May 31, 2008 | coin design, legislative
On a stormy Saturday in your nation’s capital, I have been taking my inside time to watch the Rules and Bylaws Committee [PDF] of the Democratic National Committee argue about what to do with the delegates from Florida and Michigan. During one of the interruptions because the storms knocked out the signal, MSNBC’s Chris Matthews commented “welcome to the sausage factory of politics,” a twist on the Otto von Bismarck quote “Laws are like sausages, it is better not to see them being made.”
After a brief chuckle, I thought how this was true in the world of coin production in the United States since every coin and medal that the US Mint produces is governed by law. In fact, I think the United States is the only country the regulates coins in this manner.
Rather than go into how laws are made here in the United States, I point the reader to this excellent write up provided at the Library of Congress. The PDF version describes this sausage making recipe in 58 pages.
The laws that are passed which govern the US Mint are codified in Title 31, Subtitle IV, Chapter 51, Subchapter II of the United States Code (U.S.C.). Section 5111 (31 U.S.C. §5111) give the authority to strike coins and medals to the Department of the Treasury. Section 5113 (31 U.S.C. §5113) talks about the tolerance in the weight of minted coins and orders that their weights and content be verified.
But the significant section of coinage law is Section 5112 (31 U.S.C. §5112), Denominations, specifications, and design of coins. Section 5112 covers all of the specification for every coin struck by the Mint. It describes the size, weight, content, and the design of the coin. Very little is left up to the Mint in coinage design.
Within Section 5112, there are specific paragraphs that tell the Mint exactly what coins are to look like. For example, paragraph (q) (31 U.S.C. §5112(q)) titled Gold Bullion Coins, that tells the Mint that the $50 gold coin is to “bear the original designs by James Earle Fraser, which appear on the 5-cent coin commonly referred to as the ‘Buffalo nickel’ or the ‘1913 Type 1’.”
Other paragraphs, like paragraph (l) that authorizes the 50 State Quarter Program, describes the process which the design will be made. In the case of the state quarters, the recommendation starts with the states then goes through the Mint’s regular design process.
The Mint’s design process is another example of the sausage making that governs US coinage. Once the Mint receives the Public Law, it either takes the input from the state or commemorative group involved to the Mint’s artists and engravers so they can create several designs that meet the legal requirements. Coin designs go through an internal review process before they are given to the Director of the Mint to submit them to the next process.
Once the designs are created, they are forwarded to the Citizens Coinage Advisory Committee to review and recommend a design. The CCAC may also ask the artists to alter designs for historical or aesthetic reasons and return with updated designs.
The CCAC was established by congress in 1992 as part of Public Law 102-390 (31 U.S.C. §5135) “to advise the Secretary on the selection of subjects and designs for commemorative coins.” (emphasis added)
Once advised by the CCAC, many paragraphs within Section 5112 requires that the designs are then sent to the US Commission of Fine Arts for their “review.” The CFA reviews the same designs as the CCAC and are not bound by the CCAC’s decision. In fact, there are many cases where the CFA will choose a different design or request different changes than decided by the CCAC. Changes are then vetted by the CCAC and the CFA. Many times, the CCAC and CFA will continue to disagree. An example of this version of the sausage grinder was evident on selecting the designs for the reverse of the 2009 Lincoln Cents.
But the process does not end there. The recommendations of the CCAC and CFA are forwarded to the Secretary of the Treasury, who has the final approval of all designs. Since the founding of the CCAC, no Treasury Secretary has ignored the recommendations of either organization. Typically, the Secretary approves the same design as recommended by the CFA, but is not required to do so. A classic example of this was the decision by Treasury Secretary Andrew Mellon to ignore the CFA recommendation on the design of the original Washington Quarter.
During the design process, the Mint ensures that the metals are procured to strike the coins or medal. Within Section 5112 are many paragraph that require that the metals used to strike the coins be purchased from US mines on the open market. The US Mint is the single largest purchaser of gold and silver in the United States while they compete with everyone else for the stores of copper, tin, and nickel to strike circulating coinage. The law prohibits the Mint from paying anything other than market value for coinage metals.
