US Coins

1974-D aluminum cent returns to US Mint

The only known example of the 1974-D Lincoln aluminum cent has been returned to the U.S. Mint, settling a dispute between two men and the Mint. 

Tom Jurkowsky, the U.S. Mint’s director of corporate communications, told Coin World March 18 that Bill Bailey, assistant chief of police of the U.S. Mint, and U.S. Mint Chief Counsel Jean Gentry took possession of the 1974-D aluminum cent on March 17 in San Diego. Jurkowsky said Treasury and U.S. Mint officials will confer on plans to publicly display the piece. Jurkowsky did not disclose where the 1974-D aluminum cent will be stored in the meantime.

“Regarding where it is going, we are first going to authenticate the piece,” Jurkowsky told Coin World. “For security reasons, we would prefer not to say where that will take place. We will then decide where the piece will reside.” 

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Before being taken into custody by U.S. Mint officials, the 1974-D aluminum cent was cracked out of its Professional Coin Grading Service Secure holder where it was graded Mint State 63.

Using a pair of nippers, Michael McConnell, owner of La Jolla Coin Shop in La Jolla, Calif., who was one of the two private claimants to the coin, broke the seal on the grading service holder and carefully removed the aluminum cent in its rubberized ring so as not to damage the cent.

McConnell then removed the ring and placed the coin into another plastic capsule before the cent was eventually turned over to authorities at the federal building in San Diego.

The cracking out of the aluminum cent from its PCGS entombment and transfer to another coin capsule was captured by television cameras from stations in San Diego.

McConnell has kept the cracked holder with the grading label insert still inside as a souvenir of the experience. McConnell said it cost him $2,000 to have the aluminum piece authenticated, graded and encapsulated by PCGS.

PCGS officials have not disclosed whether certification of the 1974-D aluminum cent will remain in the PCGS Population Report since the aluminum piece is no longer encapsulated in a PCGS holder.

Armen Vartian — the California attorney who represented McConnell and Randall Lawrence, son of Deputy Denver Mint Superintendent Harry Lawrence, who reportedly received the aluminum cent as a retirement gift in 1980 — said March 22 that McConnell’s retention of the holder and grading insert was stipulated as one of the conditions for the cent being returned to the Mint to settle any ownership claims.

PCGS certified the piece in early December 2013 and noted that its weight of 0.93 gram was the same as the Albert P. Toven example of the 1974 Lincoln aluminum cent, which surfaced in 2005. That cent remains in private hands. Tom Jurkowsky of the Mint said March 22 that if the Mint were to receive details about that coin’s whereabouts, the Mint would seek its return as well.

After the settlement, Rhett Jeppson, United States Mint principal deputy director, said, “The Mint is very pleased with the agreement, and we are very grateful to the U.S. Attorney’s Office in San Diego for its work and efforts in reaching this resolution. We look forward to displaying the coin appropriately as an important Mint heritage asset.” He added, “This agreement is not only good for the integrity of the coin collecting hobby but for the integrity of the government property and rule of law.”

Set to star at auction

The cent came to public view after Randall Lawrence sold to McConnell, for $300, a small bag of coins that his father had collected that included the aluminum cent. Once McConnell determined the status of the aluminum strike, he and Randall Lawrence became partners in the disposition of the aluminum cent.

McConnell and Randall Lawrence filed a federal lawsuit against the U.S. Mint to establish ownership rights to the aluminum cent. Randall Lawrence had allegedly inherited the piece from his father and sold the piece to McConnell in September 2013.

It was set to be a highlight of Heritage’s April 24, 2014, Central States Numismatic Society Platinum Night auction where it was estimated to sell in the neighborhood of $250,000. In a March 17 press release, the U.S. Attorney’s office for the Southern District of California in San Diego wrote, “Mr. Lawrence and Mr. McConnell claimed that there were estimates that the piece might fetch upwards of $2 million at auction.”

