Understanding the Gold Shortage at the US Mint

Last year, the US Mint has been under a lot of scrutiny for how they handled gold bullion sales. I tried to find any positive story for the US Mint’s handling of bullion coins. Regardless of the search string I fed into several search websites, I did not find any positive article. Even though the US Mint continues to have problems supplying bullion to the market, I began to wonder if there was a deeper reason that may explain the situation.

Starting with the hypothesis that the shortage of American Gold Eagle bullion coins was because of record high mintage demands, I started by collecting the mintage totals for all American Eagle bullion coins from the US Mint’s website. I am limiting my study to bullion coins because of the difference in striking, handling, and selling collectible versions. I am also not including Gold Buffaloes since they make up less than one-percent of the total number of gold coins produced by the US Mint.

The US Mint does not make downloading mintage data easy. While the numbers are nicely displayed on their website, they do not provide a way to easily import that number into a database or spreadsheet. Using my programming skills, I was able to download the HTML files and extract the numbers. It would be nice if the US Mint would provide a way to download the raw numbers.

Counting Gold Coins
In 27 years of production the US Mint produced over 28.4 million American Gold Eagle bullion coins using over 15.1 million ounces of gold. Over 12 million, or 42.5-percent of the production has been one-ounce coins while more than 10.8 million, or 38-percent are in tenth-ounce coins. Half and quarter-ounce coins combined make up less than 20-percent of the total production of American Gold Eagles. Figure 1 graphs the sales of American Gold Eagle coins.


As with most new coin series, the first year of issue started strong then trailed off the next few years. Our graph in Figure 1 shows that significant changes started in 1998 and continued until 2000. This was the time of the Internet boom when companies were spending money on technology related projects when budgets swelled in fear of the dreaded Y2K Bug. Technology company sprung up like weeds with no business plan, went public with initial public offerings whose prices prompted then Federal Reserve Chairman Alan Greespan to call the run up irrational exuberance, only to crash by 2001.

The economy began to slow after Y2K fizzled but not that slow as the technology industry focused on the potential Leap Day Bug. Usually, every 100 years there will be no leap day on the last year of a century except every 400 years and the last year of a millennium. The threat of the Leap Day Bug continued technology spending but at a slower pace. The economy showed tentative strength through the end of the quarter before showing a slowdown as technology spending slowed.

With all of the money entering the market, people were looking for areas for investment. Aside from the irrational exuberance, there were a significant number of investors looking to buy assets to hedge against potential tragedy. Since gold has always been a safe haven from potential disaster, the US Mint increased their production to meet the demand. From 1997 through 2000, the US Mint struck 10.9 million gold coins representing 5.16 million ounces of gold. Considering gold bullion coins are a generic investment, I thought it would be a good baseline to use the number of coins struck and the amount of gold used as a generic comparison from year to year. Figure 2 shows this comparative bullion production.


Graphs in Figures 1 and 2 illustrate that the US Mint produced a significant number of American Gold Eagle Bullion coins during the 1997-2000 economic run. At the time, the US Mint was under the leadership of Philip N. Diehl (1994-2000) and Jay Johnson (2000). Diehl and Johnson guided the US Mint in the production of 48-percent of all gold coins struck between 1986 and 2000. Although this does not take into consideration the total coin production at the US Mint, the time included the introduction of the 50 State Quarters program which caused a significant increase in the number of quarters produced.

Both graphs show an uptick in production for 2008 where the US Mint reports that they struck over 1.14 million gold coins using 788,500 ounces of gold. This is comparable to the 2000 American Gold Eagle bullion production. But the increase may tell another story. I wanted to figure out what was the difference in production from year to year to see what that says. Figure 3 shows the percent change from year to year.


In 2008, the US Mint produced over 400-percent more gold coins than in 2007 using 178-percent more gold. Since the start of the American Gold Eagle bullion program, there has never been this significant of a change from year to year. But this change was for the year. Was this a steady increase or was there a immediate demand?

Assessing the Demand
Market watchers were greeted on September 8, 2007 with an editorial from the Wall Street Journal saying that 2008 would bring a recession. Citing the credit crunch that began that past July, the editorial said that “tighter credit conditions mean that the drag on the U.S. economy will soon spread beyond the housing sector to affect consumption and investment decisions.” By January 2008, it was reported that Goldman Sachs said that they “[believe] the housing slump and recent credit market turmoil will spill over into the broader economy this year.”

As a result, the spot price of gold rose to over $830 in December 2007, and almost to $930 by the end of January 2008.

