Which coin dealers inadvertently killed the 1964-D Peace dollar?
Zoins
Posts: 34,116 ✭✭✭✭✭
Ed Reiter and Roger Burdette indicate there was controversy around the 1964-D Peace dollar because some people thought it would be hoarded. These fears appeared to be justified when coin dealers offered as much as $7.50 for them leading to cancellation of the coin.
Do we know which coin dealers made the offers that led to cancellation of the coin?
This is mentioned by Ed Reiter writing for PCGS:
http://www.pcgscoinfacts.com/Coin/Detail/507956
The Mint was convinced that the coins would never circulate -- and evidence suggests that it was right. Before a single '64 silver dollar could be issued, coin dealers -- anticipating their release -- already were running ads offering them for sale at prices as high as $7.50 a piece.
It's also mentioned on Wikipedia which references @RogerB's A Guide Book of Peace Dollars:
https://en.wikipedia.org/wiki/Peace_dollar
The new pieces were publicly announced on May 15, 1965, and coin dealers immediately offered $7.50 each for them, ensuring that they would not circulate. The public announcement prompted a storm of objections. Both the public and many congressmen saw the issue as a poor use of Mint resources during a severe coin shortage, which would only benefit coin dealers. On May 24, one day before a hastily called congressional hearing, Adams announced that the pieces were deemed trial strikes, never intended for circulation.
Comments
The two articles conflict. The article by Ed Reiter said that dealers offered to sell them for $7.50.
Good point. I worked for Ed Reiter for years. I would trust his version over Wikipedia's any day.
The Wikipedia article references @RogerB's book so it would be good to check the source and correct the article if necessary. Perhaps it was quoted in error?
Either way, it seems the dealers running the ads may have caused cancellation of the coin.
Anyone known which dealers placed the ads or have a copies of the ads?
Any cause and effect was likely coincidental. Treasury consistently opposed minting the dollar coins despite Congress' funding and including production in the budget. People at the mint and Treasury noted dealer speculative offers. They were also aware of the Carson Mint dollars remaining in vaults which had turned up the previous April. Further, there were pre-orders from banks in Montana that would have consumed the entire limited production. [Funding expired June 30, 1965 and there was insufficient time and capacity to make the full 45 million that were authorized.]
Research shows that a few coin dealers offered to pay up to $7.50.
Good info Roger.
Do we know which coin dealers were involved and are there ads from that time as mentioned by Ed Reiter?
It also seems worthwhile to contact Ed Reiter regarding the discrepancy between his article and your research.
But what about his version and Roger's research?
The Wikipedia article references Roger's book and has been confirmed by Roger above.
I never understood why they didn't make Peace dollars with a 1965 date and 40% silver. They would have circulated, just as the Kennedy halves did, and the Mint would have booked substantial seigniorage on the coins. A lost opportunity for collectors, dealers, the Mint, and the general public.
My Adolph A. Weinman signature
It will be tough to contact Ed. He passed away several months ago.
RE: Specific dealers. I'll have to find my original project notebooks - they have not been digitized yet. I recall one of the dealers being in Laurel, Maryland...?
The buy vs sell discrepancy is of no importance - the Mint folks were aware of the problem and knew that not one coin - in any metal except clad - would ever circulate as money.
RE: "...40% silver." As mentioned above, they would not have circulated.
For 90% silver production, we used about the same quantity of silver for dimes, as for quarters, as for halves. Eliminating dimes and quarters in silver saved 2/3rds of silver use.
Initial ideas (described in the forthcoming article on Inco private pattern pieces) were simply to cut the silver proportion or change to a ternary alloy that looked like 90% silver but had less than half that amount. By the time commercial prices had settled and Congress could act, that was not a viable option. The 40% half was kept as a token sop to silver states.
Sure they would have. Forty-five million 40% silver dollars would have been more than enough to satisfy immediate demand, since they would not have been hoarded for their silver content. And the Mint could have struck many more, if necessary, making a profit on each additional coin struck. Over 700 million 40% Kennedy halves were struck and released in the mid to late 1960's and they circulated extensively for many years. Striking a few hundred million 40% silver dollars, at most, would have been sufficient to guarantee the same outcome for them.
My Adolph A. Weinman signature
Of course the info in the Wikipedia version was put there by smoeone other than Mr. Wiki Pedia.
Probably something more basic. Like government psyops figuring peace dollars would support the liberal fascist hippies, and jfk halves remaining top spot supporting republicans who love throwing their money at the government. Throwing shade at coin dealers is just a coverup.
My 50c.
I would like to see the advertisement for that
I am sure that silver coins would have been hoarded by some percentage of people, even beyond collectors....However, we still find silver dimes and quarters in circulation (not common though) and people - other than collectors - seem blissfully unaware of the value. Perhaps since it was 'in the news' so much at the time, it would have been widely known then and the fears justified. Cheers, RickO
RE: Overdate's comment.
While it's comforting to believe the .900 silver dollars would circulate, reality is quite different.
1) the coins were only authorized as 0.900 fine, and never at 0.400 fine.
2) The coins were not made when authorized in 1963 because Treasury did not have enough silver to meed production needs for subsidiary silver and make the dollars without disrupting the strategic reserve or buying on the open market. Open market buying would have been very odd since Treasury had, until recently, been selling silver at about 90-cents per ounce.
3) Silver dollars circulated to a very limited extent in several western states, but nowhere else. The only large user was the casino industry. Many in Congress felt that making more dollars, when there were millions still in vaults in 1963, was simply subsidizing the gaming industry.
4) The "run" on silver dollars in March-April 1964 hit Congress and Treasury hard - almost an emotional reaction. They had believed there was enough silver for another 15 years of .900 fine coins, but the obvious hoarding of dollars combined with huge commercial demand for coins and limited production of new silver meant that earlier estimates were wildly incorrect. Treasury continued to oppose making new silver dollars because the silver would have greater commercial impact in the form of small change. After all, commerce is the reason for coinage.
