Saturday, January 17, 2015

When coins no longer matter at all

We are nearing the point when coinage becomes irrelevant. Already many of us do most our daily business electronically and have little use for cash.  This will continue and soon enough there will be people who may live their lives having never handled cash at all.  Eventually governments will stop producing paper money and coinage.

That may cause a resurgent interest in coin (and paper money) collecting, but longer term it doesn't bode well.


There will always be people who want to transact business privately.  Their business may be illegal, or they may be avoiding taxes, or they may just be pursuing privacy.  These people use cash now - we call it the "underground economy".   What happens there when governments no longer issue physical money?

I suspect they'd turn to bullion.  Maple Leafs, Eagles, bars and so on.  That's perhaps inconvenient for large transactions, but it's more convenient than anything else - trading bags of cocaine has more disadvantages than trading bullion.

In 2014, the U.S. mint produced over 44 million ounces of Silver Eagles.  I have to wonder: did all of that go to collectors and stackers?  Is it possible that the bullion underground economy has already begun? Or at least that people are stockpiling in the expectation of that?  In other words, how many people are buying bullion expecting to exchange it for dollars later vs. those who expect that the bullion itself will be their medium of exchange?

Note:  All my coins are in a safe deposit box.  I keep nothing in my home. 

Friday, January 16, 2015

United States 3 Cent Coins

The first time I saw a three cent piece was in a box of old coins I inherited from my grandfather. It was silver, quite worn and seemed so very thin and fragile that I couldn't imagine that people had ever really used these as money.

Being slightly smaller than a dime in diameter (14 mm vs. 17.9 mm for a dime) and much thinner would seem to have made this something all too easy to lose. The weight (.8 gram originally and then reduced to .75 gram) would also make it nearly unnoticeable should one fall out of your hand or slip through a tiny hole in your pocket.

And yet, in spite of that, these coins actually were popular for a time and were widely used. We can see that from how many quite worn specimens exist today - search Ebay auctions and you'll find many well used 3 cent silver coins offered for sale.

So why were they so popular?

Your two or three cents worth
In the 1850's, a dollar had roughly the same purchasing power as $30.00 does today ( That means that one of these coins had only a bit less purchasing power than a dollar of today. Admittedly, that's not much, but it is enough for many small things, and that was also true then.
For example, one of the things you could do for three cents in 1851 was to mail a half ounce letter. Prior to that, rates were higher - in 1844, it might have cost you nearly 15 cents. That reduction in cost was good news for people sending letters, but it also introduced a problem.
Nobody liked small change
You probably find pennies (technically "cents", pennies are British) annoying even today. In the 1850's they were even more so. They were large and clunky, weighing three times as much as now and having ten times the surface area. Being copper, they also tarnished and attracted dirt - they were not well liked.
Worse, they were not legal tender. If you handed over three of those large cents as payment for something, you could be refused on those grounds. If you paid with a silver half dime (which was legal tender for debts up to $5.00), you'd get two clunky large cents back in change. Having a three cent coin made a lot of sense!
The value of silver
Setting the silver content of coinage had been a bit of a problem. When silver rose in value, people would quite naturally hoard coins that were worth more than their face value. Coming into the 1850's, a 50 cent coin became worth 53 or 54 cents - obviously worth melting or at least saving.
That created yet another problem for a person who wanted to mail a letter: would you hand over a half-dime or dime as payment when it was worth more than that in raw silver? Silver coins disappeared from circulation.
The silver three cent coin of 1851 was debased with enough copper (25% originally, reduced a few years later) to make it not worth hoarding while still having enough silver in it to be seen as having real value. This was later done with all silver coins, but the silver content was increased to 90% and the size was reduced to try to discourage hoarding and melting.
This worked - for a while. The silver 3 cent coin was successful and saw plenty of use for postage and other needs.
The Civil War
The U.S. Civil War caused hoarding to start up all over again and even the debased coinage was pulled out of circulation. There were paper money notes issued in three cent denominations, but people hated those also.
Worse, in 1861, banks had suspended specie payment. That is, if you brought in paper currency or Demand Notes, they would not give you coins in exchange.
That this made commerce difficult should be obvious.
More debasement
The somewhat unexpected acceptance of so-called "civil war tokens" made Congress realize that small coins didn't really need bullion value. They therefore authorized a nickel 3 cent piece and began minting these in 1865.
These were accepted by the public and by merchants and were minted right up until 1889, when postage rose to 5 cents.
You can find these 3 cent nickel pieces at reasonable prices. Many millions were made, so they are easy to find even in higher grade condition.
These interesting pieces paved the way for the valueless (that is, no intrinsic value) coins we have today.

Note:  All my coins are in a safe deposit box.  I keep nothing in my home. 