According to the US Mint, their best sales month in 2007 was January with sales of 1,650 coins representing 1,208 ounces of gold. As the economy began to turn, the US Mint saw sales increase from 100 coins in September to 1,000 coins in October, and 1,350 in November. There was only a modest increase in sales to 1,400 coins in December 2007 as the US Mint was gearing up for 2008 production.

In January 2008, they reported selling 26,000 coins representing 23,650 ounces of gold. In one month, the US Mint exceeded the sales of gold bullion for all of 2007! Figure 4 graphs the gold bullion production for both 2007 and 2008.


But was this a steady increase or was the growth really a surprise?

Although there were reports we were in a recession, the Dow Jones Industrial Average was still over 12,000 points and gold had a once-per-month spike around $940 per ounce before dropping to $840 with an over $1,000 per ounce spike in March. Sales of American Gold Eagles averaged around 33,000 coins leading up to the summer. Compared to other years, these statistics are unremarkable for the US Mint.

By August, gold dropped to $780 for a brief period and the DJIA dropped to 11,000 points while the financial industry was starting to show significant weakness. Investors started to run for cover in July causing an increase in sales of American Gold Eagles by over 200-percent and an additional 72-percent in August. The rush to buy bullion was too much for the US Mint to handle causing the Mint to suspend bullion sales in mid-August. In September, the markets began to decline, banks and investment houses began to fail, the term “bailout” became prominent in our vocabularies, and the rush for gold strengthened.

We were given our “no kidding” moment when the National Bureau of Economic Research issued a report in December declaring we were in a recession for all of 2008.

Reaching Capacity
In the US Mint’s 2008 Annual Report, they allege that “Production capacity and the volume of precious metal blanks our suppliers can timely provide limit the number of bullion products the United States Mint can produce and sell.” However, the US Mint also noted that there was a decline in the number of business strikes sold as well as a decline in numismatic sales, including the drop in sales of the First Spouse gold coins. There are reports noting even lower production of business strikes this year.

If the US Mint can be accused of modesty in any area it is their assessment of production capacity of bullion coins. According to reports, the US Mint knew that they were experiencing shortage of silver blanks as early as June. Apparently, the US Mint did not tell anyone that 2008 was their best sales year for American Silver Eagle bullion coins. In 2008, the US Mint struck over 20.5 million American Silver Eagle bullion coins. That is a 127-percent increase over 2007’s production and just under twice the previous record of 11.4 million coins in 1987. Figure 5 graphs the dramatic difference in silver production over that for gold.


With the exception of a brief dip in demand during February, production of American Silver Eagle bullion coins remained high as can be seen in Figure 6.


Although the US Mint does not advertise how many coins they can produce over any given period of time, it appears that a significant effort was placed into striking American Silver Eagles over their gold counterparts.

Why Silver Really is King
To understand why the US Mint prioritizes silver over gold is to dig into the how they operate, which is revealed in the 2008 Annual Report. Although the narrative in the report suggests that the net margin for gold is greater than silver, you have to dig deeper to understand the bigger picture.

According to 31 U.S.C. §5116 gold and silver purchased for coinage must be “mined from natural deposits in the United States, or in a territory or possession of the United States, within one year after the month in which the ore from which it is derived was mined.” Gold must be bought from the market at the “the average world price.” If the US Mint cannot purchase the necessary gold, “use gold from reserves held by the United States.” This means that in the event of a gold shortage, the US Mint can use the gold reserves held at Fort Knox to carry out the law.

Silver must also be purchase at the average costs on the world market. However, 31 U.S.C. §5111(b) allows the US Mint to maintain a Coinage Metal Fund to allow the Mint to “invest” in metals in order to maximize profits using dollar cost averaging.

In the FY2008 Annual Report, the US Mint discusses their “Hedging Fund” (Notes to Financial Statements Section 20. Hedging Program, p. 58) that it uses to trade silver shares with partners in order to raise additional capital. The report says that US Mint maintains custody of the silver while the trading occurs. This trading activity yielded $932,000 in profit for FY2008 and $1.3 million in FY2007.

There is no similar program for gold.

The silver trading program makes silver more profitable for the US Mint since they can make a profit by selling lease shares on their non-coinage inventory before making collecting the seigniorage when silver coins are sold.

But We Own A Lot of Gold
According the US Mint’s annual report, the United States is holding 245,262,897 ounces of gold at the United States Bullion Depository in Fort Knox, Kentucky. It has a statutory value of over $10.3 billion dollars (“42 and two-ninths dollars a fine troy ounce” according to 31 U.S.C. §5117(b)).