McConnell had hoped to use his share of the auction proceeds to help the homeless in San Diego and elsewhere. While there will be no auction proceeds, McConnell said his drive to continue to help the plight of the homeless has not been dampened.

At the time of Heritage’s sale planning, Heritage’s executive vice president Todd Imhof said that Heritage was provided legal advice that the 1974-D aluminum cent was legal to own and as such, could be sold at auction.

The Mint sent separate letters to Lawrence and McConnell on Feb. 26, 2014, demanding the return of the piece, and the Mint sent a letter to Heritage requesting removal of the piece from auction.

Lawrence and McConnell responded on March 17, 2014, by filing a federal lawsuit, asking the court to declare that they were the rightful owners of the piece. The U.S. Mint argued that it was the owner because there was no authorization for striking 1974-D aluminum cents at the Denver Mint and since federal employees are not permitted to remove federal property without proper authorization, the piece always has been and remains federal property.

Government officials have argued that such property is considered chattel — pieces of metal struck with coinage dies, but never officially monetized as coins.

Heritage officials withdrew the 1974-D aluminum cent from the auction and held it until the case was settled.

“When the dispute over ownership arose, the consignor and the U.S. government jointly entrusted the coin to Heritage for safe keeping until there was a resolution,” Heritage Co-Chairman James Halperin said March 18, 2016. “Once the case was settled, we promptly returned the coin as agreed and directed by both sides.”

Heritage flew representatives to California to hand-deliver the aluminum cent to McConnell and Lawrence, McConnell said.

Ownership issues

U.S. Department of the Treasury, U.S. Mint, and the United States of America, together filed a motion to dismiss the March 17 complaint on June 3, 2014, stating that the two men had not shown “any scenario under which they could plausibly be in lawful possession of the piece: that the piece was lawfully issued as legal tender, lawfully issued or offered for sale to the public as a numismatic item, or otherwise lawfully removed from the Government.”

In its motion the Mint acknowledged that the Mint and the Treasury had proposed and supported a bill in 1974 to change the composition of the 1-cent coin from predominantly copper to aluminum. That legislation did not become law.

The motion concluded that the piece (as distinguished from a legally issued coin) described as a “?‘1974-D Aluminum Cent’ is an unauthorized, unissued piece” struck at the Denver Mint, but unlawfully removed from the facility. 

The court granted the government’s motion to dismiss the complaint on July 23, 2014, concluding that the two men did not allege sufficient facts to support a legal conclusion that they were owners of the cent and that they had the right to sell that coin at a public auction. 

The men filed an amended complaint on Dec. 12, 2014, and on Dec. 24, 2014, the government filed a motion to dismiss this complaint.

On March 26, 2015, a federal judge denied the Mint’s motion for summary judgment, which would have allowed the court to dismiss the amended complaint. Judge William Q. Hayes wrote, “It is plausible that a Mint official, with proper authority and in an authorized manner, allowed Harry Lawrence to keep the 1974-D aluminum cent. Drawing reasonable inferences, it is plausible that Harry Lawrence lawfully obtained possession of the aluminum cent, giving Plaintiffs superior claim of title to the aluminum cent.”

Chain of evidence

Both sides acknowledge that there are no Mint records and no documentary evidence of aluminum Lincoln cents struck at the Denver Mint in 1974. An extensive search of U.S. Mint records — at Coin World’s request — revealed no documentation on the striking of aluminum cents at the Denver Mint, although a Denver Mint worker recalls striking them. Benito Martinez, a die setter at the Denver Mint in 1974, recalled striking fewer than a dozen of the experimental 1974-D Lincoln cents on aluminum blanks. More than 1.5 million 1974 Lincoln aluminum cents were struck at the Philadelphia Mint, although nearly all were destroyed but for the Toven example and another in the collection of the Smithsonian Institution, plus an unknown number that might still be at large.

