Reasons for low or high mintage – 19th & 20th centuries

[RWB]

Reasons for low or high mintage – 19th & 20th centuries

 

A common question by collectors is “Why did the XYZ Mint produce only 250,000 cents in YYYY?”

 

Summary: The US Mint production was largely driven by demand, except where Congress had ordered certain production such as standard silver dollars. At present, demand estimates are prepared by the Federal Reserve who distribute all circulation coinage. But in the 19th century and up to the 1960s, coinage demand was strongly regionalized. Each mint was intended to produce coins for a certain part of the country, so it was possible to have a cent shortage on the West coast and a surplus on the East coast.

 

Example: In mid-1909 the Philadelphia Mint produced cents for all of the nation except the West coast and Arizona and Nevada. San Francisco produced cents for that region. During production planning, acting director O’Reilly noted a large stock of cents at the San Francisco Mint and in large bank inventories. Therefore, she ordered production of approximately 500,000 pieces at San Francisco – sufficient to meet curiosity demand and some for circulation, too. These were distributed across the West coast as planned. (Shipping from Philadelphia was expensive, and Denver was excluded because they had only 4 presses, and they were needed for other denominations.)

 

Thus, many of the unusually low or high mintages were in response to local shortage/demand.

 

Example: Franklin halves were not made at San Francisco in 1948. The reason was a large supply of halves in the western region, and Denver could produce enough extras to cover curiosity demand. (Shipping from Denver to the West coast was, by the 1940s, relatively inexpensive.)

 

[DaveG]

Roger,

 

I just have a couple of quick points:

 

1. If acting director O'Reilly ordered production of 500,000 cents at the San Francisco Mint in mid-1909 (presumably you mean for the Fiscal Year ending June 30, 1910), then why did the SF Mint strike 2.6 million cents in calendar 1909 (309,000 1909-S Indians; 484,000 1909-S VDB Lincolns and 1.8 million 1909-S Lincolns); followed by 6.0 million 1910-S Lincolns?

 

2. Demand for coinage is a good explanation for 20th century mintages (and, most likely, late 19th century mintages, as well), but I think you'll find that there were a lot of reasons driving specific mintages in the first half to two-thirds of the 19th century, which can be summarized to: available supply of bullion.

 

For example, why so few old tenor gold pieces? Overvaluation of gold in the US at the time meant that gold was more valuable as bullion than as coins, so relatively little gold was deposited at the mint.

 

Why so many (relatively speaking) Classic Head and early Coronet gold pieces? Gold coins were reduced in size in 1834, thus making gold more valuable as coins than as bullion, so relatively more gold was deposited at the mint. Also, the southern gold rush made gold more available in the US.

 

Why were so many half eagles and eagles minted in Philadelphia in 1847? The Independent Treasury Act of 1846 directed that import duties (paid in specie) be deposited at newly established sub-Treasuries instead of government accounts in commercial banks. The sub-Treasuries were directed to send their foreign coins to the Mint to be recoined into US coins (which commercial banks didn't do).

 

I won't even mention the California Gold Rush.

 

 

edited to add: hmm, maybe I should write a comprehensive article about gold and silver deposits at the various mints in the 19th century?

[Desert Gold]

Roger,

 

edited to add: hmm, maybe I should write a comprehensive article about gold and silver deposits at the various mints in the 19th century?

 

I would really enjoy reading such an article.

[RWB]

Dave - I was referring only to the new Lincoln cent design. The previous production was large enough to fill local commercial needs. 1909-S production was demand driven, but mostly for the new design....much greater than Treasury had expected due in part to the rumors about rarity/recall, etc. The large 1910-S mintage went back to regional demand.

[DaveG]

Desert Gold,

 

If all goes well, you'll get a chance to read the article (monograph?) in about 18 months.

[disme]

In the 1830s and 1840s the Treasury occasionally ordered that certain denominations

be emphasized for coinage. On May 25, 1843, for example, Treasury Secretary Spencer

notified Mint Director Patterson that quarter eagles were to be coined in larger numbers

and the striking of half eagles cut back. For eagles the Mint was instructed to coin this

denomination only when a depositor specifically requested them.

