1876 when coinage production caught up with demand and hoarding had ended. At this time, the Currency Bureau, later to be renamed the Bureau of Engraving and Printing (BEP) was created to cut and distribute the notes. Fractional currency is a popular collectible especially amongst those with interest in the Civil War.
Another Civil War collectible is Confederate Currency. These banknotes were primarily demand or promissory notes back by non-existent assets that made the notes worthless by the end of the war. During the war, the Confederate States of America issued seven series of currency printed by different printers throughout the south, some in the north, and in London. Confederate coinage, also collectible, was struck using mints under siege in Charlotte, Dahlonega, and New Orleans. During the Civil War, the chief coiner of the New Orleans Mint fled to France to continue producing coins for the Confederacy. This history makes these numismatics are very collectible by history and Civil War buffs.
Following the Civil War, paper currency is identified by type, denomination, and series date. The series date is not necessarily the date in which the note was issued. The series could represent the year the law authorized the notes, the year the production began, or in the case of current Federal Reserve Notes, the year when the signature of the Secretary of the Treasury changes.
Not including fractional and Confederate currency, the following are characteristics of United States currency:
Demand Notes were the first paper currency printed for the United States government for general circulation. These notes were essentially loans to the government during the Civil War to be paid on demand at designated Treasury offices following a maturity date. The backs of these notes were printed in green to prevent counterfeiting by people taking pictures of the note using a camera, the new technology of the time. Green did not photograph well. The term “greenback” came from the use of green inks to print these notes.
United States Notes were the first currency authorized by the Legal Tender Act of 1862 and the first notes printed by the National Currency Bureau. Also known as Legal Tender Notes, these notes were supposed to be backed by assets held by the government that were not necessarily precious metals. Large size United States Notes are very collectible with great designs that make them special.
National Bank Notes allowed banks with a federal charter to issue notes against their assets. In order for the banks to be allowed to issue currency, they had to purchase bonds from the Treasury and were allowed to issue currency up to 90-percent of the value of those bonds. The bonds were used by the federal government to insure the value of the notes. All notes were printed by the Bureau of Engraving and Printing to ensure that the designs were identical with only the bank name, location, and charter number printed for the issuing banks. The National Bank Note program ended in 1935 when the bonds securing the notes were terminated as part of the banking reorganization during the Great Depression. National Bank Notes are great collectibles for those interested in collecting items representing a state or region.
Silver Certificates began in 1878 when the government decided to increase the production of silver coinage with the passage of the Bland-Allison Act to satisfy silver mining interests. Silver coins were deposited with the Treasury and the equivalent dollar amount of silver certificates where produced. Silver Certificates could have been presented to the Treasury Department and redeemed for silver dollars. The series 1953B silver certificates were the last produced for circulation. In 1964, with the price of silver rising, the Treasury stopped redeeming silver certificates for silver dollars and started to distribute small vials of silver flake equal to $1. This redemption program stopped in 1968. All but the very rare 1934 Yellow Seal North Africa notes are available for collectors in nearly every denomination.
Gold Certificates were generally used to transfer money between banks and other large financial institutions. First issued in 1878, Gold Certificates were backed with gold deposited with the Treasury. Some of the lower denominations did circulate to a limited degree, but banks used others. Gold certificates were printed with bright colors, mostly gold-colored, and the reverse on the large notes (pre-1929) were also gold-colored. Small notes were printed with the traditional green reverses. Gold certificates were recalled with the gold recall in 1933.
Treasury Notes were issued as part of an 1890 and 1891 series to be paid to individuals selling silver bullion to the Treasury. Those paid with these notes could redeem them for the equivalent value in gold coins. The Treasury stopped this program after 10 years because of the considerable amount of labor required to carry out this program.
