Top 10 Stories of 2019 included major change to silver coins
- Published: Jan 10, 2020, 12 PM
One of the Top Stories of 2019 may have been a little unreported, given that it involves a change to U.S. coinage that was more than 180 years in the making.
Second of two parts
As reported last week in the first part of our coverage of the Top 10 Stories of 2019, many of the themes involved the United States Mint; last week’s coverage focused on “special” coins issued by the Mint that incited both excitement and, in some cases, disappointment and anger.
The focus of this week’s continuing coverage changes a bit, while U.S. Mint coinage is again the focus of many of the remaining articles.
Goodbye to 90% silver
In 2019, coins that were traditionally made of .900 fine silver — commemorative coins and coins in annual Proof sets — were converted to a .999 fineness. This was a major change that ended more than 180 years of tradition.
In 1837, a change in U.S. coinage law tweaked the composition of silver coinage from 89.24 percent silver and 10.76 percent copper to 90 percent silver and 10 percent copper.
The original .8924 fine silver requirement dated to the original Mint Act of April 2, 1792. The reasons this fineness was selected rather than something less convoluted to calculate are too detailed to address here, and it was not easy to achieve; its replacement with .900 fine silver was welcomed 45 years later by Mint officials as being easier to create during the refining process.
From 1837 to the mid-1960s, most U.S. silver coins were of .900 fineness. A few outliers exist: the 1851 to 1853 3-cent coins were made .750 fine silver, with the .900 fineness adopted for the denomination in 1854; and the Wartime Alloy 5-cent coins of 1942 to 1945 contained 35 percent silver.
In the mid-1960s, silver became too expensive to use in coinage, with intrinsic worth eventually exceeding the face values of the coins that contained it. The Coinage Act of 1965 removed all silver from the dime and quarter dollar, and reduced the half dollar’s silver content (it became .400 fine) from 1965 to 1970, when it, too, lost its entire silver content. When special silver coins were issued at collector premiums for the Bicentennial, they were of the same clad composition as the 1965–1970 half dollars, with a .400 fineness. At that point, it seemed that .900 fine silver was gone for good. And when American Eagle silver bullion coins were introduced in 1986, they were made of .999 fine silver, the first U.S. coins made of pure silver
However, in the early 1990s, Congress resurrected the 90 percent alloy, requiring that the Mint issue an annual Proof set containing dimes, quarter dollars and half dollars made of the traditional alloy. The first Silver Proof sets were issued in 1992 and they have become a staple product ever since, both full annual Silver Proof sets and quarter dollar Silver Proof sets.
Just one problem. The 90 percent silver, 10 percent copper alloy used for the coins in these sets is nonstandard, meaning that every purchase of planchets by the Mint from a vendor represented a custom order. Most modern silver coins issued by world mints are made of pure silver (.999 fine or .9999 fine), making refining easy since just about every mint used the same fineness.
A few years ago, U.S. Mint officials persuaded Congress to authorize a change in the law, to no longer require .900 fine silver for annual sets and commemorative coinage. Legislation for commemorative programs began to restate specifications, with silver coins to “contain not less than 90-percent silver,” a phrase that gave Mint officials authority to switch to pure silver coinage when it could.
That overall change happened in 2019.
The 2018 commemorative coins and annual Proof set coins were composed of the traditional 90 percent silver; the same coins in 2019 were converted to the .999 fineness.
From this point forward, it is likely that commemorative and annual set silver coins will be made of pure silver rather than the once-traditional alloy — a huge change for U.S. coinage.
American Eagle redesign
Another of the year’s top stories does not involve something that was implemented during 2019 but something that was announced — a redesign of the reverses of the American Eagle silver and gold bullion coins to take effect in 2021.
Since 1986, the designs of the American Eagle silver and gold coins have been unchanged except for some minor tweaks. However, that is going to change in 2021 when the reverses of the two coins are scheduled to get new designs. The driver of this decision is a desire to combat the counterfeiting of the two coins.
As Coin World reported in October 2019, “The U.S. Mint is moving ahead with plans to redesign the reverses of the silver and gold American Eagles for 2021 to accommodate the use of anti-counterfeiting technology at the production stage.”
Treasury Secretary Steven Mnuchin gave the Mint the green light to replace the designs.
In an announcement, Todd Martin, acting chief for the Mint’s Office of Corporate Communications, said: “We are planning a redesign of the American Eagle Silver and Gold coins in honor of the 35th anniversary of the American Eagle program. The details of this redesign will be announced in the near future. There is currently no plan to redesign the American Eagle platinum or palladium coins.”
