Circulation Commemoratives

These are some of the most unique and interesting coins produced in the modern era. They consist of an ongoing or serial subject, which are released for general circulation. A good example is the 1999-2008 Statehood quarter-dollar program of the United States. Canada had a similar program series commemorating the new Millennium, which released one new design into circulation per month in 1999 and 2000.

Unlike precious medal commemoratives, these are base metals and are produced by the millions. In some instances, a portion of the circulation commemorative run is produced in specialized collector folders. There are cases when a standard issue of the denomination is released along side the commemorative, as in the 1993-1999 Spanish 5 Peseta production run. Circulation commemoratives can be released annually- one design in a single year, or perennially- more than one design in a single year.

There are other criteria under which circulation commemoratives are issued. A particular denomination is usually chosen for a particular series of commemorative issues, such as the British 50 pence series released in 2012 to celebrate the London 2012 Olympics. In the case of Spain, however, the lowest four denominations, 5, 10, 25 and 50 Peseta coins were issued with circulation commemorative runs. In other cases such as Germany, only the 2 Mark denomination was released with a commemorative design.

All of these production runs are usually issued in very large quantities- generally 1 million or more per design is considered a quantity suitable for circulation. Instances where a fair amount of deviation exists between issues in a single series can lead to a higher demand for the lower produced designs. This can lead to hoarding one design over another when it is encountered in general circulation. It is the same principle as Gresham’s law, only mintage figures determines demand instead of debased medal content. An example of this is the 2003-2004 Statehood series production of US quarter dollars. The ten designs released during this period have the lowest mintage figures of the entire 10-year lifespan of the entire program. As a result, they command higher prices in the secondary market, even though several hundred million specimens exist (from both mint facilities).

Collector and general public interest in a commemorative program can sometimes dictate the future of the program, even before it is finished. The United States began the Presidential $1 program in 2007, which saw the release of four designs per year, each with a different US President as the subject. Because the US produced hundreds of millions of these coins, interest diminished beyond the initial year. In 2011, the US Mint decided to drastically reduce the number of Presidential Dollar coins it would produce for the remainder of the program. It is still unclear how this mintage reduction will impact the success of the program moving forward.

While it is nearly impossible to find a large monetary authority that does not produce circulation commemoratives today, this practice was almost unheard of only twenty years ago. One of the first circulation commemorative to be produced by a modern major monetary authority was in 1967, on the occasion of Canada’s 100th Anniversary of Confederation. All of the coin denominations in circulation at the time were released in normal quantities with a different design.

Some national banks and monetary authorities, it has been suggested, began issuing these circulation commemoratives in order to create value in the minted coinage, which does not otherwise exist since most currencies debased their coinage decades ago. Obviously the value of these circulation commemoratives do not come near the value of their precious medal counterparts, so this solution is questionable.

Whatever the reason these issues were started, collectors and enthusiasts love them! To that end, I’ve created several web pages (Italy, Russia and Spain so far) in an effort to catalog as many of these issues as I can: http://www.richwertzonline.com/coins/Circ_Comm_IT_200L.html

Penny Press

I’ve always been a fan of the penny press. The penny is one of my favorite coins and I love that you can get a souvenir for just 50c. I prefer to use all copper pennies, since the post-1982 variety tends to have too many variations and the end result causes too much of the zinc middle to show through.

When I attended a Penguins hockey game last month, courtesy of a friend of mine, I spotted the press while waiting for him to come out of the gift shop. Of course I didn’t have any pennies with me at the time. When my coin buddy Suzy heard about it, she knew she just had to go and get a whole mess of them.

We scheduled a ‘date’ and met to find the press had a handy change machine where you could only get quarters. Suzy had to find pennies in the gift shop across the hall from the press.

There are four designs and I pressed three of each. After cleaning them off a little, I put them in my Penny Passport book. I’ll probably be getting several dozen more in the near future!