Federal Reserve Notes (FRN) were first issued in 1914 by the newly formed Federal Reserve System and are still being printed and distributed today. When first issued, FRNs were printed as large size notes and were reduced to the small notes we are used to today in 1929. After 1945, the Bureau of Engraving and Printing stopped printing all denomination over $100. By 1969, those large denominations were removed from circulation. Designs of FRNs remained the same until 1995 when the BEP altered the designs to include new security features. However, the $1 FRN has not changed since it was first introduced in 1929. FRN are readily available and accessible to most collectors. Common ways of collecting is by signature pairs. Other ways of collecting FRNs is by serial number patterns (e.g., radar patterns, series, low numbers, etc.), and by Federal Reserve District represented by the note.
Federal Reserve Bank Notes (FRBN) began to be issued in 1915 to transition from National Bank Notes to Federal Reserve notes. FRBN were obligations of the issuing Federal Reserve Bank branch and not the U.S. government. FRBN production was discontinued in 1934 and were stopped being issued in 1945. Since FRBN resembled National Bank Notes except that the issuing bank is a Federal Reserve Branch and are printed with “National Currency” across the top.
Currency collections can be as varied as the types of currency printed. Some currency was printed with themes such as the Educational Series of 1896 that used allegorical images in an attempt to educate the public. Other ways to collect currency is by their design, the color of the seal, the issuing bank, serial numbers, and signers.
If you collect by signers on the note, one of the more interesting notes is known as Barr Notes named for Joseph W. Barr, the 59th Secretary of the Treasury. Barr was confirmed and sworn into office on December 21, 1968, one month before the end of the Lyndon B. Johnson administration. Since the Secretary of the Treasury’s signature is on all Federal Reserve Notes, the BEP printed over 485 million one dollar notes with Barr’s signature before his term ended on January 20, 1969.
In the case of currency, size matters. Aside from the denomination, standard currency printed by the BEP used to be larger than it is today. Prior to 1929, U.S currency was 7 1/2 inches long by 3 1/8 inches wide. These are commonly called large notes. Another nickname for these notes are horse blankets. Beginning in 1929 with the Series 1928 notes, U.S. currency was reduced to the 6 1/8 inches by 2 5/8 inches notes we are used to using today. These are commonly called small notes.
If you ever looked at a note and noticed that a star (“*”) was included in the beginning or end of the serial number, you have a Star Note. A Star Note is used to denote that the note is a replacement note for one found to be defective or damaged during the printing process. To maintain the correct number of notes in a print run, the serial numbers are reclaimed and a star is added to note the replacement. Since Star Notes are replacements for errors, they are not as common as normal notes and are popular with collectors.
Since the Canadian government announced that the Royal Canadian Mint will stop striking “pennies” in the Fall of 2012 and that cash transactions will be rounded to the nearest five-cent increment. Non-cash transactions will not be rounded.
As part of the transition to the centless society, Canada will withdraw these coins from the market using redemption programs to allow citizens to return the coins for compensation. The Canadian government has also committed to working with charities to use this as an opportunity to raise money for their causes.
Since the announcement, there has been a lot of chatter from around the world regarding the elimination of the lowest denomination coin from various countries, including here in the United States. While other countries have eliminated their lowest denomination coin, Canada is the largest economy who have made this move.
Canada’s proximity to the United States has generated a lot of discussion about the United States doing the same. Those arguing for the elimination of the cent begin with that it costs the U.S. Mint 2.11-cents to produce one coin, losing 1.11-cents per coin. Similarly, Canada began their discussion with that it costs the Royal Canadian Mint 1.6-cents to produce their one-cent coin.
If Canada can drop their penny, then why can’t we do that in the United States?
In 1986, Canada stopped producing one-dollar currency notes and went to exclusively coins. Nearly ten years later, Canada began to produce two-dollar coins eliminating the two-dollar paper note from circulation. If Canada can drop their lowest paper currency denominations, why can’t the U.S. do the same?
Those of us who use the argument that other countries no longer use paper currency as their basic unit of currency are told (paraphrasing) “we are the United States, we don’t have to do what others are doing.” Now those same people who want the U.S. Mint to stop striking cents are pointing to Canada using a similar argument and bristle when given the same response to their argument.
Every study by even the most partisan group shows that the government will “save money” by eliminating the one-cent coin, change the composition of the nickel, and produce the dollar coin rather than paper. The differences in the studies are what they call opportunity costs—the cost borne through the changes and processing by the businesses, banks, and citizens affected by the changes.
