Mint Considers Starting Coin Reserve

By David C. Harper

Coins are in surplus now but the Mint is thinking about a reserve of coins to provide a buffer supply in times of high demand, or unexpected disruption, Mint Director Edmund C. Moy said in an interview with Coin Chat Radio May 20.

Right now the Mint produces coins month to month to match orders from the Federal Reserve System, which oversees the banking system's supply of coins and paper currency. It has no extra supply in on hand.

"It would be nice to have a bank of coins to draw on," he said.

During some recent months the orders for coins exceeded the Mint's capacity to produce them, Moy pointed out. A reserve of coins would allow the Mint to meet comfortably this higher demand.

"We've decided that the strategic reserve was a good idea to explore," Moy explained.

"If this costs a lot of money and it's cheaper for us to find other ways to meet the demand, that's where we're going to go."

Why examine this possibility in a year when coin demand and production is expected to drop by 70 percent from the 10 billion coin level of 2008?

Moy said it is a question that first came up two years ago when the Mint's distribution center was hit by a tornado.

With Washington intervening with the automobile manufacturers in Detroit, is a coin reserve some way to keep blank and strip suppliers to the Mint in business?

Moy said at this point suppliers have not officially been part of the discussion, but he noted that if one of them is acquired by another firm or goes out of business, it could create difficulties for the Mint. 

How big a stock of coins would be needed?

Moy said that is something that is under consideration and a specific target is not yet defined.

"We were created to create coins for use in commerce. The worst thing that can happen is that we have a shortage of coins," Moy said. "It's better to have a little bit extra."

To that end, "We're studying all the past trends," he said.

Because coin demand began falling even before the current recession, has there been a paradigm shift such that future demand for coins would be lower than what used to be the case?

Moy noted that coin demand at the commercial level has been holding up and coins are used in about one-third of commercial transactions. It is the demand for checks that has been declining. 

"Checking has gone down by roughly half its volume," Moy said.

He expected fundamental underlying demand for coins to continue to hold up.

The Mint is also evaluating the impact on Mint production of what Moy called coin aggregators, a term for Coinstar, which is a business that puts coin counters in commercial establishments and allows consumers to exchange coins for store credits or paper money.

This has the effect of meeting commercial demand for coins without additional new supplies being needed from the Mint.

"We hope to make some decision about this this year," Moy said.

Should the Mint decide to proceed with the concept of a strategic reserve, he said that nickels and dimes would be good denominations to strike for inclusion in it because so few of them have been struck this year and because their designs are not changing regularly as is the case for quarters and dollars.

This might be a warning to collectors who are drooling over the current relatively low mintages so far this year and the prospect that no more nickels and dimes will be produced.

Mint Releases Guam Quarter May 26

by U.S. Mint

Collectors may begin placing their orders for bags and rolls of Guam commemorative quarter-dollar coins on May 26, at noon Eastern Time.  The bags and rolls contain general circulating quality coins struck on the production floors at the United States Mint facilities at Denver and Philadelphia. 

The bags of Guam quarters are packaged in 100-coin bags ($32.95) and 1,000-coin bags ($309.95).  Each bag has a tag identifying the mint of origin and "GU."

The two-roll sets ($32.95) include one roll each of 40 coins bearing the "D" and "P" mint marks.  The distinctive packaging displays the mint of origin, "GU" and the dollar value of the contents. 

Both options display the genuine United States Mint logo. 

The Guam quarter-the third coin in the 2009 District of Columbia and U.S. Territories Quarters Program-is scheduled for release by the Federal Reserve on May 26.  The coin's reverse (tails side) design depicts the outline of the island, a flying proa (a seagoing craft built by the Chamorro people), and a latte stone (an architectural element used as the base of homes).  Inscriptions on the coin's reverse include GUAM and Guahan I Tanó ManChamorro, which means "Guam - Land of the Chamorro."

Mint Launches John Tyler Dollar at 10th President’s Home

by U.S. Mint

The United States Mint celebrates a new $1 coin today to honor John Tyler, the 10th President of the United States.  Former President Tyler's grandson, Harrison Tyler, joined United States Mint Deputy Director Andy Brunhart to celebrate the coin's release.  The event took place at Sherwood Forest Plantation, the home of President Tyler.  The official launch of the coin into general circulation is May 21.

"The John Tyler Presidential $1 Coin is the 10th coin issued by the United States Mint to honor those who have served in our Nation's highest office," Brunhart said.  "Americans will be reminded of President Tyler's contributions each time they use the coin, and we hope that will be often.  The Presidential $1 Coins are convenient to use for everyday commerce and 100 percent recyclable.  They also are great teaching tools." 

Brunhart and Tyler gave each child under 18 years old a new John Tyler Presidential $1 Coin to commemorate the event. There was no coin exchange at the event.  However, collectors may purchase rolls of John Tyler Presidential $1 Coins beginning at noon Eastern Time on May 21, at www.usmint.gov or by calling 1-800-USA-MINT (872-6468).  Hearing- and speech-impaired customers may order by calling 1-888-321-MINT (6468).  There is no order limit on the rolls of Presidential $1 Coins. 

The obverse (heads side) of the John Tyler Presidential $1 Coin features a dramatic portrait of the former President and the inscriptions JOHN TYLER, IN GOD WE TRUST, 10TH PRESIDENT and 1841-1845.  The coin's reverse (tails) bears the image of the Statue of Liberty.  The inscriptions 2009, E PLURIBUS UNUM and the mint of origin (P or D) are incused on the coin's edge. 

John Tyler was born in 1790 to a prominent Virginia planter family.  Tyler, a lawyer, served as a Virginia state delegate and governor, U.S. Representative and U.S. Senator.  He also served as vice president for one month under President William Henry Harrison.  Tyler was the first vice president to take office following the death of his predecessor.  At that time, the U.S. Constitution was not clear on succession.  Rather than give up the office or accept limits on his power, President Tyler assumed all the duties and powers of an elected president, setting an important precedent.  President Tyler supported Texas statehood, a controversial proposition at the time.  He signed the bill annexing Texas three days before leaving office after his defeat in the election of 1844.  Tyler retired to his Virginia home, Sherwood Forest, named to reflect his political "outlaw" status.  He died in Richmond, Virginia, in 1862.

The Presidential $1 Coin Act of 2005 requires the Secretary of the Treasury to mint and issue Presidential $1 Coins to honor the U.S. Presidents in the order in which they served.  Four new designs will be released annually.

Mint Plans Huge Output Reduction

By David C. Harper

The U.S. Mint isn't about to tell its workers in Philadelphia and Denver to take a six-month vacation, but it could judging from the coin demand target it is aiming for in 2009.

The Federal Reserve System has placed orders for just 3 billion coins in 2009, down over 70 percent from the 2008 production level of 10.1 billion.

With approximately 1.2 billion coins struck already in the first three months of the year, that leaves eight months into which to divide production of just 1.8 billion coins. In the year 2000 the Mint was striking more than that per month.

The Mint says it will build a coin inventory, but unless the Treasury plans to stockpile the current commemorative Lincoln cents as it once did Morgan silver dollars, with its current business approach, it is hard to envisage the Mint going too far beyond projected coin needs.

Current workers, though, will embark on a six-month productivity maintenance effort that will assure future capacity. The Mint will also undertake capital improvements and maintenance that would be difficult to do with presses operating at a more normal pace.

A hiring freeze also has been imposed.

Already there is a scramble by collectors to acquire 2009 pieces because of their perceived scarcity. These target can only increase that perception.