Once the Secretary approves the design, the Mint’s engravers do what is necessary to make the dies that will be used to strike the coins or medals. The Mint then gets to decide on the packaging and the price of the commemorative coin, bullion issue, or medal. Commemoratives will usually add a surcharge that will be donated to a particular organization. The parameters for pricing coins is also described in Section 5112.
Sometimes, the Mint does not even get to control where the coins are struck. Some laws will specify which branch mint will strike the coins. Others, like bullion issues are predetermined in other sections within Title 31.
Before collectibles can be sold, the Mint has to determine the price that will be charged for these items. Section 5112 requires the Mint to take into consideration of the market value of the metals used, the costs required to produce and sell the item, and the surcharge that will be donated to a particular organization. As we have seen in the past year, the Mint will re-price precious metals issues as the volatile market adjusts prices.
Finally, the coins and medals are struck. If they are circulating coins, the Mint strikes enough to meet the demand of the Federal Reserve plus additional for sale to collectors. Commemorative and collectible bullion can have mintage limits that are defined in Section 5112
The only part of the process that the Mint has complete control over is the marketing and packaging for numismatic sales. While the Mint may not produce more than the legal limit for any coin, they are allowed to create special packaging for collectors. The Mint has created special sets for some commemorative issues that include “coins and chronicles” sets that includes commemorative and proof strikes of circulating coins.
Whether it is the 50 State Quarter in circulation, a commemorative issue, or a medal honoring someone for their contribution to society, you are looking at the end result of the sausage making process that goes into making our coinage. Remember that when you think, “why did the Mint do that?”
May 17, 2008 | commemorative, legislative, US Mint
In a rare display of overwhelming bipartisan support, the House of Representatives passed three numismatic related bills. One was the Saint-Gaudens Double Eagle Ultra-High Relief Bullion Coin Act that was passed 415-0 (18 not voting) that will allow the US Mint to strike the high relief 24-karat gold coins featuring the Augustus Saint-Gaudens Double Eagle design.
On a vote of 403-8 (22 not voting), the House passed H.R. 5872, Boy Scouts of America Centennial Commemorative Coin Act. If passed by the Senate and signed by the President, this bill will authorize the Mint to strike one dollar proof and uncirculated silver coins to commemorate the 100th Anniversary of Scouting in the United States in 2010. The bill stipulates that the coins can be only struck at one Mint facility and would be distributed starting February 8, 2010. A $10 surcharge will be added to the price of the coins that will be paid to the National Boy Scouts of America Foundation.
Scouting started in 1907 in England. To celebrate the 100th anniversary of the scouting movement, the Royal Mint produced a beautiful commemorative coin and associated products.
In 1814, Baltimore attorney Francis Scott Key joined Colonel John Stuart Skinner aboard the HMS Tonnant to negotiate a prisoner exchange for Dr. William Beanes, a Maryland resident who was captured during the British attack on Washington, DC. After Key and Skinner dined with the ship’s senior officers, the three men were not allowed to return to Baltimore. That evening, the British spent part of 25-hours bombing Fort McHenry in the Baltimore Harbor.
In the morning, Key awoke to the view of the flag still flying over Fort McHenry. This inspired Key to write the four-stanza poem “The Defense of Fort McHenry“ which he said should be sung to the tune of The Anacreontic Song.
Over the years, the poem’s popularity would gain and then wane. On July 27, 1889, Secretary of the Navy Benjamin F. Tracy signed a general order making “The Star-Spangled Banner” the official song to be played when raising the flag.
In 1916, President Woodrow Wilson signed an executive order to have the “Star-Spangled Banner” be played by the military and for other “appropriate occasions.” After a controversy brewed when a cartoon announced, “Believe It or Not, America has no national anthem,” President Herbert Hoover signed the law making it the official National Anthem in 1931.
