PCGS authenticates 1974-D aluminum cent

Heritage to offer previously unknown coin in sale
By Paul Gilkes Coin World Staff
Published : 01/31/14
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An example of an aluminum 1974-D Lincoln experimental cent — not documented in U.S. Mint records to exist, but once owned by a former Denver Mint assistant superintendent — has been authenticated and graded by Professional Coin Grading Service as Mint State 63.
 
PCGS certified the piece in early December.
 
The experimental piece has been consigned to Heritage Auctions’ April 23 to 27 sale jointly by the son of the former Denver Mint executive and the California dealer to whom the son sold the coin before its true value was determined.
 
Randy Lawrence is the son of the late Harry Edmond Lawrence. After some 20 years in the Denver Mint facility, predominantly in the assistant superintendent’s position, H.E. Lawrence retired as assistant superintendent in 1980. He died the same year.
 
Michael McConnell, a coin dealer in La Jolla, Calif., purchased the 1974-D aluminum cent from Randy Lawrence along with some other coins his father had owned, in September 2013.
 
Heritage Auctions officials value the 1974-D aluminum cent in the neighborhood of $250,000, according to Todd Imhof, Heritage’s executive vice president.
 
Imhof said Heritage was provided legal advice that the aluminum cent is legal to own and as such, can be sold at auction.
 
The coin was scheduled to be publicly displayed Jan. 30 to Feb. 1 at the Long Beach Coin, Currency, Stamp & Sports Collectible Show in Long Beach, Calif.
 
While a search of U.S. Mint records by Mint officials provides no documentary evidence that any such experimental cents in aluminum were struck at the Denver Mint in 1974, Coin World was able to locate and interview the Denver Mint production employee who struck the experimental 1974-D Lincoln cents one at a time on aluminum planchets.
Coin World was already conducting research in preparation for publishing an article during the 40th anniversary year of the production of the 1974 aluminum cents when the announcement was made of the confirmed existence of a 1974-D strike in aluminum.
The U.S. Mint is known to have struck more than 1.5 million aluminum 1974 Lincoln cents at the Philadelphia Mint during research and development considering metallic alternatives to the 3.1-gram cent’s alloy of 95 percent copper and 5 percent zinc.
PCGS’s examination of the 1974-D aluminum cent during the authentication process determined it weighs 0.93 gram, the same weight as a 1974 aluminum cent certified by PCGS in 2005, two months after first being certified by Independent Coin Grading.
 
U.S. Mint records suggest as few as five to as many as 13 or 14 of the 1974 aluminum cents struck at the Philadelphia Mint remain extant.
 
The Philadelphia Mint aluminum cent initially graded About Uncirculated 58 in 2005 by ICG, but subsequently graded MS-62 by PCGS, is known as the Toven specimen.
 
Albert P. Toven was a U.S. Capitol police officer who reportedly picked up the 1974 aluminum cent in the basement of the Rayburn Office Building, after a congressman, rushing for a legislative vote for which he was late, dropped the coin. Toven tried to return the piece to the congressman, thinking it was a dime, but he was told to keep it.
 
Upon closer examination, Toven realized it was not a dime, but one of the experimental cents. Toven kept the piece, frequently retelling the story of how he came to own it and showing at every opportunity until it became part of the family’s history.
 
Toven died in 1999.
 
The Toven 1974 aluminum cent is still privately owned by the Toven family, who submitted the coin for certification first to ICG and later to PCGS.
 
Recent phone calls placed by Coin World to Toven family representatives were not returned.
 
Legal opinions
 
While there are a number of legal opinions within the private sector that the aluminum cents are legal to own because they were arguably legally released, U.S. Mint officials have a different slant on the issue.
 
In a Dec. 26, 2013, email to Coin World, Tom Jurkowsky, director of the U.S. Mint’s Office of Corporate Communications, responded, “Personally, I think it would be inappropriate to offer our opinion on the legality of possessing a 1974-D aluminum cent, since we have officially informed you that they were not minted in Denver.
 
