This article was originally printed in the latest issue of Numismatic News.
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Even as the House Financial Services committee changes over its leadership that affects many coin matters, a little-noticed change on the House Agriculture Committee may have a greater impact, especially on precious metals such as gold, silver and platinum, and base metals such as copper, zinc and nickel.
Moving to the top and likely new House Agriculture committee chair is Rep. Frank Lucas, R-Okla.
Under Rules adopted by the House of Representatives for the 108th Congress, the Committee on Agriculture’s jurisdiction extended to commodity exchanges. The committee dates to the 1830s, but the jurisdiction was amplified to include “Matters relating to trading in futures contracts for all commodities and similar instruments, including commodity options and commodity leverage contracts.”
Profiling the likely new chairman, the Washington Post referred to him in its opening paragraph as a “lifelong coin collector.” Born in 1960 (making him 50 years old), Lucas was first elected to the 103rd Congress in 1993. He was just elected to a 10th two-year term. With a B.S. from Oklahoma State University in 1982, he was a member of the Oklahoma House of Representatives 1988-1994, and made it to Washington in a special election, to fill the vacancy caused by the resignation of United States Representative Glenn English.
According to “who runs government.com,” Lucas crafted 2006 and 2007 legislation that would have mandated that any coin manufactured in 1933 or earlier by the U.S. Mint would no longer be declared federal property. (This was a free-the-1933 double eagle proposal).
In 2008, Lucas drew up a bill to replace the nickel with the half dime, saying by cutting down the size of the coin taxpayers could save $58.5 million per year. Currently, the value of the metal in the five-cent coin exceeds six cents.
There are a number of commodity exchanges that trade precious and non-precious metals. The Chicago Mercantile Exchange, for example, trades gold, silver, platinum, palladium, copper and other metals. It has absorbed other groups that sell wholesale quantities of metals, nearly all of which have a current or former coinage history.
For example, the New York Merc, or NYMEX and the Commodity Exchange or COMEX are now a part of CME Group, the world’s largest and most diverse derivatives marketplace. Their website says that they maintain a “futures market including full-size contracts on gold, silver, platinum, palladium, copper and steel; and smaller size contracts for gold (miNY 50 oz.), (E-micro 10 oz.), silver (miNY 2,500 oz.) and copper (E-mini 12,500 lbs.) ...”
To give this a dollar perspective, CME claims an average daily volume of more than 300,000 futures and options contracts traded. They say that their metals markets are the most liquid in the world for these products. One mini-contract is 33.2 troy ounces, worth about $46,000 today. The e-micro is 10 percent of a 100- ounce contract; the 100-ounce contract has a current worth of about $140,000.