5) Senators from western states, primarily Montana, kept pushing for new dollar coinage, and a deal was worked out. President Johnson would order manufacture of as many as the Denver Mint could make until budget authorization expired on June 30, 1965. But by this time Congress had already frozen coin dates and businesses were increasingly complaining about small change shortage.
6) By the time tests were complete at Philadelphia and the Denver, only about 7 million (max) could have been struck. The 1964 'run' had shown that not only would 7 million not last long, but that almost none would circulate in real commercial use. Pre-orders from western states, primarily Nevada this time, indicated an insatiable demand. In effect, coining silver dollars would have wasted silver that was better used for small change. President Johnson ordered and end to trial production and cancelled all coinage plans.
7) A little later, there was internal discussion about 0.400 fine dollars, but Congress stepped in and prohibited ANY coinage of dollars for 7-years. That ended the matter. Budget authorization expired midnight June 30, 1965.
This is just an outline from memory and might have minor errors. The full details are in the Peace dollar book and in the future Inco article.
@RogerB Would you ever consider offering your books on the Kindle?
Looked into it, but formatting was incompatible without almost complete rewriting.
Ebooks are a huge market. It might be worth the time to rewrite it, tbh.
I just skimmed the June, July and August 1965 "The Numismatists" looking for any ads for these, but did not see any.
Because it is a monthly, I did not expect to find any. Ads would have appeared in Coin World and Numismatic News, which are not available online.
@RogerB said: "t will be tough to contact Ed. He passed away several months ago.
RE: Specific dealers. I'll have to find my original project notebooks - they have not been digitized yet. I recall one of the dealers being in Laurel, Maryland...?"
I missed the fact or forgot (old age ?) that Ed had passed. Was it made public in the Coin News? If not, very sad. When Charles Hoskins (First Director of ANACS, and then the principal owner of the first TPGS, INSAB) passed away, there was no notification for months. Shame on the ANA! When his daughter called the ANA, she claimed she was told that no one ever heard of him!
The Maryland coin dealer you mentioned may be Bob Cohen as he may have been involved with one of these coins. I don't know if he is still alive. If so, he can add some "first-hand" information to this story!
I agree that .900 silver dollars would not have circulated. However, what I said was that .400 silver dollars would have circulated, just as the .400 Kennedy halves did. If legislation had allowed for .400 silver dollars along with .400 Kennedy halves, there would have been less blowback from opponents, and the western state senators would have gotten most of what they wanted. Instead, nobody won.
My Adolph A. Weinman signature
I was thinking of Bob Zug, but I think you're right. (see below)
Excerpts from "A Guide Book for Peace Dollars:"
"However, the coin shortage, rising price of silver and depletion of treasury metal stock made the entire enterprise look foolish. Constituents were writing letters to members of congress demanding to buy the “rare” new dollars so they could resell them at a profit. Coin collector publications were running ads from coin dealers offering to buy the new dol-lars at a significant premium. The treasury department must also have realized that if Conte’s bill became law, they could be stuck with a relatively small number of 1964 silver dollars for which there was a huge speculative demand. Adding a million or so new dollars to the 2.3 million Carson City dollars already saved because of their collector value, would only multiply the treasury’s problems. The new Peace dollars had become nothing more than an-other method for speculation in silver prices and coin values."
And
"With a persistent coin shortage in place, a date freeze in effect, upward pressure on the price of silver and congress considering removal of silver from all coinage, the Treasury Department acted on the orders of congress. Nearly every administration official connected with the situation understood its futility. Coin dealer advertisements were already offering $7.50 per coin for the new dollars, and it was agreed they would vanish into speculators’ hands the day they were released."
And
"The new, threatening, language originated with mint attorney Carl A. Landis who had been reading the mint’s subscription copy of Numismatic News Weekly. A front page ar-ticle titled “Answer the ’64 Dollar Question And You Can be $3,000 Richer” caught Landis’ attention. In it coin dealer Robert “Bob” Cohen of Bladensburg, Maryland was described as having run an advertisement in the April issue of the ANA’s magazine The Numismatist offering to buy 1964 Peace dollars for $3,000. The article claimed, “His re-search leads him to believe that 100 or more of the coins – and perhaps as many as 300 – were spirited out of the Denver Mint in 1965, during the brief period when they were being struck.”
A 40% dollar was not even in anyone's thoughts in 1963 when the budget authorization was passed. A 40% clad coin was more of a late idea and the Mint did not order any test material until December 1964.
Bob was the dealer who met with Hoskins outside of the ANACS offices. I believe this happened when ANACS was still in DC. Otherwise the story I report happened later in the 1970's with the meeting taking place outside the INSAB offices. I believe to this day that Bob showed Hoskins one of the Peace dollars and it was genuine. In any case whether ANACS or INSAB, Hoskins knew not to touch it. Remember, I never got to see it.
The whole idea of authorizing a 90% silver dollar in 1964 was totally stupid. Given the virtually universal hoarding of the new Kennedy Half Dollar, how could a rational politician think that a newly issued silver dollar, after an almost 30 year hiatus, meet any other fate? Of course we were dealing with Lyndon Johnson, who was anything but rational until he was out of office after a couple of years.
Dealers did not kill the 1964 Peace Dollars; the silver situation and the perception of where it was headed made the issuance of the coin untenable.
Pres. Johnson consistently opposed issuing a new silver dollar. The order to proceed was part of a larger deal with Sen. Mansfield relating to the draft coinage act. The order to stop-work was issued very quickly after objections from one member of Congress from New Jersey. Check his papers in the Johnson Presidential Library for the back story.