To honor the bicentennial of the War of 1812 and Key’s poem that became our national anthem, the House passed H.R. 2894, Star-Spangled Banner and War of 1812 Bicentennial Commemorative Coin Act. The bill calls for one-ounce proof and uncirculated silver coins designed to be “emblematic of the War of 1812 and particularly the Battle for Fort McHenry that formed the basis for the ‘Star-Spangled Banner’.“ Coins will be issued during 2012. The $10 surcharge will be paid to the Maryland War of 1812 Bicentennial Commission to help in its role of providing education, research, and celebrating the bicentennial of the War of 1812.
All of these bills must be passed by the Senate and signed by the President before they become law.
May 9, 2008 | commemorative, legislative, medals
On Tuesday, the White House announced that President George W. Bush signed H.R. 4286 to award the Congressional Gold Medal to Daw Aung San Suu Kyi, Burma’s prime minister-elect who has been under house arrest for the past six years. The enrolled bill was sent to the President on May 1, President Bush singed the bill after the recent natural disaster in the country now called Myanmar and the problems with trying to get aid to the people posed by the current military government.
Aung San Suu Kyi is the 1991 Nobel Peace Prize recipient for her work on behalf of the Burmese people. When award the $1.3 million prize, Ms. Suu Kyi used the money to establish a health and education fund for Burma. She is the only Nobel Peace Prize winner imprisoned. Congress will present her with the gold medal to recognize her commitment to peace, nonviolence, human rights and democracy in Burma.
H.R. 4286 call for the Secretary of the Treasury to “shall strike a gold medal with suitable emblems, devices, and inscriptions.” The Secretary can also strike duplicate bronze and gold medals for sale to the public at a price to be determine. Proceeds from the sale of duplicate medals will be deposited in the US Mint Public Enterprise Fund.
May 7, 2008 | BEP, cents, coin design, coins, currency, gold, Israel, legislative, US Mint
It has been a week since my last post and I thought an update was in order. I will follow up with a post for some of these at another time. This will give me something to do while proctoring the final exam in an information security course I am teaching this semester.
I recently received four polymer 20 New Israeli Shekelim notes from a dealer in Israel. These notes are the first that Israel is producing on polymer “paper” that was developed by the The Reserve Bank of Australia. Israel is another in the growing list of countries to start using the polymer material. The notes include the same security features as rag-based notes and include a new clear window with a watermark that is said to be extremely difficult to counterfeit. 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.
According to unconfirmed reports, the Bureau of Engraving and Printing is experimenting with different types of polymer paper for both US and foreign production. If the BEP can adjust their equipment to print on polymer paper, they can solicit business from other countries to produce their currency. Once the BEP builds its portfolio, they are prepared to go to congress to recommend discontinuing production of the one-dollar note. Until then, the BEP will continue to produce one-dollar notes in order to keep workers in key congressional districs in the Washington, DC and Fort Worth, TX areas employed. Remember, 95-percent of the BEP’s production are for one-dollar federal reserve notes.
The spot price of gold continues to drop as the dollar gains against the Euro and the Pound. Prices are returning to pre-2008 levels. However, buyers of gold collectors coins from the US Mint has not seen their prices reduced. While the Mint repriced gold and platinum coins in February and March, the Mint has not lowered their prices with the market. The one-ounce American Gold Eagle proof coin is still $1,199.95, the new price given in February. With gold closing at $876.88 today, the $327.07 premium is 36.8-percent higher than the spot price. This will cause problems for those who buy at thiese prices when reselling these coins.
While we are talking about gold, the Original Saint-Gaudens Double Eagle Ultra-High Relief Bullion Coin Act was simultaneously introduced in both the House (H.R. 5614) and Senate (S. 2924). These identical bills will allow the Mint to strike high-relief $20 gold pieces using the Augustus Saint-Gaudens original 1907 design. The date will be in roman numerals and the motto “In God We Trust” will be added over the rising sun as it appeared in 1908. The coin will be on a double-thick, 24-karat gold planchet (sometimes called a piefort) 27 millimeters in diameter.
