By David Provost for CoinWeek…..
My intention for this series of “stories” is to present lesser known information about the US commemorative coins series derived from my original research in the records of Congress and/or the reports and correspondence of the individual coin sponsors.
The information presented will not simply be a reworking of the information presented in the standard reference works on the series. I sincerely hope you enjoy the backstories presented in this series and I welcome your comments and suggestions.
The modern US commemorative program began with as close to an ideal release as it possibly could have. The 1982 George Washington half dollar checked off all of the boxes for a great release: it celebrated a very worthy subject with unarguable national significance, it featured an attractive design by an exceptional artist, profits realized from its sale were to be used to reduce the national debt and its “program” consisted of just one coin available in proof and uncirculated versions.
Introduced shortly after the initial Washington commemorative bill, the original proposal for coins to support the 1984 Los Angeles Olympics was markedly different. So different, in fact, that had it come to fruition it might have jeopardized all future US commemorative coinage.
Preliminary details of a planned commemorative program for the 1984 Los Angeles Olympics were made public on April 30, 1981 via a joint announcement by the Los Angeles Olympic Organizing Committee (LAOOC) and the US Olympic Committee (USOC). The coinage proposal was believed to have the potential to raise $200 million or more to help finance the Games and to permanently endow the USOC.
Prior to the public announcement, LAOCC President Peter Ueberroth had visited Washington, DC to test the waters for the proposal and received cautious, but generally positive feedback. Influential Senator Alan Cranston (D-CA) was identified as a potential sponsor for the group’s coinage bill and was among those briefed on the program in advance of its public unveiling.
Though he supported the use of US commemorative coins to financially aid the Games and America’s Olympic athletes, Cranston did have questions regarding the specifics of the LAOOC proposal. Putting the questions aside for the time being, he agreed to introduce a coin bill on behalf of the Committee, believing that its concept was sound and that its implementation details could be worked out during discussions in Congress.
On May 20, 1981, Cranston introduced S 1230 for himself and Senators Edwin Garn (R-UT), Samuel Hayakawa (R-CA), Donald Riegle, Jr. (D-MI), Henry Heinz (R-PA), Ted Stevens (R-AK), Paul Laxalt (R-NV) and John Tower (R-TX). The senators included as original sponsors of the bill showcased support that reached beyond California and extended to both sides of the aisle.
S 1230 proposed a program of unprecedented size and scope – at least in the history of US numismatics. The bill described a multi-coin/multi-year program that included up to 30 million copper-nickel clad dollar coins, 22.4 million silver $10 coins, 2.4 million $50 gold coins and 1.6 million $100 gold coins. A potential 56.4 million LA Olympic commemorative coins!
Specifically, the bill called for:
• 5 designs for the clad $1 coin, available only in uncirculated versions
• 16 designs for the silver $10 coin (four designs in each of four series), each to be struck in uncirculated and proof versions
• 4 designs for the gold $50 coin (in four series), each to be struck in uncirculated and proof versions
• 4 designs for the gold $100 coin (in four series), each to be struck in uncirculated and proof versions
Proceeds from the sale of the coins were to be split between the LAOOC for staging and promoting the Games, and the USOC for its use in supporting amateur athletics.
If enacted as written, the bill would have created 29 different coin designs with 24 of them available in two versions (proof and uncirculated). A collector seeking a complete set would have had to buy 53 coins! Estimates at the time put the potential cost of a complete set of coins in the range of $5,000 to $8,000. It was a far cry from the two coins – and $19 – needed for a complete set of Washington commemorative half dollars.
S 1230 also specified that the sale and distribution of the coins was to be handled by a private marketing group rather than being managed by the US Mint. This provision would prove to be a red flag for the Treasury Department as well as for some members of Congress, and would become a major point of contention regarding the coin program as it was debated.
Cranston was not the architect of the bill’s scope or provisions; they came directly from the LAOOC and the companies it had selected to handle the marketing and distribution of the coins. The Committee had engaged the joint venture of Lazard Freres, an investment banking firm with main offices in Paris and New York, and Occidental Petroleum Corporation (OPC), an international oil and gas company, to develop the coin program. The partners were referred to as the “Coin Group” by the LAOOC.