“However, as a more general matter, I want to remind you that any item owned by the United States Government that was not properly disposed of in accordance with express lawful authority (which, for the United States Mint, would include any item or “piece” that was not lawfully issued as a coin or numismatic item) continues to be the property of the United States Government.”
 
Armen R. Vartian, a Manhattan Beach, Calif., attorney who writes the monthly Coin World column “Collectibles and Law” and is legal counsel for the Professional Numismatists Guild, was consulted by McConnell for advice on disposition of the 1974-D aluminum cent. Vartian said he recommended the piece first be submitted to PCGS for authentication, which submission Vartian said he arranged.
 
Vartian said his opinion on the legal status of the Toven 1974 aluminum cent that surfaced in 2005 has not changed, and that opinion applies to the legality of the private ownership of the recently surfaced 1974-D aluminum cent.
 
“There has never been the slightest suggestion that any 1974 aluminum cents were stolen from the Mint,” Vartian told Coin World. “These pieces may not have been issued as money, but that ground for declaring coins illegal to own was rejected in the Langbord case [involving the ownership of 10 1933 Saint-Gaudens gold $20 double eagles that publicly surfaced in 2004, and which were determined to be stolen government property in a 2011 federal court trial in Philadelphia]. 
 
“So we’re left with experimental strikes similar to the patterns which have sold in the marketplace without government interference for over a century, and which the Government in the case of the Toven specimen has not complained of despite ample publicity regarding its existence.”
 
In 2009, three years before the Langbord case involving ownership of the 10 1933 double eagles went to trial, the presiding judge rejected the government’s motion for summary judgment, “which had been predicated in part on the theory that no private person can legally own a 1933 $20 double eagle regardless of how he or she obtained it, because the coins were never issued as legal tender,” Vartian said.
 
Vartian said if the presiding judge “had accepted that non-issued coins were illegal to own,” he would not have ruled against the government on the motion for summary judgement.
 
“The government eventually stopped making that argument, and settled instead on trying to prove that the Langbord specimens didn’t leave the Mint legally,” Vartian said.
 
Connecticut attorney David M. Krassner believes it will likely take an act of Congress to define what is meant by “legally released” or “legally issued.”
 
Krassner’s Freedom of Information Act requests during the 1990s case involving the King Farouk I 1933 double eagle yielded documentation that 66 aluminum cents dated 1975 were also struck at the Philadelphia Mint.
 
The Mint has also confirmed that 1975 Lincoln bronze-clad steel cents were struck at the Philadelphia Mint during same 1970s round of testing. A small number of those survive in private hands as well.
 
“Four decades have passed since the minting and the indisputable ‘legal’ release of some of the experimental 1974 aluminum cents into the hands of certain public officials,” Krassner said. “Some of these legally struck aluminum cents were retrieved by the U.S. Mint, the U.S. Treasury Department and the U.S. Secret Service. Some are still unaccounted for.
 
“What makes the 1933 $20 and the 1974 aluminum cent situations extremely disconcerting, from both a legal or collector/investor perspective, is that the U.S. Mint was, and still is unable to define what ‘legally released’ means.
 
“Even after the passage of time and numerous court cases, the precise definition of ‘legally released’ has never been defined, drafted or even officially proposed. No list of prohibited or illegal coins exists.”
 
The U.S. Mint possesses no law enforcement powers and must defer to the Department of Justice, and U.S. Secret Service, should Mint officials consider the aluminum cents illegal to own.
 
Coin World contacted the U.S. Secret Service’s Office of Public Affairs several times seeking opinion on the legality of ownership of the aluminum cents and whether the Secret Service might seize the experimental pieces.
 
On Jan. 27, Special Agent George Ogilvie in Washington, D.C., headquarters declined comment on behalf of the bureau.
 
Coin World also contacted the Department of Justice headquarters in Washington, D.C., Jan. 27 seeking comment after announcement of the 1974-D aluminum cent was made.
 
DOJ spokesman Peter Carr declined comment the same day, referring Coin World back to the U.S. Mint and the Treasury Department’s Office of Inspector General.
 