Examples were distributed to members of Congress during hearings on authorizing the coins, which were later requested to be returned, though not all were

The Mint characterized as “murky” the circumstances by which Lawrence’s father came to possess the piece, since the elder Lawrence was not present at the Denver Mint when it was struck, concluding that the two men “have not asserted any facts that would support any scenario under which they could plausibly be in lawful possession of the piece: that the piece was lawfully issued as legal tender, lawfully issued or offered for sale to the public as a numismatic item, or otherwise lawfully removed from the Government.”

McConnell and Lawrence stated in their amended complaint that the Denver Mint celebrated Harry Lawrence’s retirement by giving him a clock engraved with his name, with the hours represented by examples of 90 percent silver coins struck at the Denver Mint. They added that the Mint commemorated his retirement by “allowing him to keep certain error coins struck in Denver which he had accumulated, and one specimen of the 1974-D aluminum cent.”

As part of the settlement, Lawrence and McConnell agree to end the litigation against the U.S. Mint, and have voluntarily relinquished all claims of ownership, legal title, or dominion over the 1974-D aluminum cent to the United States.

McConnell and Randall Lawrence reached agreement to settle the lawsuit and return the aluminum 1974-D cent to the U.S. Mint after they were presented by Vartian the testimony taken in a December 2015 deposition from Dr. Alan Goldman.

Goldman was the U.S. Mint official placed in charge of the experimentation of compositional alternatives to the copper alloy for the cent, including the striking of the pieces in aluminum. Goldman said in his sworn statement that there was no official authorization for the striking of any Lincoln cents on aluminum blanks in 1974. While there are no records to support or dispute his claim, production of the 1974-D aluminum cents was likely executed by a Denver Mint employee well-known to pull pranks.

That employee is deceased.

Goldman said in his testimony that he knew Harry Lawrence personally as a “straight shooter” who would not have executed such production without being given proper authorization from Mint headquarters.

Randall Lawrence said when he read Goldman’s remarks about his father Harry Lawrence’s unquestionable integrity, Randall Lawrence said that resolved his concern over his father’s name and legacy being besmirched.

Vartian said Dr. Goldman’s deposition established the circumstances of how the aluminum from which planchets were made got to Denver and 1974-D cents struck. It also established that Harry Lawrence was not linked to the production of the aluminum cents.

Vartian said Dr. Goldman’s deposition explains that aluminum strip was shipped from the Philadelphia Mint to the Denver Mint with instructions to produce planchets using equipment at the Denver facility.

The aluminum planchets fabricated in Denver were to be returned to the Philadelphia Mint for production testing using 1974 cent dies, Vartian said.

An undisclosed number of aluminum cents using 1974 dies were struck at the Philadelphia Mint on planchets made in Denver, Vartian said. It is still not known why aluminum cents were struck using 1974-D Lincoln cent dies, Vartian said.

U.S. Attorney Laura E. Duffy said in the March 17, 2016, press release, “This result ends the litigation successfully and returns the subject piece to its rightful owner, the United States Mint. It also vindicates the Government’s position that items made at United States Mint facilities but not lawfully issued, or otherwise lawfully disposed of, remain Government property and are not souvenirs that government employees can merely remove and pass down to their heirs.”

Collector impact

Vartian had warned that a court ruling in favor of the government could have broad consequences. Vartian said, “There has never been the slightest suggestion that any 1974 aluminum cents were stolen from the Mint,” adding, “These pieces may not have been issued as money, but that ground for declaring coins illegal to own was rejected in the Langbord case.” 

The U.S. Mint responded to a Coin World inquiry on the piece in December 2013, stating, “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.”

The government characterized the Langbord case — which involves 10 1933 Saint-Gaudens gold $20 double eagles allegedly discovered more than a decade ago — as upholding the government’s “interest in coins that had been stolen or, through fraudulent breach of trust, taken from the United States Mint at Philadelphia over 75 years ago.”

In an amended complaint demanding a jury trial, Vartian argued that if the government was successful in claiming the piece, “the precedent would “place a cloud over all non-legal tender coins,” adding that the government has no compelling need to seize coins of unique and special value to collectors.”

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