The inclusion of Occidental Petroleum in a coin marketing venture is surprising, but its involvement was tied to the company’s politically influential CEO Armand Hammer and his long-standing business and political connections in Russia. These connections helped bring together OCP and Lazard Freres prior to the 1980 Moscow Olympics and enabled them to successfully secure international marketing rights for Moscow’s 45-coin commemorative program. The joint venture was profitable enough for the two companies to team up again in pursuit of the 1984 Olympics coin program.
The Coin Group believed a program with a large number of coins was needed to raise the funds desired by the LAOOC and USOC. It was their view that the coins needed to be marketed to a broad, non-numismatic audience and, to ensure widespread international appeal, multiple themes, designs and metallic compositions were necessary. The Coin Group’s position was that a program of just a few coins would appeal mainly to coin collectors and that such a group was not large enough to generate the needed revenue.
Prior to the 1984 Games, the Olympics were largely financed via public funds provided by the host city/nation either through allocation of tax funds or via lotteries. Traditionally, the host made huge investments in the construction of new stadiums and arenas, housing for athletes and new/updated infrastructure to handle the large crowds expected to attend the Games. Host cities always expected that direct revenue from the Games plus the post-Olympic economic benefits of the new facilities and infrastructure would cover the costs of staging the Games, but original budgets were often underestimated and financial losses were common.
Potential host cities for the 1984 Games had only to look to Montreal and the recent 1976 Olympics to understand the potential scope of financial loss. Montreal incurred a $1.5 billion deficit in 1976 – a debt it took the city 30 years to repay.
The city of Los Angeles had no interest in taking on such a financial risk. Though it was keenly interested in hosting the Olympics, it refused to be held financially liable for them. Thus, the LAOOC was forced to pursue a private financing model based on the selling of broadcast rights, corporate sponsorships, ticket sales and supplemental programs such as commemorative coins. The need to raise hundred of millions of dollars from private sources was a key factor driving the size of the LAOOC’s commemorative coin proposal.
Almost immediately, S 1230 raised objections within Congress. Though most in Congress supported the idea of providing support for US Olympic athletes via a commemorative coin, many took issue with one or more of the provisions contained in the bill.
One its most vocal critics was Representative Frank Annunzio (D-IL), Chairman of the Subcommittee on Consumer Affairs and Coinage under the House Committee on Banking, Finance and Urban Affairs. Annunzio introduced HR 3879, a competing bill to S.1230, on June 11, 1981. His bill was far smaller in scope, calling for just one silver dollar design with a maximum mintage of 25 million pieces. The bill put a stake in the ground at the opposite end of the spectrum from S 1230.
On June 18, 1981, Representative Jerry Patterson (D-CA), along with all 42 of his fellow House members from California – from both sides of the aisle – introduced HR 3958, a companion (identical) bill to S 1230. It was a show of support for their Senate colleagues Cranston and Hayakawa and signaled that defeating the Cranston bill was not going to be an easy task.
The Senate Committee on Banking, Housing, and Urban Affairs held its first Hearing on S 1230 on July 14, 1981; Senator Garn of Utah presided as Chairman.
In his opening remarks, Garn stated “I believe the broad and bipartisan support that has been demonstrated for this bill clearly indicates that Congress wants to do something to support and financially aid the 1984 Olympic Games.”
He continued, “Our athletes acquire the skill to compete in the Olympic Games without the benefit of a system which encourages and subsidizes their talent. I believe we should at least provide some financial support to the Olympic organizations responsible for staging the games and training and selecting our athletes.
“S 1230 is appealing because it both commemorates the summer Olympics scheduled to be held in Los Angeles and because proceeds from the sale of the commemorative coins would be a significant source of revenue used to help stage the Los Angeles games and aid amateur athletics...[and] because it requires absolutely no appropriations from the Federal Government.”
