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This week’s letters (09/06/11)

I am going to purchase the 2011 September 11 National Medal from the Mint. I know that this is not earth-shattering, but I would like to know if there is a difference in quality or value in purchasing a medal with either the West Point mintmark or Philadelphia mintmark? The other purchases I have made from the Mint have always had the West Point mintmark.
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Difference in value between medals of different mints?

I am going to purchase the 2011 September 11 National Medal from the Mint. I know that this is not earth-shattering, but I would like to know if there is a difference in quality or value in purchasing a medal with either the West Point mintmark or Philadelphia mintmark? The other purchases I have made from the Mint have always had the West Point mintmark.
Cynthia Heinze
Flushing, N.Y.

Editor’s note: Good question. It cuts to the heart of the collector state of mind. There is no difference between the two medals except the mintmark. It appears the novelty of the “W” mintmark induced collectors to buy almost twice as many as the “P” mintmark version. See the “Mint Statistics” page for the latest figures. Ultimately, the scarcer item is likely to be worth a bit more.

U.S. debt illusory, debt default nothing new

This could be called the “Joke of the Day,” since many people probably don’t want to believe it.
The U.S. Treasury’s debt is not real debt. Why? Because it’s debt that only requires payment by other debt. Since Aug. 15, 1971, no real, asset-backed, circulating currency has existed, or been issued by the Treasury. A few million collector gold and silver Eagles were issued, but not as circulating currency, That day in 1971 was the day the U.S. fully left the gold standard.
Why? Because even with 261 million ounces of gold, there was not then enough gold to fully back the currency. Foreign holders of U.S. currency would have exchanged all of it at prices of $35 to $45 an ounce for gold, and soon there wouldn’t have been any gold left to deliver.
The U.S. national debt had exceeded $400 billion, several times what the gold in storage would have covered at $35 an ounce. The result of growing trade deficits was a run on the gold supply. So the government shut the gold window to foreigners, and started to hoard the gold it had left.
Why? I have no answer to that. The supply of gold is insufficient to have any usefulness to the government. They have been officially broke since 1971, but were actually effectively insolvent way back in 1791, when the debt was equal to over a billion unreal, current dollars, adjusted for 2010 inflation. The government has never been without an unpaid debt since, although it came close to wiping out its debt by 1835, equivalent to $843,325 in 2010. The last time the debt was under $1 billion, measured in 2010 currency purchasing power, was in 1857, the year that the S.S. Central America steamship sank in the Atlantic ocean, with hundreds of pristine examples of America’s treasure, 1857-S uncirculated double eagles, and California gold rush ingots on board. By 1862, the U.S. began full scale repudiation by issuing non-interest bearing debt.
So now the US government mints base metal dollar coins with presidential portraits, and half ounce gold coins that have portraits of the first ladies, perhaps a subtle reminder that the presidential wives were more frugal.
Still, why mint gold coins at all? I suppose it is to eventually get rid of all that gold that sits unused in the federal vaults. That way they won’t have to back U.S. dollars in gold again. Fully backing the dollar with gold would cause an immediate depreciation of the dollar against gold. Deficit spending might be restrained, since currency inflation would require more gold to back it.
Anyway, regarding monetary defaults, both real and imagined, by the US government, I count seven: the Continental Congress currency default of Nov. 1779; the Continental Congress domestic loan default of March 1782, through 1790; the greenback default of 1862; the Liberty Bond default of 1934; the silver default in the 1960s, the end of silver certificates, 90 percent silver coinage and 40 percent silver coinage; the international gold dollar backing default on Aug. 15, 1971; and the momentary debt crisis default of 1979.
The default that probably had the most damaging impact on the world was the Liberty Bond default of 1934, which nullified the terms of U.S. government 20-year bonds due to mature in 1938, and is estimated to be equivalent to a loss of $640 billion in 2011. This even set up the scenario for the recent forfeiture of ten 1933 St. Gaudens double eagles.
By a 5-4 vote in 1935, the U.S. Supreme Court ruled that Congress had the constitutional power to nullify all contracts that included a gold clause, implying that the U.S. government has the right to seize citizen’s property without due process and without compensation. This nullification, along with the forced forfeiture of gold coins, may have worsened the Depression by curtailing foreign trade and deepening distrust of the public in the U.S. government. It may have also signalled to European autocratic rulers that injustice had become acceptable in the U.S. for purposes of expediency, and thus was tolerable elsewhere.
As Justice McReynolds, one of the four dissenting justices said, “The holder of one of these certificates was owner of an express promise by the United States to deliver gold coin of the weight and fineness established.
“Loss of reputation for honorable dealing will bring us unending humiliation; the impending legal and moral chaos is appalling.” How prophetic! Less than seven years later, the U.S. entered World War II.
Lest anyone think that the majority wholeheartedly approved of what congress did, Justice Stone, perhaps hypocritically, wrote for the majority:
“While the government’s refusal to make the stipulated payment is a measure taken in exercise of that power, this does not disguise the fact that its action is to that extent repudiation.”
So if anyone doubts that the government can and would confiscate collector gold coins for either real or imaginary emergency purposes, they had better revisit the facts of what happened in 1933, 1934 and 1935. Though, I suspect that if they try to do this kind of thing again, they might have more than just a tea party on their hands.
Gerald Perman