Saturday, January 10, 2015

PhoneScope Clip On Microscope Review

Although I have a USB microscope, I wanted something for my phone that I could use in the field. I bought the Lighthouse Phonescope (see Amazon link here).  This is a lens attached to a very strong clip that should fit almost any phone. Here it is attached to my iPhone with an Otter case.

The clip spring is quite strong. I found it somewhat difficult myself; someone with weaker hands (like my wife) might not be able to do it at all.

I did find it slightly easier if I put it on from the side:

The actual lens can easily come out of the clip when not attached to a phone.  It's not so loose that it is likely to fall out, but you could knock it out accidentally. 

The translucent plastic piece snaps on to the lens and provides the right focal length.   Unlike my USB scope, there's nothing to focus with this.

But in order to get that relatively flat, you'll need something at the other end of your phone. I used my wife's pill box, which was close enough.

So now the question is, how well does it work?

You need LOTS of light.  That translucent pedestal will only let in so much.  I was just using overhead lighting in my kitchen; that was insufficient, so I added a flashlight.  I used the iPhone zoom magnification in addition to the Phonescope lens.

But remember that this is a fixed focal length.   Is the ideal distance with the coin covered as it is for the Lincoln cent above, or should it be on the coin itself as it has to be with a silver dollar and can easily be with a half dollar?

What about a coin in a slab? The coin surface will be a little farther away. The iPhone camera will compensate for that somewhat, but the results were a little fuzzier:

I was unable to zoom at all when looking at a slab; the iPhone could not get focus when zoomed.

So, all things considered: this is a decent tool for raw coins, but not ideal for slabs.

Note:  All my coins are in a safe deposit box.  I keep nothing in my home. 

Wednesday, January 7, 2015

HK-131 1901 Evacuation of Boston So-Called Dollar

This medal was among the coins my father passed to me.  The bronze replica I have was distributed to Boston school children in 1901. My grandfather was fourteen years old and his family was living in Boston then, so it is quite possible that one of these was given to him. Unfortunately, it's not the one I have now as I sold that years before I knew what it was.

The reverse is a replica of a gold medal given to George Washington.Washington's family sold that in 1876 to a group of Bostonians who purchased it and immediately gave it to the City of Boston, intending it for the Boston Public Library. The medal is supposedly on display at the Boston Public Library each year on Washington's birthday.  I've never seen it, but it is said to weigh over 7 ounces, so it must be impressive.  This copper medal is 38 mm,; the gold medal is 68 mm (2.67 inches).

There are many restrikes of the original medal; see "Washington Before Boston Medal".

I found Celebration of the Centennial Anniversary of the Evacuation of Boston by the British Army  which describes the purchase of the medal among other celebrations of 1876.

Two people with "Lawrence" surnames contributed to the purchase of the gold medal ) but neither were my grandfather's father Herbert Myron Lawrence.  They could be relatives, but I do not know.  I believe Herbert Myron was in San Francisco at that time.

Note:  All my coins are in a safe deposit box.  I keep nothing in my home. 

Tuesday, January 6, 2015

Collecting by Type

A fun and less expensive way to collect coins is by "type" rather than by date. That is, rather than trying to find or buy a complete set of Lincoln Cents, you might have ONE Lincoln cent that would represent the whole series. Of course for U.S. coins you'd also have an Indian Head Cent, a Flying Eagle Cent and a Large Cent.
That would be a basic "type set" of U.S. cents and needn't cost a lot of money if you are content to have circulated examples.

Most type set collectors would take it a bit farther. For example, Lincoln Cents had a "wheat" reverse until 1959, at which time it changed to the Lincoln Memorial. You'd probably also want the four special  reverses of 2009 and the "E Pluribus" design that started in 2010.  
Most would also include one of the "steel cents" of 1943. These were made to conserve copper for wartime use.
That would seem to cover the major varieties of Lincoln cents, but one more is often added: that's the 1909 issue with "V.D.B" under the wheat ears on the reverse. Those were the designer's initials - Victor D. Brenner, but many people objected to him "signing" so prominently, so later that year his initials were moved to a less visible location under Lincoln's shoulder (tip a penny and you will see them there still - though you may need a magnifier!).
By the way, our one cent coins are technically "cents", not "pennies". Some folks make a big deal about that.
There are a few more minor varieties to consider. In 1944, and again in 1983, Lincoln Cents changed their composition. Lincoln cents were bronze (95% copper, 5% tin and zinc) from 1909 to 1942, steel in '43, without tin from '44 to '58 (though 1944-1946 are more brass) and then with zinc and tin again until 1959. In 1962 this was changed to 97.5% zinc with a light coating of copper - which is why modern pennies get really ugly looking very quickly.
You could carry this much farther. There are varieties where the first two letters of AMERICA are nearly touching or not - some would make sure to include examples. There are also large and small date varieties of 1960 and some other years and the famous "double die obverse" of 1955 (and other years).
I've only talked about Lincoln cents - there are multiple varieties of Indian cents, Flying Eagle cents and Large cents. There are also "patterns" - transitional coins never intended for general circulation.
When you start including older coins like the Large Cents in a type set, the cost can start to mount. Few of us could afford a 1793 "chain" cent in anything but the poorest condition and even that could run thousands of dollars.