 

The rationale in this case, according to the letter, was to create a gold coinage more

readily used by the public and less likely to be exported.

[DaveG]

Ooh, Ooh!

 

Would you happen to have a copy of that letter that you can send me?

 

I would be very interested in copies of any other such letters you have.

 

Thanks in advance!

[RWB]

Dave,

$10 was more highly exported than $2.5 and $5, which were closer to real circulating gold coins. This is also the reason the two gold field mints were restricted to small denomination gold, even though the real local need was for silver.

 

I have some similar letters and will send them to you, also.

 

[DaveG]

Roger,

 

1. QDB makes the same assertion (about eagles being the export coin of choice) in his Silver Dollar Encyclopedia. It certainly makes sense, as it's easier to count fewer large coins than it is to coin more smaller coins.

 

However, I recently stumbled across Suggestions in Reference to the Metallic Currency of the United States of America (1871) by Ernest Seyd. I've only just skimmed the book briefly so far, but, in his discussion of the export of US gold coins, Seyd (an Englishman) refers to "Eagles" in such a way that it makes me think it's a generic term for US gold coins rather than a reference to a specific denomination.

 

Until I can find some confirmation one way or another, I'll have to question letters that say: "I'm enclosing $5,000 in eagles." Does the exporter really mean the package contains 500 10-dollar coins or just that the package contains $5,000 in US gold coins?

 

I'd like to assert that no motto eagles are "rarer than they otherwise might be" because so many were exported, but I won't feel comfortable making that assertion until I find some evidence to which I can point.

 

2. Not being a devotee of the C and D mints, I never focused on why they never minted a coin larger than a half eagle. I guess I always presumed that local demand (as demonstrated by the Bechtlers) was in favor of smaller gold coins and that the press or presses they had were too small to make larger coins.

 

(I guess that at some point I'll have to read Birdsall, Stautzenberger and the others, but I've got so many other things on my plate!)

 

Speaking of the need for silver coins in the South, a few years ago I found a proposed Senate Bill (S. 357 - June 7, 1838) that would have authorized the C and D mints to coin silver in the denominations of quarters and under.

 

I couldn't find any evidence that the bill was ever considered by the Senate, nor that it had been introduced into the House. I don't know where the C and D mints would have gotten silver, either.

 

By the way, the restriction of coins to quarters and smaller (and the concern in the text of the bill that the mints not harm their presses), suggested to me that their presses were too small for eagles.

 

Thanks for the letters!

[RWB]

Dave,

The two gold field mints were shipped only small presses suitable for $5 and smaller gold. I’m not sure if they could have struck quarters with those due to the greater hardness of silver alloy.

 

Re: $5,000 in eagles. In later 19th century records (including 1870s) I’ve seen the word “eagles” used in a generic sense for US $10 and $20 coin received in Europe. In earlier years, I suspect it referred to the $10 coins – but I have not read enough of the European commercial trade literature of that period to be sure. (US gold was packaged in $5,000 units regardless of denomination.)

 

[DaveG]

Roger,

 

Thanks!

[BillJones]

I couldn't find any evidence that the bill was ever considered by the Senate, nor that it had been introduced into the House. I don't know where the C and D mints would have gotten silver, either.

 

The gold ore contains silver as well which was separated from the gold ore as part of the minting process. The C and D mints did have silver available from their refining operations, but given the amount of it, the mintages would have never been very large had they been authorized.

 

Depending upon your point of view, the fact that those mints never struck silver coins could be good thing or a bad thing. It would have been a good thing from the point of view that we would have had some more silver coins to collect from the "romantic" southern mints. The bad things would have been low mintages and low survival rates, given the circulation patterns and collector indifference to mint marks in the 19th century, which would have created a string of very high priced rarities.

 

 

[BillJones]

For example, why so few old tenor gold pieces? Overvaluation of gold in the US at the time meant that gold was more valuable as bullion than as coins, so relatively little gold was deposited at the mint.