If there was a shortage of material and the law allows the US Mint to draw from deep storage to make up for the difference, then why did the Mint not withdraw gold to strike coins? Because 31 U.S.C. §5117(b) requires the transfer of gold to the Mint has to be approved by the Secretary of the Treasury, overseen by the Board of Governors of the Federal Reserve, and replaced at the statutory value of “42 and two-ninths dollars a fine troy ounce” when supplies become available. Given the current state of the market, the Mint would not be able to purchase gold for the statutory price $42.2222 fine troy ounce.

What Caused the Shortage
Evidence suggests that the higher demand for silver was a factor in the shortage. However, since the US Mint saw the demand for gold increase as the economy turned in December 2007, and since the US Mint does not keep a large working stock of gold, they were caught without the same safety net as they have with silver and was unable to catch up.

According to reports, the US Mint knew that they were experiencing shortages as early as June. By October, the US Mint announced a shortage of gold and platinum. With the prices rising and the worldwide demand increasing, the US Mint could not purchase enough material at market prices to meet the demand. In other words, the US Mint as unprepared for market demand.

Fixing the US Mint
In 1999, the US Mint announced that not only the Mint experienced increased demand for the American Gold Eagle but announced measures to ensure that the supply would keep up with the demand. In 2008, the US Mint did not adjust their business practices to keep up. Other than changing management at the US Mint, something must be done.

One idea is to change the law to allow the US Mint to have a Hedging Fund for gold. In this program, the US Mint would sell shares for gold in storage on the open market while holding on the physical metal. If the Mint could make an average of $1 million for silver, this would allow the US Mint to leverage stored gold in the same way they leverage stored silver.

In addition to creating a Hedging Fund for gold, the law should allow the US Mint to use the money earned in this program to purchase gold on the open market from any source in the event of a shortage, regardless of where mined. This will allow the US Mint to buy gold from any source to strike bullion coins and maintain their business.

I understand that there may be political implications for this proposal. But when the laws protecting US mining interests were first enacted in the 19th and early 20th centuries, the United States had an abundance of resources and congress passed laws to protect the mining companies, especially as consumer consumption saw a lot of metal leave our shores and not return. The market in the 21st century is more global and the amount of gold resources is not as it was in 1849. Precious metals are globally traded with markets centered in London or New York. It may be time to modernize the laws to allow the Mint to do its business without being held hostage to market forces.

Click on any graph to show larger versions.

What's With That 2010 Cent Design?

I was catching up on the news and found an article about the U.S. Commission of Fine Arts choice for the reverse of the 2010 Lincoln Cent. In a word, “ugh!”

According to Public Law 109-145 (GPO: [Text] [PDF]) it reads:

The design on the reverse of the 1-cent coins issued after December 31, 2009, shall bear an image emblematic of President Lincoln&rdqo;s preservation of the United States of America as a single and united country.

There are many ways to depict the US as a single and united country. But wheat sheafs bound together is such an esoteric design decision that the majority of the country will not understand. To make matters worse, the CFA recommended that the US Mint removes the words “ONE COUNTRY” and the “1 ¢” designation for the words “ONE CENT” across the reverse.

Even though I have not seen the other designs the CFA had to choose from, I would not think about bound wheat as a symbolism of a united country. The United States is no longer an agrarian society. We are bound together as a people with diverse cultures tied together by communications and commerce. Lincoln’s preservation of the union was the ideal that the strength of the many outweighed the differences we had.

The Citizens Coinage Advisory Committee will meet on Tuesday, April 28, 2009,at United States Mint Headquarters, 801 9th St. NW, Washington, D.C. 20220. CCAC meetings are open to the public and begin at 9:30 AM. I wonder if they take comments from the public?

Image courtesy of Numismaster.com and the US Mint.

Formative Years Cent Rolls Coming

The US Mint has announced that they will sell two-roll sets of the 2009 Lincoln Cent “Formative Years” design starting on May 14. These two-roll sets will sell for $8.95 with $4.95 shipping.

In the mean time, I have yet to find the “Birth and Early Childhood” cents in change. But I have been finding quite a few 2008-D cents in change.

Behind the Scenes at the Royal Canadian Mint

Not long ago, a Canadian friend passed along a funny video of a tour of the Royal Canadian Mint. Today, someone else sent the link to the video so I decided to share. The video is by Rick Mercer. Mercer is the host of the popular Rick Mercer Report on Canadian Broadcast Company network. He is a popular political satirist in Canada whose show is described as a cross between something he has done in the past and The Daily Show with Jon Stewart.

In this video, Mercer and his crew visit the RCM’s Ottawa facility to take a tour of the gold storage areas and coin production. Mercer is very irreverent in the video giving his tour guides and nearby guards proverbial heartburn over his antics. See for yourself and enjoy!