I used a holder much like this for my first Type Set

Other ways to collect coins
There are also "Commemoratives" - coins issued for special events, like the 1893 Columbian Half Dollar and even that 2009 "Log Cabin" cent. Many would include some of these in a type set.
There are Civil War Tokens, Colonial Coinage and coinage from "private" mints - and that's just the United States. British coinage goes back much farther and Roman coins can be older still and yet still be common enough for collectors.
If we start collecting nickel and dime types, quarters, halves and dollars, as well as the odd two cent and three cent pieces, you could spend a fair amount of money amassing even the most basic set.
As to gold coins, that really starts to get expensive - even without considering the rare types and varieties.
However, collecting by type is really up to you. You might not want to collect anything before some arbitrary date - your birth year, for example. Or you might limit your collection to one series - Lincoln cents or Jefferson nickels. It's up to you.
Here's an idea: a "Coins of the world" type set, or even a "Copper coins of the world". This could be great fun and very educational.
How about "Coins with famous people" or "Coins with animals"? Or "Coins of my birth year"?
Very specialized collections might be "Coins made at the San Francisco mint" (that one could set you back a few dollars!).
The possibilities are only limited by your imagination and of course your wallet in some cases.

Note:  All my coins are in a safe deposit box.  I keep nothing in my home. 

Monday, January 5, 2015

Early U.S. Coinage

Not many of us can afford to own examples of the earliest U.S. coins. Mintage figures were often very low and some are so scarce that it is difficult even to find pictures of them, never mind have an opportunity to own.
By the way, many of the coin pictures here are Courtesy of Heritage Auction Galleries/ If you are one of those people who can afford this sort of collecting (or if you just enjoy looking at things like this), Heritage Auctions is a great place to browse.
In March of 1791, Congress resolved that a mint should be established and that the President (then George Washington, of course) should make that happen. Notice the simple language and lack of detailed instruction of the resolution below; it's very different from any Act of Congress you'd read today. Basically, Congress wanted a Mint and the rest was up to the President.
III. Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That a mint shall be established under such regulations as shall be directed by law.
Resolved, That the President of the United States be, and he is hereby authorized to cause to be engaged, such principal artists as shall be necessary to carry the preceding resolution into effect, and to stipulate the terms and conditions of their service, and also to cause to be procured such apparatus as shall be requisite for the same purpose.
The Mint was seen as very necessary. This wasn't just national pride. There were coin shortages and the coins that were in circulation were a jumbled mix of State and foreign coins that varied widely in size, weight and value. Anyone who has been puzzled by currency or has accidentally paid too much in a foreign country is sure to appreciate how confusing this must have been for the Colonists. You might have been offered payment in French coins one minute and Massachussets shillings another. Federal coinage was an answer to a very real problem.
The actual construction and operation of that Mint was a year away and so were instructions from Congress as to what sort of coins were to be produced. In the meantime, proposals were made and some pattern coins were struck at private mints.
The Fugio Cent
One coin, the Fugio Cent, was authorized by the earlier Continental Congress of 1787. The design, presumed to be by Benjamin Franklin, was the same as paper money created in 1776.
Surprisingly, considering that only about 400,000 of these were minted (by James Jarvis, who obtained the contract through a bribe), uncirculated examples are not difficult to find. We know that the Bank of New York acquired a full mint keg (possibly 15,000 coins or more) of these in 1788 and only started disbursing them (to favored customers) in 1926. They still had coins left as late as 1948.
There were also restrikes in the mid 1800's. These are known as "New Haven Restrikes", though they were actually most likely made in Waterbury, Connecticut, not New Haven. As there are multiple die varieties, these may have been restruck at other mints also.
Fugio restrike from my collection

The original mintage was supposed to be for 300 tons (probably about 30 million coins) - imagine how common these would be today had that production been achieved!
There was also a dollar coin (commonly called the Continental Dollar) of similar design. No contract was ever issued to produce these, so all examples are either patterns or much later restrikes made in 1876.