The concept of the government “saving money” is wrong. Production of money does not cost taxpayers any money. The high production costs of the cent and nickel does reduce the amount of seigniorage the government earns when the coins are sold to the Federal Reserve.
Ending the production of specific denominations is not new to U.S. coinage. The last change occurred in 1933 when the gold was no longer used for coinage eliminating the quarter eagle, half-eagle, eagle, and double eagle coins. At times in the past, the U.S. Mint also produced half-cent, 2-cent nickel, 3-cent, 20-cent, and dollar gold coins. All were seen as a good idea at the time but fell out of favor for many reasons and were discontinued.
At some point, the decision criteria must be baselined in order to come up with a fair analysis in order to determine the best policy. To start that analysis, let the policy basis be on the least amount the government could do in order to maximize seigniorage while treating all markets fairly. Based on those guidelines, eliminate the one-cent coin, but also eliminate the half-dollar and the one-dollar paper note. Even if the five-cent coin does not undergo a composition change, all studies show that the government will earn more in seigniorage than any other option.
Based on other studies, this policy will have an economic impact on the markets outside of the government and the Federal Reserve. But that is for the markets to work out on their own and not for the government to dictate.
It is also a policy recommendation that will make everyone upset on all sides of the issue, meaning that it wreaks of compromise—which should not be a dirty word when making serious policy decisions.
The media, blogs, and pundits who do not read government reports beyond the executive summary have shown their lack of journalistic credibility over the latest report from the Government Accountability Office titled Alternative Scenarios Suggest Different Benefits and Losses from Replacing the $1 Note with a $1 Coin (GAO-12-307 [PDF] published February 15, 2012).
The latest tome from the GAO is a followup to GAO-11-281, Replacing the $1 Note with a $1 Coin Would Provide a Financial Benefit to the Government published almost a year ago. It was a report produced for the Senate Committee on Banking, Housing and Urban Affairs and addressed to Sens. Richard Shelby (R-AL), Bob Casey (D-PA), and Tom Harkin (D-IA) after being asked to analyze the cost differences to the government using a dollar coin over the dollar note. In that report, the GAO estimated that replacing the note with a coin will save an estimated $5.5 billion over the 30 year lifetime of a coin.
Rather than accepting that report, Sen. Scott Brown (R-MA) used his position as the Ranking Member of the Senate Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security, commissioned the GAO to rework the report under different condition. Sen. Brown asked the GAO not to add seigniorage to the calculation, reduce the report to cover ten years, and calculate the a one-to-one replacement rather than the 1.5 coins to one note replacement used in the 2011 report.
Seigniorage is the profit the U.S. Mint and the Bureau of Engraving and Printing earns on producing their products. It is calculated by the difference between the cost of producing the money versus its face value, which is what the Federal Reserve pays for that money. For example, the BEP reports that it costs 7½ cents to print one note. When they sell a one dollar Federal Reserve Note to the Federal Reserve, the BEP collects 92½ cents for that transaction. By law, both the U.S. Mint and BEP deposit seigniorage into their respective Public Enterprise Funds (see 31 U.S.C. § 5136 for the U.S. Mint and 31 U.S.C. § 5142 for the BEP). Both laws require the Secretary of the Treasury to deposit excess over what is needed for operations into the General Fund. Not only are these bureaus manufacturing money, they earn money that is deposited for the general use of the government.
Seigniorage is an important factor in the operations of the money manufacturing operations of the U.S. Mint and BEP which is why it is important in the analysis of any bill introduced in congress. This analysis is performed by the Congressional Budget Office. When the economists of the CBO to reads a bill and determine its effect the country’s budget, they are supposed to take every aspect of the bill into consideration. Since all coin-related bills requires the U.S. Mint to deposit its profit in their Public Enterprise Fund, calculating the effect that seigniorage has is required. If fact, when the CBO analyzed the Presidential $1 Coin Act of 2005, the “CBO estimates that replacing the Golden Dollar with the $1 Presidential coin would increase seigniorage by about $280 million over the 2006-2015 period.”