As of Jan. 29, Coin World was still awaiting further legal opinion from the U.S. Mint’s chief counsel, Daniel P. Shaver, and Richard Delmar, the Treasury OIG’s chief counsel.
 
Imhof said Heritage officials consulted with Vartian and considered his opinion that the 1974-D aluminum cent is legal to own before proceeding with the announcement that the 1974-D aluminum cent will be offered at auction.
 
Imhof said Heritage officials are prepared to take whatever steps necessary should the government intervene in the sale of the 1974-D aluminum cent.
 
“If that were to happen, we would withdraw the coin from the auction and work with all parties to reach an amicable resolution,” Imhof said Jan. 27.
 
Denver Mint production
 
Coin World requested on Dec. 5, 2013, through Tom Jurkowsky, director of the U.S. Mint’s Office of Corporate Communications, a search of Mint archival records and heritage assets of documented Mint property to confirm the production of 1974-D aluminum cents and any extant pieces.
 
In a Dec. 26 email, Jurkowsky responded: “We have made an exhaustive search into your question about the 1974 Aluminum cent. This has included searches by our curator, historian, executive secretary and chief counsel. While we are aware that the United States Mint at Philadelphia struck production-volume quantities of aluminum one-cent pieces, we are not aware of, nor have any information on, the striking of such pieces at the United States Mint at Denver.”
 
Die setter’s recollections
 
Benito Martinez was a die setter in 1974 when the 1974-D aluminum cents were struck. Martinez retired from the Denver Mint in 1997.
 
Martinez said during his Jan. 20, 2014, telephone interview with Coin World that he recalls striking fewer than a dozen of the experimental 1974-D Lincoln cents on aluminum blanks that had been supplied from the Philadelphia Mint.
 
Martinez says he doesn’t recall the total number of aluminum planchets supplied to the Denver Mint from the Philadelphia facility nor whether all of the aluminum planchets supplied were struck using 1974-D Lincoln cent dies. Martinez says he doesn’t recollect if any unstruck aluminum planchets were left over.
 
Martinez said he oriented a single pair of 1974-D Lincoln cent dies, aligned to strike vertically, on a standard coinage press capable of being outfitted with two pairs of dies.
 
Harry Bobay, a Denver Mint production foreman who died in 1988, supplied the aluminum planchets to him one at a time, Martinez said, and Martinez individually hand fed the planchets between the coinage dies before engaging the striking cycle.
 
Martinez said that after each 1974-D experimental aluminum cent was struck, the struck piece was given to Bobay, who then provided another single unstruck planchet for Martinez to feed into the coinage press until they finished.
 
During normal operations, the press operated at a speed of 135 strokes per minute per pair of dies.
The blanks were upset before striking, meaning the planchets were run through an upset mill that formed a raised rim on the coin to contain metal flowing during striking.
 
The primary problem encountered with the aluminum cent strikes, Martinez said, was what is known as “finning.”
 
“Finning” results in high rims, from metal flowing into the minute gap between the outer edge of the coinage dies and the restraining edge collar.
 
Martinez said he doesn’t recall the specific striking tonnage used, but that it was the same as was used for striking circulation issue 1974-D copper cents.
 
After the 1974-D experimental aluminum cents were produced at the Denver Mint, all of the strikes were hand-delivered by Bobay to the Coining Division Office of the Denver Mint and forwarded to U.S. Mint headquarters in Washington, D.C.
 
Martinez said he does not know what happened to the aluminum 1974-D Lincoln cent experimental strikes after they were sent to Washington.
 
1974-D aluminum 1¢ surfaces
 
Randy Lawrence told Coin World Jan. 27 that, following his father’s death on June 26, 1980, coins his father had accumulated over the years at the Denver Mint, including error coins, passed to him. Harry Lawrence had stored the coins in a plastic sandwich bag, according to his son.
 
Randy Lawrence said he kept that coin-filled sandwich bag in a desk drawer for 33 years.
 