Computer-based Grading

I have been working with computers for over 30 years. During that time, I have watched computers evolve from room-sized systems to smart-phones that can fit in the palm of your hand. To make this point to people I talk with, I hold up my iPhone and tell them that it is more powerful than the IBM System/370 Model 158 that I used in college—using punch cards!

I was reminded how much technology has changed when I read the article The birth ... and death of computerized grading. The article recalls the stories of how computers were supposed to revolutionize coin grading and how New York inventor Henry A. Merton received a patent for computerized coin grading.

Merton’s patent claimed that his system could electronically identify, distinguish, and grade coins based on imaging technology of the daya. Using this system, Merton founded what would eventually called CompuGrade. Starting with Morgan Dollars, CompuGrade would use decimalize grading, assigning partial points to a coin, such as MS 64.5.

Limitations of the technology doomed computer-assisted grading almost as quickly as it started.

Imaging technology has greatly improved in the last 20 years. When combined with x-ray, magnetic resonance imaging, and other electromagnetic technologies, computer imaging becomes an indispensable diagnostic tool. Have you ever been through an MRI and watched the computer reconstruct your internal anatomy from those images allowing for a virtual tour of your body? It is amazing technology.

Advances in biometrics that work on the physiological aspects of the body can now determine differences shown by the same person because of biological changes, such as the effect of aging on your hands. High performance imaging systems are being tested for facial recognition and other identification programs to help law enforcement. While this technology is not perfect, it has shown a lot of progress.

Biometrics uses a concept called pattern recognition. Pattern recognition uses previous knowledge or statistics to recognize or match patterns. Pattern recognition uses a scoring system to determine how close a match would be. A real world implementation can be found in Apple’s iPhoto '09 application that includes a feature called Faces that helps organize photos by who is in the picture. Faces uses pattern recognition to recognize the people. Interestingly, while Apple’s documentation says that Faces works only on humans, users have reported that it can also recognize pets!

The same technologies could be used for grading coins. Since coins are more static than living beings, the computer can recognize the patterns and the scoring system could be translated into a grade for the coin or even find patterns, such as VAM varieties for Morgan Dollars.

Imaging technologies can be programmed to easily tell of a coin has be cleaned or dipped by noting how the light reflects off the surface. Think of how the computer can “look at” a coin and find the cartwheel effect or determine the fine lines that occur when a coin is cleaned or whizzed.

The article mentions that imaging can be used as a fingerprinting of coins to help in counterfeit detection. With Chinese counterfeiters becoming more sophisticated, computer imaging can be use to find these counterfeits. When a coin is determined to be a counterfeit, the die patterns can be saved in order to be used to find other counterfeits. Additionally, chromatography could be another technology to determine whether the gold or silver is from the period or contemporary.

Computers are great tools. Imaging technologies enhanced by computers can do wonderful things. To apply this technology to coin grading and analysis would be a fantastic addition to the industry. Can you imagine being able to take the technology to major shows and for a small fee, provide on sight diagnostics for coins before submitting them to the grading services? Too bad I do not have the money to invest in this. I believe it would be a great tool for the collecting and investing world.

CFA to Discuss Dollars and Cents

If you are in the Washington, DC area on April 16, the U.S. Commission of Fine Arts will be holding a public meeting. The CFA will meet at the National Building Museum located at 401 F Street NW in Suite 312. Meeting is scheduled to convene at 10:00 AM.

On the agenda is the selection of the final design for the 2010 Native American One Dollar Coin. Five reverse designs are being considered. The CFA is also considering the final design for the permanent reverse for the 2010 Lincoln Cent. Sixteen designs are being considered.

Based on what I have read in previous minutes of the CFA’s discussions, it could be entertaining to hear what is said about these coin designs.

Interesting Online Numismatics

Every so often I will surf the 'Net to find new things on topics of interest. When I do this for numismatics, I find interesting sites that I bookmark for future blog posts. The problem is that the topics are not in the mainstream and not in my core interests. But they are intriguing enough for me to try to find an excuse to write about them. Today, I will write about three of these websites.

I wrote about a presentation at my local coin club about Hobo Nickels. I heard about Hobo Nickels before but did not know details but I learned more about these coins and the artists who are credited with creating them. Although I mentioned the Original Hobo Nickel Society, I wanted to take this opportunity to talk about their website. Although it can use a small does of aesthetics, web surfers are greeted with a montage of six Hobo Nickels on the front page. One area to check out are the Nickel Carver’s Showcase with pictures of modern artists and their work. There are three pages of great works so be sure to look at all of the pages. You may also want to see the OHNS Annual Hobo Tokens, which can be purchase from the Society.