 

The 15 to 1 silver to gold ratio which was in effect from 1792 to August 1834 was too low. As a result the "old tenor" gold coins were too heavy relative their face value which did affect the level of gold consignments to the mint for coinage and lower mintages. But melting played an even great role, especially from the 1820s until the advent of the Classic Head gold coinage in 1834.

 

For example from 1829 until 1834, the Philadelphia mint produced 668,203 Capped Head, Reduced Diameter $5 gold pieces. Dave Bowers estimated in his book on type coins that no more than 762 of these coins exist today. That works out to a survival rate of just over one tenth of one percent. John Dannreuther's survival estimates taken from his book on early U.S. gold coin varieties are even lower.

 

Where did all of these early gold coins go? Many of them were exported to Europe as soon as they were minted. Many of the earlier (1795 to 1813) "old tenor" gold coins stayed in The United States which resulted in higher survival rates. The later pieces were exported.

 

From the early 1820s until 1834 the Philadelphia mint was little more than a gold smelting operation which purified the metal and stuck it into convenient gold disks of known weight and purity that were used in international trade.

 

As I collector I can tell you that this not so pretty coin, known to collectors and dealers as "the fatty," is one of the toughest type coins in the entire U.S. series. If just 1% of these coins had survived the price and availability of these coins would have been far more collector friendly.

 

[DaveG]

BillJones,

 

Even though southern gold contained some silver, apparently neither Charlotte nor Dahlonega received enough to be worth reporting.

 

The Mint Annual Reports listed all of the production of each of the mints (coins and bars) and neither Charlotte nor Dahlonega ever reported receiving any deposits of silver nor did they report producing any bars of silver, so, if the two mints had received authority to mint silver coins they would still have needed to find the necessary silver somewhere.

[RockMyAmadeus]

For example, why so few old tenor gold pieces? Overvaluation of gold in the US at the time meant that gold was more valuable as bullion than as coins, so relatively little gold was deposited at the mint.

 

The 15 to 1 silver to gold ratio which was in effect from 1792 to August 1834 was too low. As a result the "old tenor" gold coins were too heavy relative their face value which did affect the level of gold consignments to the mint for coinage and lower mintages. But melting played an even great role, especially from the 1820s until the advent of the Classic Head gold coinage in 1834.

 

For example from 1829 until 1834, the Philadelphia mint produced 668,203 Capped Head, Reduced Diameter $5 gold pieces. Dave Bowers estimated in his book on type coins that no more than 762 of these coins exist today. That works out to a survival rate of just over one tenth of one percent. John Dannreuther's survival estimates taken from his book on early U.S. gold coin varieties are even lower.

 

Where did all of these early gold coins go? Many of them were exported to Europe as soon as they were minted. Many of the earlier (1795 to 1813) "old tenor" gold coins stayed in The United States which resulted in higher survival rates. The later pieces were exported.

 

From the early 1820s until 1834 the Philadelphia mint was little more than a gold smelting operation which purified the metal and stuck it into convenient gold disks of known weight and purity that were used in international trade.

 

As I collector I can tell you that this not so pretty coin, known to collectors and dealers as "the fatty," is one of the toughest type coins in the entire U.S. series. If just 1% of these coins had survived the price and availability of these coins would have been far more collector friendly.

 

 

That is a beautiful coin. Just gorgeous.

 

It boggles the mind to know that nearly the entire mintages of these coins was wiped out. Just wiped off the face of the earth.

 

What is even more surprising...is that every single date from 1808 to 1834 has at LEAST two examples remaining...not a single date was completely wiped out.

[DaveG]

I found another of Ernest Seyd's books on line - Bullion and Foreign Exchanges Theoretically and Practically Considered (1868), which discusses "foreign exchange" (shipping bullion between cities), among other things.

 

In his discussion of shipping gold from New York to London, he uses two examples: one of fine gold bars (2,112.35 ounces worth $43,523.64) and the other of $11,000 of "United States Eagles", which he explicitly describes as two kegs, each containing $55,000 in US Double Eagles.

 

I think I'm now willing to say that "Eagles" was a generic term for US gold coins that didn't, at least in the "double eagle era", mean that exports consisted of only $10 gold pieces.