Question about ATB Chickasaw report term

I have been reading coin publications for over half a century, and have been buying all of the America The Beautiful 5-ounce bullion coins on the contrary opinion that collectors may someday become interested in buying them.
However, I don’t understand the second column of the “Chickasaw sales start slow” article on Aug. 16, What does “rate of canceled orders” mean? Is that collectors ordering the coins listed and then canceling the order? This is a term I have never before seen in your reports on the mint.
Perhaps other Numismatic News readers are puzzled also.
R. W. Barker
Midland, Mich.

Editor’s note: Yes, you interpreted it correctly. The rate of canceled orders is the percentage of orders placed and then canceled along with coins purchased and then returned.

Kennedy half dollars spotted during bank trip

From July 14-17, my wife and I were house and pet sitting in McDonough, Ga.
On July 16, I needed to cash a check while out browsing yard-sales, so I decided to stop at Publix in Stockbridge, because there was a Suntrust branch in the store. I approached the teller to cash the check and I noticed two Kennedy half dollars. I asked if I could have them, and the teller gladly gave them to me. When I looked at them, one was a 1964 and the other one was a 1968-D. What luck.
They are still out there to find. I love the magazine.
Carl Coleman
Warner Robins, Ga.

Differing philosophies on work and collecting
The Aug. 16 issue of Numismatic News provided find two articles for readers that displayed differing philosophies.
The first is Mr. Coctoastan’s Viewpoint, where he did not take advantage of his position to buy an old $1,000 bill. The story showed his integrity.
However, a letter from Ms. Mansfield shows a different view, as her husband took advantage of his job, along with the teller, to enhance their collection.
Where are the boundaries within job duties? Isn’t using a position as a teller, or other person who deals with money and finances, to enhance your collection akin to inside trading? Putting numismatics together with jobs that relate to money handling leads to profiteering, and I think that is something we all need to avoid.
Kenneth S. Rothschild
Address withheld

People are not awarded, they receive awards

Please inform whoever is responsible for the headline “ANA awards two in Canada” on page 55 of the Aug. 16 issue of Numismatic News that people are not “awarded”; they receive awards.
This is a fairly new corruption of the language that has come into vogue. Maybe it is being taught by illiterates to illiterates in the public school systems. I have even started hearing it in TV commercials. Please help kill this infestation before it metastasizes further.
Eric von Klinger
Sidney, Ohio

Reader encounters NN editor during visit to Iola

I really enjoy Numismatic News. I was particularly taken by the May 31, 2011 issue, where the return of a 1918 cent to general circulation was highlighted on the cover. After reading that article, I became determined to visit Iola, Wis. on my pending visit to the upper Midwest.
I arrived about noon on June 28, and went to the Crystal Cafe for lunch. The food was good, and I noticed a somewhat familiar face about six tables away. Was it the famous David Harper? The waitress confirmed that it was, so I came down to say hello and shake your hand. This almost constituted a coin collectors pilgrimage for me. Keep the Numismatic News coming.
James K. Crossfield

Old find in local Coinstar, challenge reissued

Several months ago, I challenged NN readers to find a coin, U.S. or foreign, from the reject shoot of a Coinstar counting machine that was older than the 1865 Indian Head cent I retrieved from a Coinstar machine. It seems that no one has been able to answer my challenge.
Yesterday, July 19, 2011, I visited my favorite Coinstar machine at the local grocery store, and in the reject shoot I retrieved a Canadian Beaver 5-cent piece, and several very corroded Lincoln cents.
A brief dip in some copper cleaning solution revealed that one of the Lincoln cents was actually a Flying Eagle cent in extremely worn condition, G-2 perhaps. The date and “UNITED STATES OF AMERICA” legend are barely discernible, while the worn reverse has no details of the wreath, but clearly states “ONE CENT” in the center. For the sake of my continuing challenge, I will “date” this cent at 1858.
It is a marvelous find, and it leaves me wondering: Where has this coin been over its 153 year life, and who has held it? What marvelous stories it could tell if it could talk!
Bill Tuttle
Cleveland, Ohio

Are new ATB quarters circulating or not?

I’m wondering what is going on with America The Beautiful series. My wife and I have found only two coins of the series in regular change. We still find lots of state quarters. Is the distribution locally restricted?
We live just outside Memphis Tenn., but when we traveled to Seattle last May, we didn’t see any ATB quarters there either.
David J. McNally
Memphis, Tenn.