Under the category of collect what you like is the collection of Holed Coins. These are not coins made with holes but coins that had holes drilled into them. Most of the time, these coins are used for jewelry or for adornments on clothing. One representative of a Holed Coin enthusiast is Holey Lovin' by Douglas Thigpen. On the home page, Thigpen writes that he has “always been drawn to holed coins.” noting that “they are often procured for much less than non-holed examples.” Although the site looks sparse, the site can be easily navigated through the categories with pictures of various holed coins. You have to see the images of the two Carved Holed Coins where an 1875 Seated Liberty Dime and Gold Indian Dollar are carved into Love Tokens.

Rather than collecting coins, how about the slabs which they are housed. I am not talking about collecting for registry set but collecting sample slabs produced by the grading services. Cameron Kiefer, former Young Numismatist of the Year and grader for ICG, collects the sample slabs given out by the grading services to promote their services. Aside from the images of sample slabs from nearly every grading service that exists and used to exist, the site provides a visual history of grading services. The pages showing PCGS sample slabs and NGC sample slabs shows a fascinating evolution of their respective slabs.

While researching this post, I found a few other interesting websites. I will write about those in the future.

Proposed Congressional Gold Medals

Last week, I caught up with the commemorative legislation that has been submitted for consideration. This week, with congress on their spring break, I want to run down the Gold Medals that congress proposes to award.

The Congressional Gold Medal of Honor is the highest and most distinguished civilian award in the United States. Since first awarding the Gold Medal of Honor to General George Washington in 1776, there have been over 250 recipients, both individuals and groups. There have been two two-time winners: Major General Winfield Scott and John Horn, Jr.; and three-time winner Major General Zachary Taylor.

In order to award the Congressional Gold Medal, a member has to introduce a bill to gain congress’s consent. The introduction to the bill, what I call the “where as” section, describes why the person or group is deserving of the honor. Included in the bill is an authorization to the US Mint to strike bronze duplicates of the medal. Similarly, the design of the medal must go through the same design approval process as coins, involving the Citizens Coinage Advisory Committee and the U.S. Commission of Fine Arts.

Before one of these bills to be considered, the House Committee on Financial Services requires that Gold Medal legislation be co-sponsored by 75-percent of the members, the same as for commemorative coins. Currently none of the legislation that has been introduces has reached that threshold. As with commemorative legislation, there are no similar rules in the Senate.

Unlike bills for commemorative coins, proceeds from the sale of the duplicate bronze medals are paid into the US Mint Public Enterprise Fund where all seignorage from the US Mint is deposited. These bills also allow the Mint to withdraw funds to support the design and creation of the gold medal and bronze duplicates.

Here is a list of the legislation introduced to award the Congressional Gold Medal of Honor in the 111th congress:

H.R. 289: To authorize the President to posthumously award a gold medal on behalf of the Congress to the seven members of the crew of the space shuttle Columbia in recognition of their outstanding and enduring contributions to the Nation. Introduced by Rep. Sheila Jackson-Lee (D-TX) on January 8, 2009, with no current co-sponsors.

H.R. 304: To award a congressional gold medal to Joseph Barnett Kirsner, M.D., Ph.D., in recognition of his many outstanding contributions to the Nation. Introduced by Rep. Mark Steven Kirk (R-IL) on January 8, 2009, with one co-sponsor.

H.R. 347: To grant the congressional gold medal, collectively, to the 100th Infantry Battalion and the 442nd Regimental Combat Team, United States Army, in recognition of their dedicated service during World War II. Introduced by Rep. Adam B. Schiff (D-CA) on January 8, 2009, currently with 225 co-sponsors.

H.R. 406: To award a Congressional Gold Medal in recognition of Alice Paul’s role in the women's suffrage movement and in advancing equal rights for women. Introduced by Rep. Joe Baca (D-CA) on January 9, 2009, currently with 107 co-sponsors.

H.R. 1235: To award a Congressional Gold Medal to Ray Charles in recognition of his many contributions to the Nation. Introduced by Rep. Charles B. Rangel (D-NY) on February 26, 2009. This bill currently has no co-sponsors.

H.R. 1243: To provide for the award of a gold medal on behalf of Congress to Arnold Palmer in recognition of his service to the Nation in promoting excellence and good sportsmanship in golf. Introduced by Rep. Joe Baca (R-CA) on March 2, 2009. With 302 co-sponsors, this is short of the 324 to be placed on the committee’s calendar.

