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Bill calls for palladium Saint-Gaudens

gaudens.jpgAs the 110th Congress sprinted to a Memorial Day recess, a number of numismatic measures were passed by the House of Representatives May 15.
They now go to the Senate. Some deft parliamentary maneuvers and stealth actions are part of the package.

Foremost on the list is H.R. 5614, a bill whose initial appearance and very title gave the impression that the Mint was being asked to enter mainline production and reproduce a Saint-Gaudens ultra-high-relief gold double eagle. (The original bill?s name was worded this way: ?This Act shall be known as the ?Original Saint-Gaudens Double Eagle Ultra-High Relief Bullion Coin Act?).

The name suggests a gold coin that was fabled a generation ago as a production nightmare that took seven bold strikes on the Mint?s coining presses to bring up the design. The real purpose of the bill, however, was the working miners of Montana who produce palladium ? the stealth nomenclature opts for that design with the new metal for the Mint to produce.

A gold 27mm pattern replica is the design choice. As the bill?s legislative history notes, ?a 34-millimeter version was hand-struck on a standard double eagle planchet using a medal press and, because manufacturing and technical limitations prevented mass production of these pieces, this production resulted in low mintage, with fewer than two dozen specimens of the 34-millimeter version known to be in existence today.?

It goes on to note that ?a second, 27-millimeter, version was struck using two stacked $10 eagle planchets,? which is the coin being reproduced in gold for collectors. But the real purpose of the bill is not gold but to produce palladium coinage.

Tonga commenced issuing palladium coins in 1967 and other issuing countries have included Canada, the Soviet Union, France, Russia, China, Australia, and Slovakia; today, only Canada mints palladium bullion coins. The attraction of an American palladium bullion coin to Congress and the marketplace: price attractability.

Even as gold and silver and platinum have jumped to new heights 2003-2007, the price of palladium ranged between $148 and $404 per troy ounce; the average price in 2007 was $355 per troy ounce. Plus, a platinum metals group member can be had for one-seventh of the price of platinum.
Between the in the time that the bill was introduced on March 13, 2008, by Reps. Mike Castle, R-Del., and Luis Gutierrez, D-Ill, chairman of the House coinage subcommittee, a number of changes were made to the bill. A comparison between documents shows 37 deletions, 47 insertions (additions are specially marked).

There?s a new title: ?This Act shall be known as the ?Original Saint-Gaudens Double Eagle Ultra-High Relief Palladium Bullion Coin Act?.?

There?s also a new focus on investment that the legislation promotes: ?Original Saint-Gaudens Double Eagle Ultra-High Relief Numismatic Coins and Bullion Investment Coins.?

The scope of the bill is massive. Starting Jan. 1, 2009, the Mint would be required to make ?such number of $20 bullion investment coins as the Secretary [of the Treasury] may determine to be appropriate but ?not more than 15,000 of the numismatic $20 coins.?

There is also a move afoot to spread the coining of uncirculated, investment bullion coins to mints other than West Point, which has the security, the production presses, and the experience of minting difficult precious metals such as platinum ? and spreading it to the other mints.

Text of the bill is emphatic on this point for bullion investment coins: ?(C) MINT FACILITY ? Any facility of the United States Mint may be used to strike coins minted pursuant to paragraph (1)(A) other than the United States Mint at West Point, New York.?

Collector coins are another story. The bill requires that ?the obverse and reverse of the coins minted and issued? bear a familiar design: ?exact replicas of the original obverse and reverse designs by Augustus Saint-Gaudens which appear on the famous 27-millimeter version of the 1907 double eagle ultra-high relief gold piece.?

Included in this specification: ?the edge of the coin shall have all appropriate raised lettering in the same manner as the original coin.? Collector coins ?may only be struck at the United States Mint at West Point, New York.? No fractional issues are permitted.

Because issuance of coinage rests in the discretion of the secretary of the Treasury (who in turn has delegated it to the Mint director), ?if a gold bullion coin that bears the same design as the ultra-high relief numismatic coins is issued,? each palladium coin ?may only be issued in a set containing 1 of each such coins.?

Congress wants it done its way: ?each set of coins … shall be provided in a presentation case of appropriate design,? and ?may only be issued and sold in 2009.?

Technical specs for the palladium coin is that ?coins minted … shall contain .995 pure palladium, except that during the first year of minting and issuance only, the Secretary instead may choose to mint and issue the coin in .999 pure gold.?

There?s more than a one-year negative limitation. ?If the Secretary chooses to mint and issue the coins … in gold during the first year of issue, no coins shall be minted and issued … in palladium during that year.? As to the gold coins: they ?shall be issued only in proof versions.?

Congress was busy on other coinage matters, too (see related story). Like with the palladium coinage bill, for the coins to be produced requires approval by the Senate and signature into law by the President.

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