What Sen. Brown asked the CBO to do is to figure out what would happen if the U.S. Mint was to produce more coins but not count their profit what would the effect be. The answer is not based in any reality because if you do not count the profit (seigniorage) you are only telling part of the story. Basically, Senator Brown is asking to the CBO to use the sin of omission in an attempt to justify his policy position.
Remember, Senator Scott Brown is the junior senator from Massachusetts where the Dalton-based Crane & Co. is the sole supplier of currency paper to the Bureau of Engraving and Printing. Brown, who is completing the term of the late Senator Ted Kennedy, would never have been appointed the Ranking Member of any subcommittee as a freshman member except that he is a Republican who won a long standing Democratic seat. Brown is currently locked in a heated campaign against Elizabeth Warren (D) for the 2012 election.
It is clear that Sen. Brown changed the parameters of the original GAO report (GAO-11-281) as a way to stop attempts to replace the paper note with coin to use in his campaign for his senate seat as a favor to Crane & Co. Unfortunately, the media outlets who covered the release of this report has chosen to read the executive summary and skipped Page 1 that begins “Dear Senator Brown.”
For the first time since the 2008 World’s Fair of Money, I went to a coin show. Attending the Whitman Baltimore Expo was timed so that I could be there before the Annual Meeting of the Maryland State Numismatic Association (MSNA), but so not to spend a lot of time on my bad leg. When I arrived after 1:30 PM, there was still nice activity on the bourse floor. Although some dealers had left the show, there was a significant presence. After carefully assessing the landscape, it appears that the folks at Whitman has moved dealers around so that the area near the entrance continues to have active dealers.
Seen on the way to the Whitman Baltimore Expo!
On my way to Baltimore driving north on I-95 from the Capital Beltway, I came upon an interesting looking turquoise truck. As I approached, I noticed it had Taylor Swift’s signature. While I am not one of her fans, seeing a concert equipment truck on I-95 is not a usual occurrence. Searching on-line, the truck must be traveling to New York from Columbia, South Carolina. Taylor was playing November 20-21 in Madison Square Garden.
When I arrived I did a quick tour of the bourse floor toward Halls B and C. For this show, I found that the dealers in Hall C were the most active and had the some of the more interesting items. Before going into the Hall C area, I found a dealer in foreign coins to sell some Canadian silver dollars. With that money, I went to Hall C and purchased 2011 silver Panda and Britannia coins.
Time was short, so I went to the third floor to find the meeting room for the MSNA meeting. Since the floors above the bourse were reserved for educational seminars for the American Physical Society, meeting rooms for the Whitman show were reserved more than half-way to the Camden Yards end of the Baltimore Convention Center. If you have not visited the BCC, it is a very large structure and the walk is not easy for someone with a bad leg. But I made it and the MSNA Board accomplished some work.
2012 Maryland State Numismatic Association Officers
Amongst the agenda items was the installation of officers. With that, I am now the Vice President of the MSNA. Since this is the first time I am an officer, I have to buy a red sports jacket like the rest of the board. I should have one by the Whitman Expo in March.
On my return to the bourse floor, I noticed more than half the dealers had packed and left the show. For me, this is not a problem since I was more interested in the interesting item from the dealers that were left, primarily at the far end of Hall B and the dealers in Hall C. For the first time, I stopped at the table of a dealer who was selling ancient coins. Although I am not a collector of ancients, I have supportedAncient Coin Collectors Guild (ACCG) and their efforts to prevent import/export restrictions on ancient coins. I spoke with the dealer for a few moments asking questions about the ancient coin market.
I also had the chance to speak with Bob Hall, a numismatic book dealer. Every time I see him at a show, I make sure I stop by his table. Hall has a wide selection of books from the current to the old. He is also a good conversationalist who really knows his stuff. Even though I did find a book I was interested in, it was a bit out of my price range. I will try again in March.
One thing I noticed is that there did not seem to be a currency area. Currency dealers were found in different places and not in one particular area.