H.R. 1244: To provide for the award of a gold medal on behalf of the Congress to Tiger Woods, in recognition of his service to the Nation in promoting excellence and good sportsmanship, and in breaking barriers with grace and dignity by showing that golf is a sport for all people. Apparently, Rep. Joe Baca (R-CA) is a golf fan because he introduced this bill on March 2, 2009, right after he introduced H.R. 1243 (see above). There are currently no co-sponsors for this bill.

H.R. 1278: To posthumously award a Congressional gold medal to Shirley Chisholm. Introduced by Rep. Charles B. Rangel (D-NY) on March 3, 2009. Rangel represents New York’s 15th District that includes all of upper Manhattan and is very identified with the Harlem community. This bill has no co-sponsors.

H.R. 1484: To award a Congressional Gold Medal to Rabbi Arthur Schneier in recognition of his pioneering role in promoting religious freedom and human rights throughout the world, for close to half a century. Introduced by Rep. Carolyn B. Maloney (D-NY) on March 12, 2009. Maloney represents New York’s 14th District where Rabbi Schneier is the spiritual leader of the Park East Synagogue.

S. 614: A bill to award a Congressional Gold Medal to the Women Airforce Service Pilots (“WASP”). Introduced by Sen. Kay Bailey Hutchison (R-TX) on March 17, 2009. This bill currently has 35 co-sponsors.

S. 768: A bill to grant the Congressional Gold Medal to the soldiers from the United States who were prisoners of war at Bataan during World War II. Introduced by Sen. Tom Udall (D-NM) on April 1, 2009, with 7 co-sponsors.

Just like commemorative coins bills, all bills introduced in the House of Representatives have been referred to the House Committee on Financial Services. Those introduced in the Senate are referred to the Committee on Banking, Housing, and Urban Affairs.

Do You Want One In Your Easter Basket?

Even in a down market, there is always someone ready to capitalize on those who still have the money to afford extravagance. In Great Britain, the high-end retailer Selvridges is selling Melt’s Recession Proof Egg. Melt, the Selfidges house brand, is offering a hand-made to order chocolate egg made with a one-ounce gold bullion Britannia coin and decorated with 18-karat gold leaf.

Gold is currently $880.80 per ounce (£600.31 at the current exchange rate).

If you have a spare £1,000 ($1,467.25) and happen to be in the area of Selfridges’ Oxford Street store in London, you might want to pick up a unique easter gift.

Image courtesy of Selfridges.

A Calmer Gentler ANA Elections

When the American Numismatic Association held its last election, the mood of its members could be charitably considered contentious. That year, I attended the candidate forum at the National Money Show in Charlotte. The attendees at that meeting were angry. While some where complimentary to the Board, most were angry with the state of the association.

What a difference an election can make!

The current Board of Governors fired the previous executive director and hired Larry Shepherd. Both Shepherd and the Board have focused on rebuilding the core operations of the ANA and focusing more on the Association’s core mission. Amongst their successes is the recent approval a balanced budget [PDF] for the first time in many years.

I am not saying that the Board has been perfect; they have had a few missteps. But there seems to be more of a comfort level with the current direction than what we experienced in 2007. One evidence of this was the reported low turnout at this year’s candidate forum on Portland, Oregon.

Just because this Board of Governors was successful does not mean that this election is not important!

On Tuesday, the ANA announced [PDF] that 17 members have been nominated for the 2009-2011 Board of Governors. In fact, this year, there are two candidates running for president. Current Vice President Patricia Jagger-Finner and Governor Clifford Mishler are two very strong candidates for president. Tom Hallenbeck is running unopposed for Vice President. There are also 14 candidates for the seven governor seats.

I urge all ANA members to learn more about the ANA elections process and about the candidates. You should also visit CoinTelevision.com to see the videos from the Candidate Forum held on March 14, 2009. Additionally, watch for the candidate statements that will be published in The Numismatist in the coming months.

No ANA Dues Increase for Pre-Paid Membership

When I wrote about the new ANA Membership Fees, I commented that there was no information provided for those of us who prepaid through this year and beyond. So I asked.

According the the ANA, if you prepaid your dues, the increases will take effect the next time you renew your membership. Since I paid my membership fees through 2012, I will continue to receive the paper copy of The Numismatist without a dues increase.

I know I can read The Numismatist online, but I like having the paper copy. It can be read anywhere without worrying about an Internet connection and accessibility to electricity.

Catching Up On The Legislative Front

With the economic crisis, failing of industries, the fighting of two wars, and partisan bickering, some members of congress has found time to author and submit bills to authorize the striking of commemorative coins. Many of these bills have merit, but the timing is in question.