The first witness called to testify was Angela M. Buchanan, Treasurer of the United States.
Buchanan quickly informed the Committee of the Treasury’s support of the purpose of S 1230, “Let me first state that the Department of the Treasury wholeheartedly supports the young men and women training for the 1984 Olympic games. The personal sacrifice, discipline, and hours of training are admired and respected by all Americans…As an indication of this support, the Department of the Treasury is in favor of commemorative coins honoring the 1984 Olympic Games.”
She continued, “The Department, however, has serious reservations about the magnitude, scope, and nature of S.1230 and does not consider this bill, as proposed, to be in the best interests of the public or the Government.”
A key problem area for the Treasury was the provision in the bill that called for the private marketing of the coins – the Mint was only to strike and deliver the coins to the LAOOC. Also, the Mint was not to be a part of setting the selling price of the coins or determining the approaches to be used to market the coins. The Treasury had a long history of opposing similar bills calling for the issue of private commemorative coins and objected to S 1230 on similar grounds.
Buchanan noted, “…the Department of the Treasury, as custodian of the nation’s coins and currency, has an obligation to the American people to assure not only the quality of its coins, but also the proper and equitable distribution of its products.”
The Treasurer stated, however, that her Department was very willing to work with Congress to amend the language of S 1230 to remove its problematic requirements.
Chairman Garn responded to the Treasury’s objections by noting that the sponsors of the bill were not “married to exact provisions of this bill” but nonetheless went on to chastise Buchanan. “When I was mayor [of Salt Lake City, Utah] I used to tell my city attorney, don’t tell me why I can’t. Go figure out a legal way for me to do it. That’s the answer I want from you. That’s the answer I’d like from the Treasury on this bill. Don’t tell us why we can’t do it. Tell us how we can and how we can solve those problems and how we can have a marketing program that will make it successful so that we can aid our Olympic effort.”
The Hearing next called William Simon, the former US Secretary of the Treasury and then current Chairman of the US Olympic Committee. Simon discussed the many roles played by the USOC and how its activities went far beyond just training athletes for the Olympics. He reviewed the USOC’s far-reaching support for amateur athletics in the US and outlined how funds from the commemorative coins would help the USOC better achieve its goals.
In supporting S 1230, Simon stated “I think it’s highly appropriate that the US Government commemorate this historic once-in-a-generation event with the issuance of a series of coins.” He continued, “This commemorative coin program for the Los Angeles Olympic games will serve as a means to better achieve [the USOC’s] goals.”
Simon also voiced his support for having a private marketing group handle the sale and distribution of the coins, commenting “in my experience in the public sector as well as the private sector I have never, at least it doesn’t come to mind, heard of any activity in the Government that can be done better than in the private sector.”
Peter Ueberroth (President), Harry Usher (Executive Vice President) and J. Donald Garland III (Coin Manager) of the LAOOC were the next to testify.
Ueberroth opened his comments by stressing how the Los Angeles Olympics were being organized by a private committee that would not look to the Government – local, State or Federal – for appropriations to stage the Games. It was for this reason, he noted, the LAOOC needed to pursue programs such as the proposed commemorative coin series to help achieve its financial targets.
Regarding the private marketing of the coins via the Lazard Freres/Occidental Petroleum partnership, Ueberroth commented, “We needed a joint venture that had the wherewithal to stand in back of their agreements and promises. They entered into an agreement with us that provided no risk, absolutely no risk to the Los Angeles Olympic Organizing Committee or the US Olympic Committee. They further guaranteed to us, regardless of the success of the program, a $50 million guarantee.” This was a very compelling argument in favor of private marketing for the LAOOC as it could not expect such a guarantee from a program managed by the Mint.
Ueberroth also commented on the size and scope of the coinage proposal noting, “We feel that the program, as designed, maximizes the return for the Olympic Committee. The numbers for the series and designs are necessary” to ensure marketing success within the US and internationally.