At the end, I sat at the table of one dealer in Hall C and went through his “junk bag” of foreign currency. Flipping through those notes gave me an idea for a collection and potential exhibition. If I can find currency with the appropriate characteristics, I will have an exhibit ready for the Whitman Expo in March.
After the show closed for the evening, returned to my car happy to be off of my feet. After a stop for an appropriate beverage, I spent the next hour driving home.
That was a lot of fun, even for a few hours. I will have to look into going to a smaller show before the next Whitman Expo.
In a move that made the numismatic world notice, Rep. David Schweikert (R-AZ) introduced H.R. 2977, the Currency Optimization, Innovation, and National Savings Act (COINS Act). In short, the purpose of this bill is to transition the U.S. economy to using dollar coins. The bill is cosponsored by Reps. Jeb Hensarling (R-TX), Blaine Luetkemeyer (R-MO), Jim Renacci (R-OH), and Pat Tiberi (R-OH).
First provision of the bill is to remove the Susan B. Anthony Dollar from circulation. Under this provision, when a bank receives an Anthony Dollar, it is returned to the Federal Reserve and removed from circulation. The Federal Reserve then can sell the coins to dealers or to countries who are using the U.S. dollar as its primary currency. Removing the Anthony dollar from circulation will prevent the confusion between the golden colored dollars that would be in circulation. As part of this section of the bill, there are quarterly reporting requirements to congress that documents the progress of this bill.
As part of this first provision, the bill makes a subtle change to Section 5112(p)(2) of title 31, United States Code (31 U.S.C. 5112(p)(2)) to make the Board of Governors of the Federal Reserve a partner in the publicity of using the dollar coin. After all, the coins are being stored in their facility and it is in their best interest to have them circulated.
But the key provision of the bill is in Section 3 that outlines the transition to the use of dollar coins. At the beginning, the section makes it clear that purpose of the bill is to create a transition environment so that the coin replaces the paper note:
It is the policy of the United States that after $1 coins achieve sufficient market penetration such that consumers and retailers are comfortable using $1 coins and are able to obtain adequate supplies of $1 coins, $1 coins should replace $1 Federal Reserve notes as the only $1 monetary unit issued and circulated by the Federal Reserve System.
If this bill passes, Federal Reserve banks may continue to place into circulation $1 Federal Reserve notes until the number of dollar coins placed into circulation exceeds 600 million annually or four years after the bill is enacted, which ever comes first. During this transition phase, Federal Reserve banks cannot order new paper notes but may continue to circulate notes on hand. They are also to continue to follow their unfit currency policies by removing notes that are torn or otherwise unfit for circulation. These notes will be replaced by coins.
After the introduction of H.R. 2977, Sens. Scott Brown (R-MA) and John Kerry (D-MA) introduced S. 1624, the Currency Efficiency Act of 2011 to place a “restriction on overproduction of $1 coins.” However, this is seen as the Massachusetts senators sponsoring a bill in an attempt to protect a constituent, Crane & Co., the exclusive supplier of currency paper to the Bureau of Engraving and Printing.
H.R. 2977 appears to be the first bill introduced that creates a transition plan rather than advocating an abrupt end to the paper note. Considering the emotional response when people are polled, a four year transition is a good idea. It will give people a chance to get used to the coins while both circulate together. But if it passes, I will make the immediate transition and exclusively use coins.
If you agree with the COINS Act, and I hope you do, contact your representative to express your support for H.R. 2977. If you want a few talking points, you can say:
The GAO reports that switching from paper to coins will save the government approximately $5.5 billion over 30 years
If voted into law, this bill will reduce the $1.1 billion stockpile of coins in the Federal Reserve coin rooms. In this economy, adding $1.1 billion to the economy is better than having it sitting on the shelf.
It will allow the United States to join the rest of the industrialized world, including the United Kingdom and the Eurozone whose currencies are worth more than ours, whose unit currency is represented as a coin
You can find out how to contact your representative at the House of Representatives website at house.gov.