For the 111th Congress, the House Committee on Financial Services set a rule that requires a coin bill to be co-sponsored by 75-percent of the members. Considering that there are two open seats, the committee is requiring that the bill have 324 cosponsors. Currently, no coin bill has that many sponsors. I am sure as the session continues, there will be some movement on a few of these bills. There are no similar rules in the Senate.

Here is a rundown of the commemoratives legislation that have been introduced in congress:

H.R. 255: To require the Secretary of the Treasury to mint coins in commemoration of the 50th anniversary of the establishment of the National Aeronautics and Space Administration. Introduced by Rep. Rep Sheila Jackson-Lee (D-TX) was introduced on January 7, 2009. If passed, the bill should raise more than $5 million that would benefit the NASA Family Assistance Fund, the Dr. Ronald E. McNair Educational (D.R.E.M.E.) Science Literacy Foundation, the Challenger Center for Space Science Education, and the Steven F. Udvar-Hazy Center of the National Air and Space Museum.

H.R. 621 and S. 451: To require the Secretary of the Treasury to mint coins in commemoration of the centennial of the establishment of the Girl Scouts of the United States of America. Introduced by Rep. Jack Kingston (R-GA) in the House on January 21, 2009 and Sen. Susan Collins (R-ME) in the Senate on February 23, 2009. If passed, the potential $3.5 million paid in surcharges will be given to the Girl Scouts of America.

H.R. 1177 and S. 455: To require the Secretary of the Treasury to mint coins in recognition of 5 United States Army 5-Star Generals, George Marshall, Douglas MacArthur, Dwight Eisenhower, Henry “Hap” Arnold, and Omar Bradley, alumni of the United States Army Command and General Staff College, Fort Leavenworth, Kansas, to coincide with the celebration of the 132nd Anniversary of the founding of the United States Army Command and General Staff College.. Introduced by Rep. Dennis Moore (D-KS) in the House on February 25, 2009 and Sen. Pat Roberts (R-KS) in the Senate on February 23, 2009. If all of the proposed coins sold out, the $12.25 million in surcharges will be paid to the Command and General Staff College Foundation.

H.R. 1195 and S. 483: To require the Secretary of the Treasury to mint coins in commemoration of Mark Twain. Introduced by Rep. John Larson (D-CT) in the house and by Sen. Chris Dodd (D-CT) in the Senate on February 25, 2009. The potential $8.5 million in surcharges will be divided up between the Mark Twain House & Museum in Hartford, Connecticut; he Mark Twain Project at the Bancroft Library of the University of California, Berkeley, California; the Center for Mark Twain Studies at Elmira College, New York; and the Mark Twain Boyhood Home and Museum in Hannibal, Missouri.

H.R. 1209: To require the Secretary of the Treasury to mint coins in recognition and celebration of the establishment of the Medal of Honor in 1861, America's highest award for valor in action against an enemy force which can be bestowed upon an individual serving in the Armed Services of the United States, to honor the American military men and women who have been recipients of the Medal of Honor, and to promote awareness of what the Medal of Honor represents and how ordinary Americans, through courage, sacrifice, selfless service and patriotism, can challenge fate and change the course of history or the short title of Medal of Honor Commemorative Coin Act of 2009. Introduces by Rep. Chris Carney (D-PA) on February 26, 2006 and currently with 203 sponsors. If passed, the potential $8.5 million in surcharges would be paid to the Congressional Medal of Honor Foundation.

S. 653: A bill to require the Secretary of the Treasury to mint coins in commemoration of the bicentennial of the writing of the Star-Spangled Banner. Introduces by Sen. Ben Cardin (D-MD) and Sen. Barbara Mikulski (D-MD) on March 19, 2009. The potential $8.5 million in surcharges will be paid to the Maryland War of 1812 Bicentennial Commission.

All bills introduced in the House of Representatives have been referred to the House Committee on Financial Services. Those introduced in the Senate are referred to the Committee on Banking, Housing, and Urban Affairs.

ANA Rescinds Cipoletti's Presidential Award

Dave Harper, editor of Numismatic News, wrote a blog entry reporting that the American Numismatic Association Board of Governors unanimously voted to rescind the Presidential Award presented to former Executive Director Christopher Cipoletti. Cipoletti was given the award by then outgoing President Bill Horton in 2007 at the banquet held during the World’s Fair of Money in Milwaukee.

Harper reports that the request was made by Horton and brought up by President Barry Stuppler during the Board Meeting held at the National Money Show in Portland, Oregon. Former ANA President Bob Campbell told the Board that he thought this was a bad idea. Harper further said:

Legal Counsel Ron Sirna said the motion was in order after remarking that Cipoletti had cost the organization $2 million to $3 million in litigation. “There is a substantial basis for Mr. Horton’s request,” Sirna said.