The US Mint finally posted its online product schedule for the rest of the year. The only thing that jumps out at me is that the 2008 American Buffalo 24-karat gold proof coin is not listed.
On Tuesday, the House of Representatives began to debate H.R. 5512, the Coin Modernization and Taxpayer Savings Act of 2008. The primary provisions of the bill will allow the US Mint to determine the size and composition of US coins without having to ask congress for permission. It also specifies that following 2009, the one-cent coin would be “be produced primarily of steel and treated to impart a copper color to its appearance similar to one-cent coins produced of a copper-zinc alloy.” Debate was cut off on procedural grounds by Republican lawmakers who oppose the bill.
It was just another uneventful week!
Apr 25, 2008 | legislative, shows
Maryland Governor Martin O’Malley signed House Bill 1386 (HB1386) on April 24, 2008 that would exempt exempt dealers attending a show sponsored by a non-profit organization from having to be licensed and pay sales tax in Maryland. See my post on April 16 for more about the law.
In addition to being exempt from the American Numismatic Association’s World’s Fair of Money™ that will be held at the Baltimore Convention Center at the end of July, but it also covers the Maryland State Numismatic Association 36th Annual Convention and Coin Show that will be held at the Maryland State Fairgrounds in Timmonium the weekend prior, July 26-28.
Tables are available for those who want to participate in the MSNA show. For more about the show and contact information, click here. MSNA is a § 501(c)(3) tax exempt organization which should qualify dealers to be exempt from sales taxes.
Apr 16, 2008 | legislative, shows
Earlier this month the Maryland General Assembly unanimously passed House Bill 1386 to amend the Code of Maryland Regulations (COMAR) 17-1801 to exempt dealers attending the American Numismatic Association World’s Fair of Money from having to pay sales tax. As the law was originally written, a dealer who attended more than three shows would have to apply for a trader’s license with its appropriate fees and requirement to pay sales taxes.
The amended law says that a dealer would file an affidavit saying that they “has not participated in more than 3 shows, not including participation in one show sponsored by a national organization that is exempt from taxation under § 501(c)(3) of the Internal Revenue Code, during the previous 365 days.” (change underlined) The ANA is a tax exempt organization.
This means that dealers can continue to attend the thrice yearly Whitman Shows (next one on June 5-7) and also the World’s Fair of Money in July-August without the burden of having to pay Maryland Sales Taxes. Since the bourse at the World’s Fair of Money is sold out, this amended law will preserve the attendance at the Whitman show.
HB 1386 has yet to be signed by Governor Martin O’Malley. The next bill signing day will be on Thursday, April 24 at 10:00am where this bill should be part of that ceremony.
As president of one of the sponsoring clubs, I invite everyone to Baltimore this summer to see what will be a fantastic show that will include four halls of the Baltimore Convention Center being open for the bourse activities. Book your rooms now since many of the area hotels are beginning to report sell outs!
Apr 3, 2008 | coins, commemorative, legislative
On April 1, 2008, the House of Representatives passed HR 2040, Civil Rights Act of 1964 Commemorative Coin Act by a voice vote. If the bill passes the Senate and is signed by the president, the bill authorizes the US Mint to issue a one-dollar silver commemorative coin to honor the fiftieth anniversary of the passage of the Civil Rights Act of 1964 in 2014.
Although the bill does not specify a design or a theme, the bill requires the Mint to undergo the same bureaucratic review by the Commission of Fine Arts and the Citizens Coinage Advisory Committee. It is possible that a different design could be used for the proof and uncirculated coins.
Sales of these coins will include a $10 surcharge that will be given to the United Negro College Fund.
