Big plans for little coin affect us all

Editor’s note: Striking dollar coins for circlation was suspended in December 2011 because the Federal Reserve had a supply of as many as 1.4 billion pieces in storage. This feature was written in 2005 just after Congress authorized the creation of the Presidential dollar coins.

Just because a coin is a fiasco does not mean the full series is not a great collection. The Sacagawea dollar is well on its way to proving that and to providing people like me something to write about indefinitely. In fact, it’s not the first as you can find no more interesting story than the Trade dollar and certainly in the minds of virtually everyone the Trade dollar was also a fiasco.

The Sacagawea dollar has a fascinating story of hard-to-believe decisions and Congress just added to it by continuing the Sacagawea dollar and requiring mintages equal to one-third of the total of the four Presidential dollars produced each year starting in 2007.

When you understand that no Sacagawea dollar has been needed for circulation since the 2001 issues were struck, suddenly required mintages perhaps in the hundreds of millions when there is no demand and to have those totals added to the totals of four Presidential dollars produced each year gives us the potential of creating a stockpile which would make the historic Morgan dollar stockpile pale by comparison.

A peculiar or simply bad decision when it comes to the Sacagawea dollar is hardly new. In fact, you can go back to the start of the Sacagawea you see one strange twist and turn after another giving everyone more than enough ammunition to question whether anyone seriously knows what they are doing when it comes to dollar coins.

It’s actually hard to know where the Sacagawea story begins. Officially it began with the United States Dollar Coin Act of 1997 which mandated changes in what were to be new dollar coins. At the time it might have seemed like a good idea as the stockpile of Susan B. Anthony dollars was drawing down. In a couple years the United States would need either more Anthony dollars, a new dollar or it would have no dollar coins so the Sacagawea dollar seemed like the way to go at the time.

To understand the situation we really have to go back further in time. The Susan B. Anthony dollar was supposed to be “The Dollar Of The Future.” That is how it was introduced but the future proved to be short as the Anthony dollar was produced for circulation in 1979 and 1980 and returned by a public who wanted nothing to do with the coins as fast as they were released.
We could debate assorted factors that may or may not have influenced the rejection of the Anthony dollar, but the basic problem was that it was too close in size to the quarter. The idea for the Anthony dollar really traced itself to the 1970s when there was a report from a group called the Research Triangle Institution explaining the great financial savings to be gained if the American public could be convinced to use dollar coins. The Congress read the report selectively as in fact, while not saying it directly, the report recognized the problem of having a one dollar coin too close in size to another denomination.

Based on the book by Michael Fey and Jeff Oxman this interactive works provides high resolution images of the Top 100 Morgan varieties!

The proof of that recognition can be seen in the fact that the report also called for the elimination of the half dollar. That would make the one dollar coin the largest circulating coin so when you reach into your pocket it would be easy to identify. The Congress has seemingly never understood that is the real issue as people want to reach into their pocket and be able to know by the size that one coin is a dime and another a dollar. By not eliminating the half dollar the Congress created a situation where the Anthony dollar could potentially be confused with both the quarter and half dollar.

With the dramatic and immediate failure of the Anthony dollar all those responsible for the claims that it would be the dollar of the future were nowhere to be found. With a huge stockpile of Anthony dollars there was no real reason to even discuss the failure as the United States had enough dollars for any immediate needs and besides those responsible certainly did not want to discuss the failure.

Slowly but surely the Anthony dollar stockpile began to decrease. In reality, there was demand from vending machine, mass transit and others who potentially would benefit from the use of a dollar coin. That demand might have been only a few million coins a year but over time it became clear that the stockpile would eventually be exhausted.

By the mid-1990s it was becoming clear that something would have to be done. As it was, the United States Dollar Coin Act of 1997 appears to have miscalculated as it called for a new dollar in 2000. In the event, the Anthony dollar coin stockpile ran out before 2000 causing the Mint to strike an emergency Anthony dollar mintage in 1999, which was not really discussed at the time, but in reality was just one more indication that lawmakers and dollar coins seem to have a terrible time getting things right.

It’s not because of a lack of trying. Clearly trying to learn from the unpleasant Susan B. Anthony experience it was decided that the new dollar would be gold in color and have a plain edge. That, lawmakers felt would avoid confusion.

Apparently lawmakers never reach into their pockets for coins. You could have made the Susan B. Anthony dollars purple and it would not have made much difference as the problem is reaching into you pocket and you can’t see colors there.