Former Olympic athletes Wilma Rudolph, Mike Eruzione, Donna DeVarona and Bob Mathias were also present. Each recounted their Olympic experience and the positive impact it had on their life, while also articulating the need and importance of financially supporting the Olympics so that others could also share the experiences they enjoyed. As expected, each athlete expressed his or her strong support for S 1230.
Several representatives of the numismatic hobby/business were also called to testify.
George Hatie, President of the American Numismatic Association, opened the numismatic panel. He indicated that he was attending the Hearing to “express the views of the coin collectors of America.” He noted that collectors were supportive of a coin bill that would help fund the Los Angeles Olympics and that they would welcome the new commemorative coins.
Hatie stated that collectors had concerns, however, regarding the potential sacrificing of design quality in the name of volume and speed. He believed that the need for 29 new coin designs in such a short timeframe could possibly be more than the Mint could handle if it was to maintain its high standards. As a frame of reference, he commented on what he viewed as substandard design quality on some of the recent Canadian and Russian Olympic coins.
Potential pricing abuses that might occur without the involvement of the Treasury Department/US Mint were also of concern and led Hatie to recommend that the US Mint be placed in charge of the sale and distribution of the coins.
As an alternative to S 1230, Hatie offered a recommendation for a much smaller Olympic coin program, suggesting that one gold and one silver coin be struck and that each coin be made available in proof and uncirculated versions; he did not specify denominations for either coin.
Coin dealer and numismatic author Arthur Friedberg was then called. Friedberg strongly supported the bill, believing its size was not an issue, noting that “It’s the very type of program that will appeal to the public at large.” He also veered from the “party line” of his fellow numismatists regarding the size and scope of the proposed program by stating, “While the wishes of the coin collectors of this country…are important to me, I don’t feel they ought to be able to determine the way in which the first Summer Olympic games in this country in two generations should be commemorated.”
Chester Krause, President of Krause Publications, was next to speak. As others before him had, he expressed his support for a commemorative coin program to benefit the Olympics. He was critical, however, of the LAOOC’s proposal, arguing that it included all of the elements that had made the recent Olympic commemorative coin programs of West Germany (1972), Montreal (1976) and Moscow (1980) failures. He argued that even though each of the programs did not reach its sales goal, they each created a glut of unwanted collector coins in the market that depressed their numismatic value and essentially turned them into bullion pieces.
He believed each program suffered from: 1) Too many coin designs, 2) Mintages that were too high, 3) Sales periods that were too lengthy, and 4) Purchase prices for complete sets being too high.
Krause also presented an alternative coinage proposal. He suggested a program featuring three silver half dollars, available in proof and uncirculated, plus a single $10 gold coin struck in proof. The half dollars would be issued one per year in 1982, 1983 and 1984. All coins would carry a surcharge that would be divided three ways: 50% for the US Treasury, 25% for the LAOOC and 25% for the USOC. Krause estimated that sales for such a program had the potential to raise more than $231 million in surcharges.
Former ANA President Grover Criswell was not in attendance, but sent a letter to the Committee for entry into the official record of the Hearing. He supported S 1230 and stated, “I think the Olympic Coin Program as proposed in this bill offers something for every American. It is a bill designed to circulate Olympic coinage among the entire population of the country, rather than squander it among coin collectors only.” He also commented on the strong international market for American coins and believed that US coins struck to support the 1984 Olympics would be well-received around the world.
It was clear from the testimony of the four numismatists that the hobby was not united in its position regarding the merits of S 1230. It was undeniable, however, that it was supportive of a commemorative program for the 1984 Olympics in some form or fashion – everyone wanted new US commemorative coins!
In closing the Hearing, Senator Cranston commented that while he introduced the bill on behalf of the LAOOC, he continued to have questions about it – some of which were similarly raised by others during the Hearing – but was confident that a workable bill could be developed.
With the adjournment of the Hearing, Round One of the fight to secure commemorative coinage in support of the 1984 Los Angeles Olympics was over. The battle, however, was just beginning – and will be covered to its conclusion in Part 2.
© Copyright D. Provost 2014. All rights reserved. Used with permission.