“Since the early days of the Republic, the Mint has been very sensitive to the threat of counterfeiting,” Martin said. “We have made progress in developing state-of-the-art anti-counterfeiting measures for bullion coins, and are prepared to implement changes that will enhance the security of the gold and silver bullion coin program.”
Martin said Mint Director David J. Ryder “has assembled an anti-counterfeiting interdisciplinary team within the Mint that is researching and reviewing both overt and covert options to enhance the protection of our bullion products. In addition to improving anti-counterfeiting measures, we are reaching out to educate and inform the numismatic community and consumers about potential counterfeits, thus ensuring continued confidence in our bullion products for years to come.”
Expect this story to vault to the top of the list for 2021, when the new designs are introduced.
Current law restricts U.S. commemorative coin programs to no more than two per year, a restriction imposed in 1996 at the urging of the collecting community, which was becoming concerned about the increasing number of commemorative coin programs per year. Since the enactment of that restriction, several dozen commemorative coin bills have been enacted, with dozens more bills failing to gain congressional approval.
In 2019, however, U.S. Mint officials showed a willingness to circumvent Congress by using its broad authority to issue gold coins and silver and bronze medals on themes of its own choosing. That authority in the past resulted in such gold coin programs as the American Liberty $100 coin and the 2016 tribute versions of the Winged Liberty Head dime, Standing Liberty quarter dollar, and Walking Liberty half dollar, and various silver medals.
In 2019, Mint officials announced two forthcoming programs (neither of which has actually been introduced) for gold coins and silver medals bearing themes of failed commemorative coin legislation.
The Mint will issue a 2020 gold $10 coin commemorating the 400th anniversary of the Pilgrims’ voyage aboard the Mayflower, officials announced in April 2019. Commemorative coin legislation seeking Mayflower coins failed to win passage, which in the past would have meant that the idea was dead. However, the Mint has decided to issue a coin that they adamantly say is not a commemorative, even though it will be issued in a commemorative year.
Late in 2019, Mint officials announced a second program, this one celebrating the 75th anniversary of the end of World War II in 2020 — also the subject of failed commemorative coin legislation (three coins were sought). This second 2020 program will consist of a gold coin and silver and bronze medals marking the 75th anniversary of the end of World War II.
The proposals are generating some controversy, including with Mint customers already unhappy with the growing number of coins, medals and sets offered. Coin World editorialized against the Mayflower program when it was announced, and a number of readers voiced agreement.
If these two 2020 “noncommemorative coin” programs find success, this approach could become a common practice at the Mint as it seeks to expand its products lineup.
2021 silver dollars
For collectors, one of the most exciting announcements for 2019 was the U.S. Mint’s proposal to strike commemorative 2021 Morgan silver dollars and Peace dollars to mark the centennial of the end of production for the former and the beginning of production for the latter. The Mint even proposed to take a coining press to the former Carson City Mint (now the Nevada State Museum) to strike 2021-CC Morgan dollars.
Doing all of this, however, requires congressional approval.
While Mint officials have broad authority to strike gold coins without congressional authorization (as long as they are “noncommemorative”), they have no such authority for silver coinage. Furthermore, authority for true commemorative coins lies strictly with Congress.
Legislation currently sits in Congress seeking such a program. H.R. 3757, the 1921 Silver Dollar Commemorative Coin Act, was introduced in the House of Representatives on July 15 by Rep. Emanuel Cleaver, D-Mo. Specifically, it calls for “not more than a total of 500,000 $1 coins in commemoration of the Morgan dollar and the Peace dollar.” Additionally, the bill includes a provision granting the Mint authority to strike the coins at the former Carson City Mint.
Overall, the collecting community has shown broad support for the proposal. Morgan dollars are among the most popular of U.S. coins with collectors, with Peace dollars also popular. The possibility of a 2021-CC Morgan dollar — Carson City Mint coins are a popular subset of U.S. coinage — has generated a lot of buzz.
The American Numismatic Association, the nation’s largest coin collecting organization, has thrown its support behind the 2021 dollar legislation.
However, the legislation has gained little support where it matters — in Congress. As of Jan. 7, the legislation has just 25 co-sponsors, a number well short of a majority in the House. That suggests that barring a change of heart, the possibility of passage is slim.
