With the international financial crisis causing the United States and Great Britain to take actions from each other’s playbooks, it might interest American readers to learn that the British Royal Mint might be privatized.
What would that mean for the U.S. Mint?
The British Royal Mint, for more than a thousand years the bedrock of English governmental financial and monetary services, may be on the verge of a privatization proposal from the Chancellor of the Exchequer, the British equivalent to Treasury secretary. The examination and consideration could have a dramatic impact on the U.S. Mint model given our tough economic times.
Revealing the possibility of privatizing the Royal Mint was a copyrighted story in a Welsh periodical. Martin Shipton of the Western Mail read through a 237 page pre-budget report from the British Treasury to find this nugget on Page 124:
“Operational Efficiency Programme (OEP) ... will be working with departments, agencies, and the Shareholder Executive to consider, for a number of Government assets, the potential for alternative business models, commercialisation, new market opportunities and, where appropriate, alternatives to public ownership.
“The work includes ... a study to explore the potential benefits of alternative future models for the Royal Mint ...”
Even with British spelling, American readers can figure out what that might lead to.
In 237 pages, that is the only reference to the Royal Mint. Shipton’s reporting revealed that, “It is understood the UK Government may put the Royal Mint at Llantrisant up for sale as part of a programme to boost revenue in the wake of the global financial crisis.”
The British Royal Mint Web site isn’t with the program, yet. On Dec. 2, it said of itself, “More than 1,000 years of experience have made the Royal Mint a leader in the art of coin making, with its high quality work recognised and valued worldwide.”
It went on to say, “The institution is also responsible for producing official medals and seals, a role that reflects its long-standing position as part of the fabric of Britain.” Like the fabric on Savile Row, it may be for sale.
Its United States counterpart was almost sold off numerous times before 1829 when Congress finally voted “Continuation of Mint at Philadelphia until otherwise provided by law.” Previously extensions were being given in two- or five-year increments – inviting congressional arguments to discontinue the Mint entirely and let the coin of foreign countries take its place.
From 1993 to 2001, Henrietta Holsman Fore looked at making public works private; she later became Mint director (and now is in the State Department). The former Mint director was a frequent adviser and participant in a wide range of the Center for Strategic and International Studies, a Washington, D.C. think tank engaged in research activities.
Rep. Jim McDermott held hearings on proposals that might lead to privatizing the Mint and invited former Mint director Jay Johnson to respond directly to proposals floating inside the Bush Administration.
Johnson at the time said, “Privatization of the U.S. Mint would reflect exactly the opposite intent of our Founding Fathers and a great disservice to the American people. The U.S. Mint was established by the U.S. Constitution, formally created in 1792 and the Mint building was the first federal building established by the new government. I believe it would demean the very sovereignty of the United States to have its coinage made by private companies. The minting of U.S. coinage is, at it’s very essence, a function of the government.”
Some blanking operations of the U.S. Mint are already privatized. The shortage of planchets for precious metal American Eagles is due in part to the inability of the private sector to provide the Mint with an adequate supply.
Privatization of the U.S. Mint would require approval of the Senate, the House and signature into law by the President in the normal law-making process.
Significantly, the U.S. Supreme Court said a century ago that “The “power to ‘coin money’... is a prerogative of sovereignty” in the Ling Su Fan v. US case, 218 U.S. 302, 310 (1920).
Whether that mettle will be tested in Britain, or the U.S. remains to be seen.