When Lawrence moved with his two children and elderly mother from Denver to Southern California last August for a job opportunity in real estate, that plastic sandwich bag went into the trunk of his car and remained there for a month.
 
By happenstance, while introducing himself to local businesses as a new addition to Berkshire Hathaway Home Services in La Jolla, Randy Lawrence said he was introduced to one of McConnell’s associates at the La Jolla Coin Shop, which McConnell owns. McConnell also owns and operates San Diego Coin and Bullion.
 
On a subsequent visit to the La Jolla Coin Shop, Lawrence met McConnell. Lawrence said he later made the decision to sell the coins his father left him to McConnell.
 
Initially, McConnell believed the 1974-D aluminum cent to be possibly a Lincoln cent struck on a foreign planchet, but he also considered the possibility it could be something else.
 
McConnell said he contacted Vartian, who suggested submitting the 1974-D cent to PCGS for authentication.
During the authentication process, PCGS consulted error coin specialist Fred Weinberg in Encino, Calif., for extensive details on the production of the 1974 aluminum cents, including their specifications.
 
The 1974-D aluminum cent McConnell submitted to PCGS  weighed the same 0.93 gram as the Toven specimen submitted to ICG and PCGS in 2005.
 
David Hall, president of PCGS’s parent firm, Collectors Universe, said that when the grading service was notified of the possibility of a genuine 1974-D aluminum cent, it was an exciting thought to ponder.
 
“Of course, when we were initially told about it then the next thought was: does it really exist?” Hall said. “We always have to figure out if the item involved is real. I knew this was an incredible story, and hoped with all my heart that the coin would really exist and that it would be genuine,” Hall said.
 
“When I later saw the coin in person I had a gut feeling it was, indeed, real. Our experts checked out the coin, and we were unanimous that it is absolutely genuine.”
 
McConnell said when the piece was returned to him by PCGS,  authenticated and graded as the first genuine 1974-D aluminum cent, he immediately telephoned Lawrence to tell him about it.
“I wouldn’t be able to sleep without notifying him,” McConnell said.
 
In more than 30 years as a professional dealer, “this is the single most significant coin I’ve handled,” McConnell said.
 
Lawrence said he admires McConnell for being an honest coin dealer and informing him of the coin’s identification and potential value.
 
McConnell and Lawrence agreed to an undisclosed split of the net proceeds from the scheduled April auction of the coin.
 
From the proceeds a “six-figure” donation will be made to aid the homeless in the San Diego area, according to McConnell and Lawrence.
 
Aluminum cent production
 
According to U.S. Mint records, in two production runs the Philadelphia Mint struck 1,571,167 aluminum cents, combined, dated 1974.
 
Between Oct. 17, 1973, and March 29, 1974, the mintage of aluminum cents totaled 1,441,039.
 
The facility struck the second run, another 130,128 of the experimental aluminum cents, between April 12, 1974, and May 30, 1974.
 
Audit records signed by William Humbert, who headed the U.S. Mint’s internal audit staff, note that all but 59 pieces from the first production run and all but 67 from the second were destroyed.
 
An undisclosed number of the pieces not destroyed were distributed to members of Congress and staff members, as well as other government officials as part of the Mint’s legislative efforts on Capitol Hill to gain passage of legal authority to strike the cents for circulation.
 
When U.S. Mint Director Mary Brooks requested the return of those distributed aluminum cents, not all were returned.
 
Over an 18-month period Humbert issued memos about the production and destruction records for the 1974 aluminum cents, and the number of extant pieces, according to Weinberg, fluctuated between five and 14.
 
The United States government closed its probe of any missing 1974 aluminum cents by February 1976, determining that there was “no evidence of criminal intent” by those in possession of any of the experimental pieces.
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1 comment
The 1974-D aluminum Lincoln cent, if authentic, was probably struck at the Philadelphia Mint because it produced all working dies for all mints at this time. The Philadelphia Mint probably had some extra 1974 Denver Lincoln dent dies in its inventory which were used to produce this experimental piece and possibly others.