As Coin World reported Nov. 1, “With proposed legislation seeking commemorative Morgan and Peace silver dollars for 2021 languishing in Congress, the U.S. Mint is looking at a possible alternative: a 2021-CC Morgan gold dollar. U.S. Mint Director David J. Ryder made that announcement during the fourth Annual Numismatic Forum held Oct. 24 and 25 in Philadelphia.”
The idea of a gold version of the Morgan dollar is not gaining much support among collectors, if reader comments are representative, both because of the potential cost of the coin and the fact that such a coin would be made of a nontraditional composition.
A successful push to find congressional support for the legislation would make this theme likely one of 2020’s top stories.
Wild price for common coin
As in recent years, 2019 witnessed high auction results for high-grade examples of common coins. For example, a 1963 Franklin half dollar graded Mint State 66+ full bell lines by Professional Coin Grading Service sold for $85,187.50 in a June 27 auction by Legend Rare Coin Auctions.
However, the biggest result might have been the record $364,250 that was paid for a common 1938-S Winged Liberty Head dime.
The colorfully toned and well-preserved 1938-S Winged Liberty Head dime was sold at Legend’s June 27 Regency 33 auction in Las Vegas. The dime was graded Mint State 68+ full bands by PCGS and carries a green Certified Acceptance Corp. sticker. As Coin World reported July 2, “the price soared past the $10,000 to $12,500 estimate set by the auctioneer for the finest-certified example.”
In his Market Analysis column, Steve Roach wrote, “The six-figure price easily surpassed the prior record for the issue, set at a 2009 Heritage auction for one graded PCGS MS-68 full bands that, in contrast to Legend’s offering, was entirely silver-white without a bit of toning.”
What made the result remarkable is the fact that the 1938-S Winged Liberty Head dime is unremarkable as an issue, with a substantial mintage of 8,090,000.
PCGS has graded 175 in MS-67 full bands, and these bring around $600 at auction. “The record price set on June 27 reflects the recent surge in the market for beautifully toned, top-graded mid-20th-century issues,” Roach wrote.
Prison sentences in the UK
Our last choice for one of the year’s top articles arose in the United Kingdom, and garnered attention not only in the numismatic media but also in the general media. Reaction in the United States also illustrated a level of disgust for the UK’s handling of a case involving the discovery of a treasure hoard of coins and jewelry.
John Andrew, Coin World’s London correspondent, reported late in the year on the trial for four UK residents who discovered a treasure hoard while metal detecting.
UK law requires treasure finds to be reported to authorities. Experts examine the finds to determine whether they are culturally or historically significant; if the finds are, then museums are offered the opportunity to purchase the finds, including coins, with the money distributed to the finders and the owner of the lands on which the finds were made. If the finds are judged to be not significant, they are returned to the finders who then are permitted to sell them privately, keeping the rewards.
In short, UK law rewards treasure finders for reporting their finds while at the same time ensuring that important finds are preserved and are studied by experts.
In the case under discussion, Andrew reports that four men were “convicted in court of failing to abide by UK law after they did not declare their discovery of a Viking Age hoard of some 300 coins and assorted jewelry. Three have been sentenced to prison terms and the fourth awaits sentencing.”
The coins were discovered in June 2015, but the finders did not report them as required under law. Instead, they tried to sell them privately (a large portion of the find is missing). Some third parties in the numismatic community who were shown the coins tried to persuade the finders to report their discovery, but that advice was ignored.
The four men were arrested in 2015 after authorities were contacted by numismatists shown the coins. The trial was not held until 2019. All four defendants were found guilty on Nov. 21, 2019.
Had the finders followed the law and all of the coins were recovered and sold legally, they could have reaped a fortune. Andrew wrote, “Prior to the trial, experts estimated the value of the discovery at £2.9 million, which is possibly on the conservative side.”
Instead, the men face prison sentences of five to 10 years.
Some collectors in the United States were outraged at the lengths of the prison sentences and at the very concept that found treasure should be turned over to the government rather than be kept under the rule of “finders keepers,” as in the case of the famed Saddle Ridge Hoard of 1,427 gold coins uncovered in California’s Sierra Nevada gold country in 2013. The finders were able to keep the coins without interference and sold them at auction, profiting from their luck.
Many other articles published in 2019 could have made our Top 10 list, but the stories reported last issue in part one and this week in the concluding article were among those generating the biggest buzz or carrying the greatest potential for major effect on the numismatic community in the future.
What will 2020 bring?
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