HR 2040 was introduced by Rep. John Lewis (D-GA) in April 2007. In the year since its introduction, the bill gained 313 co-sponsors . Because of the number of bipartisan co-sponsors and the work of Barney Frank (D-MA), Chairman of the Financial Services Committee, to work with Ways and Means Committee Chairman Charlie Rangel (D-NY), the bill was brought to the floor without committee hearings. The forty minute debate included accolades to the people who worked on getting this bill to the floor including Rep. David Scott (D-GA).
Now the bill goes to the Senate for their consideration. The Senate may choose to act on the House version or may consider S. 1437 was introduced in May 2007 by Sen. Debbie Stabenow (D-MI) with 13 cosponsors. It would be unlikely that the Senate will vote on their version since both versions are identical. Passing both versions would force the congress to form a conference committee to reconcile any differences and send it back to the chambers for up-or-down votes. That is too much work for an idea that should pass without further discussion.
Dec 27, 2007 | coin design, coins, commemorative, legislative, RCM, Royal Mint, state quarters, US Mint
Around the end of November or the beginning of December, the numismatic year begins to wind down and we start to look ahead to the new year. As 2007 has entered its final week, December was a buys and interesting month with the voting for the People’s Choice Award for Coin of the Year, to the release of the 10th Anniversary Platinum Eagles, the release of a plethora of Presidential $1 Coin products by the US Mint, and congress doing good and bad with our money. But with a week to go in 2007, everyone is getting ready for 2008.
Looking ahead, this is the last year of the 50 States Quarters for the states—the District of Columbia and the territories will have quarters issued in 2009. Designs have been announced with Arizona and Alaska having the potential to be very good looking coins.
Designs for the four Presidential $1 Coins have been announced. For 2008, the new dollar coins will feature James Monroe, John Quincy Adams, Andrew Jackson and Martin Van Buren. It is apparent that the Mint engravers are using official portraits and other art to base the coin designs. This makes makes the portraits very pleasing and worthy of being on coinage. Along with the Presidential coins, the First Spouse gold coins will include Elizabeth Monroe, Louisa Adams, Andrew Jackson’s Liberty, and Martin Van Buren’s Liberty. Both Jackson and Van Buren were widowed when they served as president.
Speaking of dollar coins, 2008 begins the Native American $1 Coin program. From 2008 through 2016, the reverse of the Sacagawea “Golden” Dollar will be changed yearly commemorate an aspect of history of the native American people. It will be interesting to see how the Mint will handle the design of this coin with the built-in bureaucracy prescribed by law.
The first commemorative for 2008 will be the American Bald Eagle Recovery and National Emblem Commemorative Coin to honor of the recovery of the Bald Eagle species, the 35th anniversary of the Endangered Species Act of 1973, and the Bald Eagle’s importance as a national symbol. I cannot help from thinking that Benjamin Franklin wanted the turkey as the national symbol!
The Bureau of Engraving and Printing will release a redesigned $5 Federal Reserve Note with updated security features and a new purple color and a larger “5” on the reverse for the visually impaired. Sometime during 2008, BEP will introduce a redesigned $100 FRN with new security features and color. Because the BEP is not required to have its designs vetted by the Commission of Fine Arts, the new design will remain a secret until the BEP is ready to make their announcement.
Outside of the United States, the Royal Canadian Mint has started to introduce new non-circulating legal tender (NCLT) coins with new designs. The RCM is stressing new colors, designs, and the embedding of gemstones in their coins. Also, the 2010 Winter Olympics continues to be a significant theme of RCM coins.
Across the pond in the United Kingdom, the Royal Mint is advertising their new designs. New designs for legal tender coins are available from the Royal Mint whose sets include three commemorative coins honoring the 60th birthday of Prince Charles, the 450th anniversary of the accession of Queen Elizabeth I, and commemorating the 100th anniversary of the 4th Olympiad held in London.
Even The Perth Mint has issued its 2008 Silver Koala. This $1 NCLT silver coin is the second in the series of the Koala series introduced in 2007. The Perth Mint has also tried new coinage methods that includes moving parts and holograms.