With all due respect to Ron Sirna, while there might be a legal basis for the action is it really the right thing to do?

I would be hard pressed to find many ANA members who believes that Cipoletti did a good job. But what I find disturbing is that Horton is asking for the proverbial “do over” for his bad decision he made. Horton ignored the undercurrent of complaints about Cipoletti that were part of the 2007 Board of Trustees elections. Or Horton ignored what was being said. But even with the griping that was gripping the pages of the numismatic publications, Horton found time to defend the Board, himself, and Cipoletti in published letters.

Horton created this situation while he was ANA President by turning a deaf ear to the voices of discontent and defied his constituents to give the Presidential Award to Cipoletti. Now, the current Board of Governors wants to rescind the award because the legal bill for litigating Cipoletti’s dismissal cost too much. Apparently, this Board has not learned that you can't put the toothpaste back in the tube.

Former ANA President Bob Campbell was right when he said it was a bad idea. It looks like sour grapes. This is just a bad idea. Regardless of what happened subsequent to the award, what’s done is done. The ANA should drop this issue and just move forward.

Getting A Round Tuit In Baltimore

If it was Saturday at the end of March, it was time to drive to Baltimore for the Whitman Baltimore Coin and Currency Expo. This show is a three-times-a-year ritual for the numismatic community centrally located on the eastern seaboard. For the last few years, the show has expanded to three large halls in the Baltimore Convention Center and made into a real numismatic happening by the people at Whitman. Whitman has done a good with the show and I hope their new venture into Philadelphia is successful. If there is one complaint, I wish they would use chairs without arms. Those of us with wide bottoms would appreciate this.

After completing errands, I left home at 11:30 and drove to Baltimore. Depending on traffic, the trip from home to parking near the Baltimore Convention Center can take an hour. I park near the convention center in the parking lot at the Sheraton Inner Harbor. I overpaid for parking and walked to the Convention Center.

Registration booths are expertly tended to by members of the Baltimore Coin Club. Sine many of the members are also members of the Maryland State Numismatic Association, it was nice to see friendly faces.

Once inside I started with my regulars. I wanted to talk with them to see how the show was going. The responses were mixed, but in the extremes. Some dealers said that they would not make the money they paid in fees and expenses for the weekend. Others said that the weekend could not be better.

Gold and silver seemed to be very hot. It was difficult to find 2009 Silver Eagles. I was able to find one from a dealer with three singles and two rolls left. Good date Morgan dollars were also selling well. One dealer said that early 20th Century commemoratives were also selling well.

There was a lot of gold. Gold was everywhere. Some dealers were advertising that they would buy scrap gold. I watched as a dealer bought scrap gold at spot less 5-percent. I also saw a dealer with one ounce gold eagles fanned across his case when I entered the hall and the pile was half the size two hours later.

At the show I met Sharon, a dealer from New York who travels with her husband nearly every weekend to shows. She was a fun person who convinced me to buy something I originally was not going to buy. Sharon mostly sells currency and said that the show was a disaster for her. Although she had some very nice National Banknotes, there seemed to be little interest in currency at this show. Sharon and her husband will be at the Dulles Coin & Currency Expo at the end of April. This year is the third annual show at Dulles. I will have to drop by.

Other currency dealers also said it was slow. I do not collect currency because of the costs involved, but I will browse their tables to look at the artwork of these wonderful notes. Currency dealers also love to talk about their products and I have learned a lot about economic history from their discussion of the notes. Nearly every currency dealer said that their sales were slow. Only one dealer gave me a shrug and said that it was "OK."

Although I did not buy much, I continued my tradition to try to find something I consider “neat.” This show’s neat find did not cost anything. I was walking down the aisle and walked by the table for Abbott’s Coins. I forgot to ask who the dealer at the table was, he was not John Abbott, but he was handing out these copper-looking tokens. Looking at the token, there were the big letters “TUIT” on the front. I looked at the dealer and said, “I can’t take this. It means that I would have to get things done!” But it was so compelling, I had to take one.

Now that I have a “Round TUIT” I cannot complain that I will get things done when I get a Round TUIT. I have one. I guess it’s time time to get things done!

The June show will be bigger and will have a Sunday session. There will be speakers, club meetings, and more activities. It will be a real happening along with the usually buying and selling. If you are in the area, you have to attend this show. When you are done, remember that the Inner Harbor is right next door with shops and plenty of restaurants. If you want to bring your family and they are not interested in coins, send them to the National Aquarium while you check out the coins.