Spring coin show

On Sunday, March 18, my best coin buddy, Suzy, and I went to the C.A.M.P. coins show in Monroeville. It’s free to get in and you’re automatically registered in a drawing for a gold coin. There are drawings every hour for other prizes. It’s really well run and I find the people who have tables there to be especially nice and accommodating. Suzy and I emptied one bucket of foreign coins into another bucket and I found a couple of really nice coins.

Among them, this wonderful British commemorative 50p dated 1994. The subject is the 50th anniversary of the end of World War II. I’ve always wanted one of these but could never find one. I managed to snag a Thai commemorative 1B coin, whose subject is the Sixth Asian Games.

Several tables had banknotes, which reminded me that I forgot to bring my stash that I wanted to sell. In the hopes that I could at least get an idea of how much my stash was worth, I began a conversation with one of the vendors. His eyes lit right up when I told him about the Iraqi Dinar notes that I wanted to sell. He gave me his card and asked me to email him with pictures. We discussed meeting at a coin show this Saturday, but I can’t get there. Apparently, these are of such high value that he wants to meet me and we can discuss a sale. I’m trying not to be excited, but it can’t be helped. He is also interested in buying the silver coins I had listed on eBay, so I might be able to get rid of my entire stash that is up for sale in really short order.

Copper mining

For the first copper mining project in 2012, I obtained another $25 box of pennies. All 2500 were sorted, separated, catalogued and the ones I didn’t want were wrapped back up again. Since I started this activity, I have sorted, by hand, 11,500 pennies. A small percentage, as expected, are wheaties- my favorite.

I’ve been keeping aside some nice looking copper and the shiner non-copper ones, as well as all 1982 specimens and all presentable pennies between the years 2008 and 2012. I did have a small gathering of 2007 pennies, but I haven’t been running across too many good looking examples lately, so it’s not a priority.

In the second-to-last roll in today’s mining project, I ran across a rare find, indeed. A 1907 Indian Head. I was stunned. This is the most exciting find I’ve made in circulation change since my silver quarter hoard when I worked at Revco in 1995.

I’ll be getting another $25 box in the next week or so to keep me busy while my wife goes to visit her mom for a couple weeks. Maybe I’ll get this lucky again!!

Andover voters to decide on silver dollars as pay alternative for town employees (Boston Globe)

February 09, 2012|Katheleen Conti, Globe Staff

Robert Shapiro recalls holding discussions nine years ago with Mexican leaders, including a senator and a member of the nation’s central bank, on the merits of using silver as a currency instead of pesos.

“I found out that Mexico’s economy was the right size, and at the time they were the number one silver producers in the world, and [I] thought that they would set the silver standard,’’ Shapiro said. “I tried to convince them that it would be a great advantage.’’

But Shapiro was not in Mexico representing the United States. In fact, as a math teacher in Methuen at the time, he wasn’t representing anyone officially.

“I went on my own,’’ said the Andover resident, on what he called his two-month stint as a consultant economist. “I sent them a letter with this outlandish proposal and one senator sent me a reply… . I like to think outside the box.’’

Shapiro’s idea may not have taken hold in Mexico, but he hopes it does in Andover, where he will ask Town Meeting voters in April to authorize the town to give its employees and contractors the option of receiving part of their pay in $1 American Eagle Silver coins.

“It’s a roughly 4 to 5 percent boost in purchasing dollars,’’ Shapiro said. “The town of Andover stands to save about $1 million if roughly 250 employees participate.’’

In his petition, which received the minimum 10 signatures from registered voters to make it onto the Town Meeting warrant, Shapiro states that as of last month, the exchange rate for a $1 silver coin is $35. Employees who choose to receive part of their earnings in silver coins would realize savings by way of paying less taxes, he said.