When congress comes back to Washington to (hopefully) represent their constituency to carry out the nation’s legislative interests, a twelve-member bipartisan commission (a “super congress” as the press is calling them) must find a way to deal with the government’s debt and deficit by Thanksgiving or the law requires an additional $1.5 trillion in cuts, mostly to defense.
Followers of the debate have found that there are fundamental differences between both sides of the aisle as to how to manage the affairs of government. Rather than look for common ground and try to negotiate about the differences, their actions are reminiscent of a smoker who quits their habit but uses food to make up for the cigarettes trading one condition (cancer risk) for another (obesity). In an attempt to get them started, I have a proposal:
End production of the one-dollar Federal Reserve Note!
According to the most recent report from the Government Accountability Office, the independent, nonpartisan legislative branch agency that investigates how the federal government spends taxpayer dollar, the government could realize a savings of $5.5 billion dollars over 30 years by eliminating the paper dollar for coins.
By eliminating the one-dollar Federal Reserve Note, congress can begin show that they are willing make “difficult decisions” to help the economy while not stepping on either side’s political hot buttons. Also, if congress votes to eliminate the paper dollar, the approximately $1.1 billion of dollar coins sitting the Federal Reserve’s coin vaults will start to circulate in the economy. This is $1.1 billion dollars of money not doing anything but sitting. It would be a $1.1 billion stimulus to the economy that will not add any money to the deficit because the coins are already paid for.
If you add the $1.1 billion of existing money to a $5.5 billion in long term savings, that is a total of $6.6 billion of economic immediate economic stimulus that does not cost the government anything. Further, once the $1.1 billion is circulated in the economy, the money spent will generate additional revenues from the taxes collected by the economic activity, something both parties said they want to encourage.
But this is such a small amount compared to the total debt, why do it?
Using the correct form of the Lao-tzu quote: “The journey of a thousand miles begins beneath one’s feet.” Lao-tzu believed action naturally arises from stillness. This country has been still on its money production policies, it is a natural move to eliminate the one-dollar note. Or to use the more colloquial version: “A journey of a thousand miles begins with a single step.”
You people need to get over yourselves – put it to a vote and the public does not want or need dollar coins! / Just because coin collectors want coins doesn’t mean the rest of us need to suffer. / If it’s dollar coins versus dollar bills… bye bye dollar coins.
It looks like saying that countries like Australia, Canada, France, Japan, the Netherlands, New Zealand, Russia, and the United Kingdom eliminated their unit currency in favor of coins is not a good argument for some. Or that the European Union started this century with producing only a coin for the 1-Euro denomination will not work either. How about this:
Supporting the elimination of the paper dollar is the patriotic thing to do!
Is it patriotic to continue to waste money? Or is it our patriotic duty to do what is in the best interest of the country even it means making a few minor sacrifices for the common good? True patriots will make the adjustments and do what is right by the country!
Sacrificing for your country is the patriotic thing to do!
The Bank of Canada formally unveiled their new polymer banknotes on Tuesday at its main offices in Ottawa. Canada’s central bank representatives explained the new currency designs and the security features that will be included in the notes. Minister of Finance Jim Flaherty said that the note’s “designs celebrate Canada’s achievements at home, around the world and in space. Bank notes are cultural touchstones that reflect and celebrate our Canadian experience.”
New polymer $100 notes, on schedule to be issued in November 2011, will feature images that focus on Canadian innovations in the field of medicine. The obverse of the note will include an updated portrait of Sir Robert Borden, Prime Minister of Canada between 1911 and 1920.
Security features of the note are two transparent areas that will be difficult to counterfeit yet be easy to check. Most prominent are two transparent areas: the larger area extends from the top to the bottom of the note and contains complex holographic features. The other is in the shape of a maple leaf. “The Bank’s objective with every new series is to produce a bank note that Canadians can use with the highest confidence,” said Bank of Canada Governor Mark Carney.
RCMP Commissioner William J.S. Elliott added, “These new and technically innovative notes will go a long way to deter the threat of counterfeiting in coming years.”
The Bank of Canada issued a video showing off their new $100 note and the security features:
Une version de cette vidéo en français peuvent être trouvés ici.