It is going to be a very busy year and exciting year in numismatics.
Dec 23, 2007 | coins, dollar, legislative
In the excitement of the extension of the 50 State Quarters Program to include the District of Columbia and the five territories, the omnibus bill also calls for the removal of the motto “IN G-D WE TRUST” from the edge to the front of both the Presidential Dollars and the updated Sacagawea Dollars (Native American $1 Coin Act). Section 623 of House Report 110-497 (H.R.2764) changes Title 31 of the US Code Section 5112(n)(2) (31 USC §5112(n)(2)) to alter the Presidential Dollars and 31 USC §5112(r)(2) for the updated Sac Dollars.
According to the bill, “The change required by the amendments made by subsections (a) and (b) shall be put into effect by the Secretary of the Treasury as soon as is practicable after the date of enactment of this Act.” Considering the bill has yet to be signed (as of 12/21), it might be too late for the James Monroe dollars. However, there may be enough time to “fix” the John Quincy Adams dollars.
From what could be found, it appears that the measure was inserted by a Republican member (at this time rumored to be Sen. Sam Brownback (R-KS)) upset over what was called “G-Dless dollars” caused by edge lettering errors. When the edge letter errors first occurred, the uninformed and easily aroused were told that the US Mint removed the motto from the coins on purpose. Conspiracy theorist, anti-government critics, and the religious right became enraged over a mistake. Since then, bills have been introduced in the House and Senate to move the motto to the obverse of the coin. None have had hearings in either house.
I do not like the reason why this was done. Religion is a matter for the clergy and not congress. ALL religions should be respected and not a matter of legislation. Religion is personal and should not be legislated. Yet some members of congress feel they have to proselytize as they legislate. Arrogant members of congress are forcing their religious convictions on the public through our money. I feel is a violation of the First Amendment: Congress shall make NO LAW respecting an establishment of religion, or prohibiting the free exercise thereof. I know the courts do not agree with me, but I feel they are very wrong!
My feeling regarding the use of this motto on coins was best expressed by President Theodore Roosevelt:
My own feeling in the matter is due to my very firm conviction that to put such a motto on coins, or to use it in any kindred manner, not only does no good but does positive harm, and is in effect irreverence, which comes dangerously close to sacrilege… it seems to me eminently unwise to cheapen such a motto by use on coins, just as it would be to cheapen it by use on postage stamps, or in advertisements.
This provision is buried in a large piece of legislation that is critical to the operations of the government. It was done in a manner that prevented discussion and debate by spineless politicians looking to curry favor with their ignorant constituents. Unfortunately, those of us who like the move for its numismatic design value will have to put up with congressional ineptitude.
Dec 22, 2007 | coins, legislative, state quarters
Buried in the omnibus budget act that congress passed last Tuesday was a provision to extend the 50 State Quarters Program to include the District of Columbia and the territories of the Commonwealth of Puerto Rico, Guam, American Samoa, the United States Virgin Islands, and the Commonwealth of the Northern Mariana Islands.
Since 2000, District of Columbia Delegate Eleanor Holmes Norton introduced bills trying to include DC and the territories with the 50 State Quarters Program. For the 110th session, Del. Norton introduced H.R.392, which had passed the House and was sitting in the Senate Committee on Banking, Housing, and Urban Affairs. The bill has been sitting in committee with no action since last January.
Enter Rep. José Serrano (D-NY). Serrano is a native Puerto Rican representing the south Bronx and is chairman of the House Appropriations Subcommittee on Financial Services whose jurisdiction is the Department of the Treasury. This gave him the power to insert the measure into this bill which he announced with great fanfare.
According to this article at washingtonpost.com, advocates of DC home rule are in favor of this measure. Now it is time to see how the District handles the design and what they come up with. Considering the dysfunction of the DC government, this should be an interesting exercise.
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