The idea of a plain edge also does not really work. The 20-cent piece had a plain edge and it was still confused with the quarter because as people reach into their pockets they do not want to fumble around trying to find a plain or reeded edge. You can imagine standing in a long Christmas shopping line causing a delay with your hand in your pants explaining, “Sorry, I just need to find one with a plain edge.” You would not only get strange looks but you would be lucky to not get slapped or arrested, yet lawmakers with the idea of a plain edge were basically saying that sort of fumbling is how you identify your coins unless you empty your pockets to sort them out.

It’s a classic case of trying to fix a problem but not really getting to the root of the difficulty. The Sacagawea dollar is 26.5 millimeters compared to the 24.3mm quarter. If there was any doubt just how close the Sacagawea and quarter are in size, the hard-to-explain and rare errors that have an obverse of a 50-state quarter and reverse of a Sacagawea dollar speak volumes as the coins while obviously errors actually look appropriate something that would never happen with a Barber quarter obverse and Morgan dollar reverse.

One advantage the Sacagawea dollar did have was a good design by Glenna Goodacre, which depicted Sacagawea, the famous guide for explorers Meriwether Lewis and William Clark on their 1804-1806 journey. The young Shoshone is depicted with her infant son Jean Baptiste being carried on her back as she functions as interpreter and guide on the famous mission. The eagle in flight reverse was the work of Thomas D. Rogers, Sr. who was a Mint engraver.

The design seemed to soften what might have been the usual criticism of the coin’s size, but even the design had an unusual and to this day not well explained situation in that as part of her pay for her fine work Goodacre received 5,000 of the dollars with a special finish.Precisely how this arrangement was made is still unknown but it was definitely irregular. With a mintage of just 5,000 pieces a 2000-P Sacagawea dollar with what is called a Goodacre finish was priced around $400 and as there are 5,000 that translate into a cool $2 million, which is pretty good pay for a design.

Of course that is the retail, but even if the coins were to be sold for 50 percent of their retail listing that still equals $1 million. Some clearly have been sold as the Professional Coin Grading Services reports having graded 416 all of which were Mint State with grades as high as MS-69. There are also some 2000-P business strikes that were produced with a 12-feather hub as had been used on some special prototypes in 1999 as opposed to the regular 13-feather reverse. The whole matter seems a little confused and perhaps a little unorthodox although certainly in the past there have been some special creations at the Mint.It’s just a case where in this instance especially the 5,000 Goodacre finish dollars seem like the sort of arrangement which does not look good under scrutiny.

The initial regular business strike mintages in 2000 were enormous with Philadelphia producing 767,140,000 not counting the special Goodacre finish 5,000, while Denver reported a production of 518,916,000 for a total well over 1.2 billion coins. It was a classic case of history repeating itself not once but twice as 2001 saw mintages of 62,468,000 in Philadelphia and 70,939,500 in Denver.

After 2001, business strikes were again suspended. Just as the Anthony coin had two years’ worth of business strikes, so too did Sacagawea.

Uncirculated coins were produced in succeeding years to sell to collectors. The very same thing had happened with the Eisenhower dollar, which saw large mintages in 1971 and 1972 only to have no coins produced for release into regular circulation in its third year of 1973.

Collector-only coinages for the Anthony dollar were killed off quickly. After this occurred in 1981. Coinage ceased until begun again for the one-year 1999 issue that ended the series.

That makes three straight dollar series that had been introduced and three straight times the first two years of production were so large and demand so small that no additional production was required in the third year except for coins needed for collectors.
It was odd as these were Mint and Federal Reserve decisions not congressional decisions and the Mint should have known better with the historical record of modern dollars. It was possible not to make four or five Sacagawea dollars for every man, woman and child in the United States, but the Mint went ahead with record dollar totals even though they should have known better.

Back in 1875 when the 20-cent piece was introduced it appears very likely that Philadelphia not believing the new denomination would work decided to produce only token numbers of the new denomination with a mintage of just 36,910 while San Francisco was producing well over 1 million and even Carson City was over 133,000. Certainly Philadelphia could have produced more and being 90 percent silver even if there was no demand the coins could have always been melted but that low mintage makes it seem very likely that they simply saw no likely demand so they kept mintages low.