In the mean time, the Bureau of Engraving and Printing has been silent on the production and potential release of the United State’s new $100 Federal Reserve Note. Release of the new note has been delayed since its scheduled February release date because of production problems.
“The single biggest obstacle to successful production was the tendency of the $100 currency paper with the three dimensional security ribbon to crease as the sheets of paper fed through the intaglio printing press,” BEP Director Larry Felix reported in the bureau’s 2010 Annual Report.
I tried to contact a BEP Media Relations representative about the status of the new notes. I was told there was no additional information available.
I ask again: With the new $100 note having printing problems, why has the BEP not looked into using the polymer substrate for U.S. currency? Why does the Federal Reserve, BEP, and Secret Service cling to 19th and 20th century printing technologies in the 21st century? Or is this a matter of “not invented here” to avoid alleged controversy by using a something invented by a foreign central bank?
It is time for the money producing cabal of the Federal Reserve, BEP, and Secret Service to face reality. They need to cut their losses with paper and look to the future for something better.
At the start of the Revolution, the Continental Congress allowed the colonies to print their own currency to help pay for the war. The Maryland Assembly approved an issue of $266,666 to be redeemed in gold or silver at 4/6 sterling per dollar by January 1, 1786. Backed by £100,000 still on account at the Bank of England, the emission was used to promote the manufacture of gunpowder.
To continue to pay for the war, the Maryland Assembly approved an emission of $535,111. The notes were to be payable by January 1, 1786 in gold or silver at the rate of 4/6 sterling per Continental dollar. Frederick Green printed these notes using new copper plates engraved in Philadelphia. The back depicted an arm holding a shield with the hand clenching the strap of the shield and holding a victory laurel with the motto SUB CLYPEO (Behind the shield).
My new purchase in my Maryland Colonial series is a Two-Thirds Dollar note that was valued in 1775 as worth 3 Shillings Sterling. Because of the emergency nature of this emission, there were many signers of these notes. This PCGS Fine 12 example was signed by Nicholas Harwood and John Duckett. John Duckett, Jr. was the clerk in the lower house of the Colonial Assembly, Prince George’s County clerk, and distributor of currency on the western shore. Nicholas Harwood was Associate Clerk of the Court in Anne Arundel County from 1772–77 and later became Clerk of the same from 1777–1810. Harwood was a delegate to Maryland’s Constitutional Convention of 1776.
This week, the Bank of Canadaannounced that they will be converting their banknotes from paper to using the polymer substrate. The Bank of Canada will begin to issue C$100 notes in November 2011. A C$50 note will be issued in March 2012 and the remaining denominations (C$20, C$10, and C$5) will be issued in 2013.
The polymer “paper” was developed by the Reserve Bank of Australia to enhance the durability of the notes and to incorporate security features not possible with paper or rag-based paper. RBA has been distributing polymer notes since 1992. While the polymer substrate costs little more and the production is only marginally more expensive, the benefit will come from the reduction in counterfeiting and the durability of the note. Polymer will last three-to-six times longer than rag-based paper.
On April 21, 2010, the government unveiled the new $100 note design. The new note, still made of rag-based paper, would incorporate new security features such as a different use of color shifting ink and a 3-D security ribbon. The note would continue to use security features first introduced in U.S. currency in 1996. The new notes were scheduled to be issued on February 10, 2011.
However, on October 1, 2010, the Federal Reserveannounced that the issue of the redesigned $100 note will be delayed. It has been reported that the notes are folding during the printing process making a number of them unusable. It was further reported that the BEP is working with its paper provider, Crane & Co., to fix the issue.
I had asked a BEP Media Relations representative about the status of the new notes. I was told there was no additional information available.
With the new $100 note having printing problems, why has the BEP not looked into using the polymer substrate for U.S. currency? Why does the Federal Reserve, BEP, and Secret Service cling to 19th and 20th century printing technologies in the 21st century? Or is this a matter of “not invented here” to avoid alleged controversy by using a something invented by a foreign central bank?
It may be time for the Federal Reserve, BEP, and Secret Service to face reality that the old ways of doing things are not working and to look to the future for something better.
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