Striking problems plague First Spouse coins

Cause of delays in releasing all 2012 gold issues
Published : 08/13/12
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All four Proof and Uncirculated 2012 First Spouse half-ounce gold $10 coins will be struck and issued before the end of the calendar year, though not until production problems are remedied.

U.S. Mint Deputy Director Richard A. Peterson told Coin World during an Aug. 7 interview that trial strikes have been conducted at the Philadelphia Mint for all four of the 2012 First Spouse .9999 fine gold coins. The coins bear designs for Alice Paul, Frances Cleveland (first and second terms) and Caroline Harrison.

Peterson discussed a range of topics during the interview.

Once problems have been rectified and final trial strikes approved, the First Spouse coins will be struck at the West Point Mint and bear the W Mint mark.

Peterson said the primary striking problems have been encountered with the Paul and Cleveland (first term) coins; the Mint has had difficulty in achieving proper metal flow to fill design devices and achieve proper surface finish quality.

Philadelphia Mint production personnel are adjusting striking pressure on the coinage presses to rectify the fill issues and to avoid creating what Peterson referred to as a “halo effect” around the devices.

Peterson said the West Point Mint has plenty of production capacity to strike all four coins in Proof and Uncirculated versions once the production problems have been cleared.

Normally, by this time of year, the U.S. Mint would have already issued three of the four First Spouse coins, Peterson said.

No timetable for the 2012 releases has been announced.

Research and development

Peterson also discussed ongoing research at the U.S. Mint.

The Mint’s contractor, Concurrent Technologies Corp., is still overseeing extensive research and development into alternative coinage metals or alloys for circulating coinage, according to Peterson. The Mint is nearing the end of a congressionally mandated study, with the findings to be forwarded to Congress by mid-December.

The Mint’s three current suppliers of coinage metals, and an undisclosed number of potential vendors, have submitted planchets for consideration. Jarden Zinc Products, Greeneville, Tenn., currently provides ready to strike cent planchets; and Olin Brass, East Alton, Ill., and PMX Industries, Cedar Rapids, Iowa, provide coinage strip for the remaining denominations.

Peterson said the Philadelphia Mint has used the submitted planchets to conduct two rounds of trial strikes. The testing is addressing diameter, weight, color, hardness, ductility, and other factors affecting coinability including metal flow, striking pressure, wear, corrosion and color retention. The vendors selected must be capable of supplying the Mint with sufficient planchets for each denomination for which they have been selected.

During an Aug. 7 coin forum, numismatist Q. David Bowers recommended the trial strikes be presented to the National Numismatic Collection at the Smithsonian Institution’s Museum of American History to preserve them, instead of the Mint having them melted.

The alternative coinage metals research is being conducted under provisions of the Coin Modernization, Oversight and Continuity Act of 2010, Public Law 111-302. The findings of the research and development must be submitted to Congress by Dec. 14, with subsequent review and analysis reports every two years thereafter.

Before the initial report is submitted to Congress, it must be vetted by the Treasury Department, Treasury secretary and the Office of Management and Budget.

The nature of metals limits the Mint’s choices of coinage metals. Peterson said that, of the metals on the elemental chart, half are radioactive and most of the remainder are in insufficient supply. Only aluminum, zinc, steel and lead are left, and lead is not being considered, Peterson said.

Steel-based alternatives have been suggested, based on testimony presented during an April 17, 2012, hearing before the House Subcommittee on Domestic Monetary Policy & Technology.

So far, trial strikes are limited to low production runs, but quantities will need to be in the millions with a supply chain of planchets ample to support circulation demand, Peterson said. Peterson expects the initial draft to be readied sometime after Labor Day.

Order management system

Peterson said Mint officials are continuing to consider what direction to pursue in revamping the current order management system or whether to construct a completely new one.

Peterson recently suspended a multimillion dollar contract with British-based Venda, not because of any problems with the vendor, but to determine whether revamping an old system, as was being planned, was the right way to go.

Peterson said the consulting firm the Mint subsequently hired in the interim, MITRE Corp., has concluded the Mint’s current system remains prone to complete failure if overloaded.

Much of the hardware driving the current computerized OMS is no longer being supported by the manufacturers. The system is able to handle a maximum of only 5,000 orders per hour combined: that is, orders placed through and by telephone through the U.S. Mint’s order fulfillment contractor, Pitney-Bowes Government Solutions in Plainfield, Ind. The contractor’s telephone operators enter phone orders into the same system that customers use when directly ordering the coins through the Mint website.

Peterson said that when order entries exceed 5,000 per hour, the system can become inoperable or perform erratically.

During the Oct. 27, 2011, sellout of the 100,000 five coin 2011 American Eagle 25th Anniversary sets, the OMS became overloaded, and many orders were randomly canceled.

“That’s an ugly problem, but we live with it,” Peterson said. “We don’t want to do that to our customers.”

With the two-coin 2012-S American Eagle San Francisco Two-Coin set, the Mint sold the coins between noon June 7 and 5 p.m. July 5 without mintage limits.

MITRE Corp. recommends the Mint stockpile all of the secondary market hardware parts it can obtain. Peterson said the consultant also has recommended data compression to reduce the size of computer files that could affect the OMS’s efficiency and prevent overloads. ■

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