Louis Golino is an independent numismatic writer and a recognized expert on modern coins, writes a weekly column for CoinWeek.com, is contributor to The Numismatist and American Hard Assets magazines, and is a founding member of ModernCoins.com Forum.
The U.S. Mint, unlike other world mints, is not run solely as a business. It uses profits from the sale of numismatic and bullion coins so it can be self-sustaining and reduce the national debt, but it also has the mission of distributing its numismatic products as equitably as possible. That is why when a major new issue is released, such as the John F. Kennedy 50th Anniversary gold half dollars that were launched on Aug. 5, it does not separate retail and wholesale sales.
But the Mint’s policy over the past year of launching its highest-profile coins at major coin shows has become little more than a vehicle for dealers and speculators to cash in on first day of issue releases. At each of these events certain large, well-known dealers reportedly bused in hundreds of buyers, including most recently veterans, homeless people, students and others, who were paid to purchase coins on their behalf, making it that much harder for the average buyer to purchase a coin.
And the potential to profit off first day release coins led to such a frenzy when the gold Kennedy coins were released that it produced some ugly scenes, as throngs of people rushed to get in line at the Mint’s retail facilities in Washington, D.C., Denver, and Philadelphia, trampling people in the process and creating security concerns for other buyers and the Mint’s employees.
The Mint’s spokesman, Michael White, was quoted in media reports saying the shill buyer process cannot be stopped because it is not illegal, which is of course true. But is it really in the Mint’s interests, especially in terms of the image it projects to collectors, not to take some prudent steps to change this process after the events surrounding the Kennedy gold coin release?
From the Mint’s perspective, these sales at shows have been a success, according to Deputy Director Richard Peterson, who said in Rosemont on Aug. 7 that the Mint will do this again next year with another new release. But what broader purpose do these show releases really serve? The vast majority of people at all locations appeared not to be collectors, and they are not people who will become collectors, in most cases. Moreover, it is not as if the Mint really needs the extra publicity from show releases, as most collectors were well aware of the launch of the gold JFK coins. In addition, dealers have told me that these Mint show releases draw much of the energy at coin shows away from the bourse and other show activities.
If the Mint is going to continue doing show releases, as it plans to, I would suggest some changes to the process.
First, why not require that all buyers have a Mint account, and have them provide identification?
I realize this would slow the process down, and it would certainly not eliminate use of stand-in buyers, but it would probably reduce some of the hysteria and frenzy that got out of control with the gold Kennedy half dollar release.
Second, it is hard to stop people from lining up the night before, so sufficient security must be provided for those waiting in line. And try to anticipate demand better, as most collectors I know expected a circus to develop that week, yet the Mint seemed unprepared.