This article was originally printed in Numismatic News.
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Collectors will not be denied proof silver American Eagles this year if Congress acts on a Mint recommendation to amend current law to allow the Treasury secretary to divert some blanks from the bullion Eagle program.
Mint Director Ed Moy testified before the U.S. House of Representatives Financial Services Committee’s Subcommittee on Domestic Monetary Policy and Technology July 20. He told the members that if the law is changed by Sept. 1, the Mint can strike up to 830,000 proof silver Eagles by the end of the year, with production capability of roughly 200,000 coins a month.
No promises of action were made, though no opposition was expressed.
Moy was one of a number of government officials testifying. He was joined by Larry Felix, director of the Bureau of Engraving and Printing; Louise L. Roseman, the Federal Reserve’s director of the Division of Reserve Bank Operations and Payments, and Ken Jenkins, Secret Service deputy special agent in charge of the Criminal Investigation Division.
If you knew nothing about U.S. circulating coins but what you heard at the hearing, you would think only the dime is without problems.
All of the other denominations were objects of concern for one reason or another.
Moy pushed for passage of legislation that would give the Treasury secretary the authority to determine what coins are made of.
There was some push back on this on constitutional grounds by subcommittee member Ron Paul, R-Texas, and others.
It costs more to produce both the cent and the nickel than face value with the present compositions.
Moy pointed out that the problems of the cent and nickel have existed since he was first asked about them at his confirmation hearing four years ago.
At the other end of the denominational scale, Roseman pointed out that there were over 1 billion unneeded Presidential dollar coins in the Federal Reserve inventory because present law requires that they take these to make each Presidential design available to the banking system.
The public’s preference for the $1 bill was another reason cited for the excess dollar coin supply.
Also backed up were 197 million half dollars in the Federal Reserve’s hands. In only one year in the past 10, 2003, has the Fed sent more halves into circulation than it took in from member banks.
Demand for new quarters from the Fed is such that Moy said that production of America the Beautiful quarters going forward would be 50 million coins of each design.
When asked about phasing out the $1 bill by the committee chairman, Melvin L. Watt D-N.C., Roseman undercut the cost savings argument of paper versus coins by pointing out that currently notes now last three and a half years instead of 18 months and efforts are being made to extend the life of the notes even further.
She also said the idea of abolishing the $1 bill should be discussed with countries that currently use the U.S. dollar to see how they view the idea.
Felix told the committee that the BEP produces 7 billion notes a year on average and they are redesigned every seven to 10 years.
The newest one, the $100, will enter circulation in February 2011.
Jenkins noted that counterfeiting was being successfully fought. In fiscal year 2009 $69 million in fake bills was seized in U.S. circulation while another $108 million was grabbed before it entered circulation.
When Rep. Frank Lucas tried to engage in an in-depth discussion of Chinese counterfeits, Jenkins noted that fewer than 100 of his cases involved fake coins but that the Secret Service would pursue them as it would fake paper money.
On another panel, Diamond State Depository President Michael Clark urged the subcommittee to authorize a one-ounce palladium bullion coin because the U.S. was the fifth largest palladium producer and such a coin would maintain U.S. jobs.
Citizens Coinage Advisory Committee Chair Gary Marks advised the subcommittee of his establishment of a CCAC subcommittee to look into design quality issues.
National Automatic Merchandising Association Chairman Craig Hesch pointed out the high costs of changing mechanisms on vending machines should coin compositions change or new note designs appear.
Members would have to pay $530 million to retrofit machines.