Modern restrike of the Continental Dollar from my collection
Nova Constellatio
These designs were contracted by Robert Morris, the one and only Superintendent of Finance the United States ever had.
There has been disagreement over whether these should be referred to as "Nova Constellatio" or "Constellatio Nova".
The dates of 1783 almost certainly do not mean that these were made then. No references exist before 1785, so those dates were probably meant to be symbolic of the 1783 Continental Congress rather than to mean the date of issue. However, there are also coins dated 1785 and 1786, so perhaps coinage was intended for 1783.
These coins did circulate and large numbers were minted, but they were produced in England, not the United States. It is estimated that several million of these were made, yet it is less common than those figures might suggest. That may be partly due to being driven out by heavier weight copper cents and they were actually made illegal in New York. We know that private mints bought up many coins to reuse for new coinage, so that certainly contributed to scarcity.
Nova Constellatio: Courtesy of Heritage Auction Galleries

First U.S. Mint Coins
The first official coins actually struck were half dimes. Some 1,500 were produced in July of 1792 by John Harper, while the Mint itself was still under construction. Although not officially produced at the Mint, mint personnel apparently supervised this coinage.
Many references state that George Washington supplied a hundred dollars worth of "silver plate" for these coins, but not everyone accepts that as fact.
The design is somewhat crude, and although some assumed the figure on the front might be Martha Washington, in fact it was symbolic of Liberty. Washington and probably all patriots of the time had a definite aversion to monarchy and what they called the "cult of personality" - they did not believe that individuals should be idolized by appearing on coins.e
(In 1909, the first violation of their opinions in that area was the minting of the Lincoln cent - no doubt all the Founding Fathers would have been appalled, but we have been illustrating our coinage with national heroes ever since.)
Some numismatists insist that these coins should be considered patterns rather than actual issues. They point to the fact that George Washington handed out many of these to friends and dignitaries as keepsakes. However, these definitely were intended for circulation and many worn pieces are known, so some of the coins certainly saw real use.

Worn 1792 Half Disme: Courtesy of Heritage Auction Galleries

The Large Cents of 1792 and 1793
The 1792's are particularly interesting because some of them contained silver, either as a noticeable plug in the center (the "Silver Center Cent") or mixed in ("fusible alloy cents"). The idea was that the silver would be worth 3/4 of one cent and that the copper would make up the rest, giving the coin an intrinsic value of one cent while keeping its size down.
As these coins are rather rare, and testing actual metal content is naturally frowned upon, all of the non-plug varieties are referred to as ‘fusible alloy’ regardless of what their actual mixture might be. A larger version was made with only copper.
These were intended as patterns, yet lower grade coins exist. Perhaps they were spent at later times?
The 1793's were definitely for circulation. The early "chain" design had 36,103 pieces struck and when the rather ugly design was changed to the "wreath" version, another 63,000 or so of those were produced.
I once owned a very well worn "wreath" 1793. The date was gone, but it was easily identifiable because the "Liberty Cap" cents of 1793 were a much different design. Even though this was many years ago, and the condition so poor, I paid more than $100.00 for the coin. Today, a similar piece might fetch $500 or more.
While public sentiment was strongly against the wild haired "Liberty" of those first coins, it does have a certain attraction in spite of its crudeness. To my mind, the later "Liberty Cap" cents are actually less attractive.

1795 gold
The first gold was deposited at the Mint in February of 1795 by Moses Brown of Boston. He deposited a little over $2,270.00 in gold ingots and was given silver coins in payment.
The policy at the time was "free coinage". That is, you could bring silver or gold bullion to the Mint and they would turn it into coins at no cost to you. However, if you were not willing to wait, as Moses apparently was not, you'd pay a fee of one-halt percent.
I assume Moses Brown was probably the Brown referred to in this Wikipedia article. If so, he may have needed the coins for his various businesses. That $2,270.00 was roughly equivalent to $40,000.. today, so it was hardly a small amount of money, yet no great fortune either. It might be perfectly reasonable that he needed the silver coins for business. Given the weight of a 1794 half dime (20.8 grains), that pile of coins would have only been 130 lbs or so.
However, the total mintage of silver for all of 1794 and 1795 was only 86,416 half dimes ($4,314.00 worth) and there were only 5,300 half dollars and 1,758 dollars made in 1794, so however Moses mixed his take, he went home with a significant portion of the Mint's output!
Seven hundred and forty four gold half-eagles ($5 coin) were delivered to the Treasury on July 31st, 1795. The total mintage for the year was 8,707 of these. I personally think this particular coin is one of the most beautiful ever made. The designer was Robert Scot, who was Chief Engraver of the Mint. His eyesight was failing even when he was appointed, which might account for the ugliness of the half dime, but I find nothing ugly about this coin.

As so few of us can afford most of these rarities, replicas are often available so that we can have something more tangible than a picture. The Hobby Protection Act of 1973 made these reproductions (all stamped "COPY" on one side or the other) legal.

Note: All my coins are in a safe deposit box. I keep nothing in my home.