An employee making $1,000 a week, for instance, may choose to receive half of those wages in silver coins: The town would pay $500 in paper dollars and $500 based on the exchange rate of the silver coins, Shapiro said. Based on the January exchange rate, $500 would be the equivalent of roughly 14 silver coins. So the employee would receive $514 ($500 for their approximate value when sold and $14 for their face value) in wages, instead of $1,000, thereby falling to a lower tax bracket and paying less in taxes, Shapiro said.

The tax savings also would apply to the town, as it would only have to withhold taxes on the face value - not the higher market value - of the coins, he said.

“There is another side, and the other side is that the 4 to 5 percent [in purchasing power] that the employee and the town would save is coming from Uncle Sam,’’ Shapiro said. “And so the IRS is going to take the fall for it, and they’re not going to be happy.’’

A Las Vegas construction business owner was sentenced to 15 years in federal prison in 2009 for tax fraud and evasion, which included a payroll scam in which he paid workers with silver and gold coins, allowed them to immediately trade them in for paper dollars, but only withheld taxes for the total face value of the coins, according to the IRS and several local news reports. Shapiro said his proposal is nothing like the Nevada case.

The Las Vegas business owner “was trying to defraud the government out of the money. That’s where he went wrong,’’ Shapiro said. “Tax evasion, that’s when you don’t report earnings. Tax avoidance is just like when you take a deduction on your house, you’re trying to avoid taxes, you’re trying to pay less taxes, and there’s nothing in the tax code that says that you have to arrange your income to increase how much you pay in taxes.’’

Robert Bliss, a spokesman for the state Department of Revenue, said the department would have no problem with the idea, “if it was acceptable through the employees, it has a real monetary value that people accept it, and it could be reported as income with the IRS.’’ Town Counsel Thomas Urbelis said he could not provide his opinion on the legality of the proposal because he had yet to read the details.

In a transaction involving gold or silver coins, excluding their fair market value from reported income is considered frivolous by the IRS, according to examples listed on its website. Several Appellate Court decisions have issued similar rulings, including a 1981 decision out of the US Tenth Circuit Court of Appeals in Denver, where it was determined that, although legal tender, silver coins have both face value and fair market value. The decision stated that “when a taxpayer bargains for and benefits from the higher market value of silver coins, he or she must include this amount in income.”

Still, ideas like Shapiro’s are gaining steam in several states due in part to US Representative Ron Paul, a Republican presidential candidate who is a longtime advocate for ending the Federal Reserve System and returning to a gold-or silver-based standard of currency, said Frank Talty, political science professor at University of Massachusetts Lowell.

Paul’s argument is that the hyperinflation of the dollar with no gold or silver standard “is all smoke and mirrors, like the king has no clothes, and eventually we’ll discover that the currency has no backing and it will lead to the destruction of world markets,’’ Talty said.

Shapiro’s proposal could be risky for employees and contractors because of fluctuating values for silver, or the potential that the IRS will seek to tax the coins’ fair market value, Talty said.

“It’s not a good idea. I don’t think you should tinker with the currency,’’ Talty said. “When the Federal Reserve reduces interest rates and injects more money into the economy, people don’t disapprove. But if you’re like Ron Paul, you think this system is [flawed].’’

Talty added that people such as Paul and Shapiro are bringing awareness to residents and initiating conversations.

Shapiro said Andover will likely have to partner with a bank or other financial institution if the proposal is passed. This could also give employees the option of avoiding service fees from coin dealers or banking institutions if they wanted to cash in the market value of the coins, he said.

The key to his proposal is that it is voluntary, so town officials may or may not choose to offer silver coins to employees, who are also not required to participate, he said.

“I need to do a lot of explaining [at Town Meeting] on why it’s a good idea,’’ he said. “It’d be a nice way to give a ‘thank you’ to the unions. They’ve agreed to pay cuts to balance the budget… . I think this would be a nice way to say, ‘We’re not in a position to give you more dollars, but here’s your purchasing power back.’ ’’

Katheleen Conti can be reached at kconti@globe.com. Follow her on Twitter @GlobeKConti.