With the track record of the Eisenhower and Anthony dollars, it would seem like more than enough reason to make initial Sacagawea dollar mintages modest but the Mint went to the opposite extreme producing more dollars in one year than all the Morgan dollar mintages from multiple mints combined. The Treasury wanted to be sure that every American who wanted a dollar coin could get and use them.

Wal-mart helped distribute them and an expensive $40 million advertising campaign starring George Washington tried to promote them.

As usual, Americans could not be budged from their dislike of using dollar coins in their daily lives.

The 2001 business strike totals were far lower, but still high enough to assure collectors of having all they might want to complete their sets.

At present we cannot honestly be certain if the higher prices for 2001 coins are possible based on the listed mintages or the actual coins available. At low prices, very few are going to be sent to grading services so there is really no good way to determine eventual availability.

Certainly the mintages would suggest the 2000 issues will be far more available but that assumes they were saved and we really have little proof of that at present.

In the years since 2001, the Sacagawea dollar has continued to have business strike production for collectors from both Philadelphia and Denver. They tend to be in a range from $2 to $3. The mintages just reflect collector demand, running the 3-5 million piece range, but the survival rate is basically 100 percent as all were sold to collectors. That may make these dates less expensive than you might expect although it is equally possible with future demand that the limited supplies will be exhausted and prices will start to rise. Basically as you and thousands of others are the ultimate buyers your decisions regarding collecting Sacagawea dollars will ultimately decide the future of these dates.

One very real difference between the approach of the government to the Sacagawea dollar as opposed to the Anthony is that there has been a determined effort to keep the Sacagawea dollar in production. After 1981 and the production just for sets the Anthony dollar was basically not heard from again in terms of production until 1999. The Sacagawea dollar, however, has seen regular production for collectors even if there is no need for production for regular circulation.

The most lively of the special issues have been the proofs from San Francisco. The first was the 2000-S and it tends to lag behind the others with a current price of around $10. The 2001-S, however, with a mintage of 3,082,483 has been the opposite extreme with a current Proof-65 listing of $100 while the even lower mintage 2002-S, which is at just 2,294,043 is way behind in price at $28.50. The 2003-S and 2004-S are also low mintage and their prices sit at $20 and $22.50, respectively.

What we see in the case of these proofs from San Francisco is a somewhat volatile situation. The prices in price guides are currently higher than those in the actual market.

Availability is a key point here as we know the mintages but the numbers for sale are another matter. That is likely to continue for some time so we may well see prices moving up and down and not by definition in the correct order based on the mintages.

The Presidential $1 Coin Act of 2005 will certainly have an impact but precisely what that will be is far less certain. Certainly it is codswallop to think that somehow by continuing to produce large numbers of Sacagawea dollars when they are not needed will somehow convince the American public to start using Sacagawea dollars.

If the size was less of a problem there might be some hope but there is another problem that no one has addressed. In country after country when there is a coin and a bank note of the same denomination it is the bank note that people will use. The $1 Federal Reserve Note stands in the way of the Sacagawea dollar ever seeing extensive use just as it stood in the way of the Eisenhower and Anthony dollars. If the $1 Federal Reserve Note were eliminated then people would have no choice but to use the one dollar coins, but that has not happened and Congress shows no particular interest in taking that step.

We are also in uncharted territory as the Sacagawea dollar will continue to be minted and potentially in large numbers but there will also be four new dollars depicting Presidents each year as well. Considering the fact that the United States is basically using very few dollar coins at present something may have to be done fairly quickly as you cannot force the American public to use something they do not want.

There will be some collecting of the Presidential dollars as was the case with 50-state quarters, but the situation with the Sacagawea dollar is far less certain. There will continue to be buyers for the San Francisco proofs as they are showing themselves to be good investments but the Philadelphia and Denver issues are another matter.

Precisely where we go from here remains an interesting question which is basically impossible to answer. The Sacagawea dollar has already had more than its share of interesting coins when you realize it has not even been around for a decade. Just what happens with the already issued Sacagawea dollars and those yet to come will fill in the story of an interesting coin that will make a fascinating collection. Whether the saga of the Sacagawea dollar will ultimately reach the level of the Trade dollar in terms of twists and turns is hard to predict.

Certainly after less than a decade it is off to a fast start and if the Congress continues to play a role as it did with the Trade dollar where it eliminated their legal tender status causing them to trade for their silver value and producing major problems, it is possible that the Sacagawea story not unlike the Trade dollar will be one strange event after another. That sort of history makes an already good collection even better.