By February 15, 2012 7 Comments Read More →

The Coin Analyst: The Modern Commemorative Coin Program and the Launch of Infantry Soldier Dollars

by Louis Golino for CoinWeek

Critics often assert that too many modern U.S. commemorative coins have been issued, and that the program has been abused to raise money from surcharges. Each coin carries a surcharge that goes to non-profits groups that promote the interests of the constituency commemorated on the coins.

In fact, the U.S. Mint in recent years has only had two commemorative coin programs per year, which is not a lot.

On Thursday, February 16, the Mint will launch the first of this year’s two commemorative coin programs, the Infantry Soldier silver dollar in proof and uncirculated finishes.

In the past few years the Mint has launched its commemoratives during the same early part of the year. That may be because the coins will remain on sale until about mid-December unless they sell out early, and that gives most of the year for sales of the coins to take place.

Collectors will be happy to learn that the Mint published a notice in the Federal Register on February 9 indicating that the price of these coins will be $5 lower than the initial price announced on January 26. During the introductory period that lasts through March 19, the coins will be $44.95 for the uncirculated, and $49.95 for the proof.

There will also be a special Defenders of Freedom set limited to 50,000 units with a proof dollar and what is known as a dog tag in colorful packaging for $51.95. This item could be a big seller among patriotic American collectors and members of the military.

The second program launches a couple weeks later on March 5 with the release of the Star- Spangled Banner silver dollar and $5 gold half eagle. These coins should have broad appeal.

The designs of these coins have been received more positively than the one for the Infantry Soldier coin, especially the dollar coin that shows a classic female depiction of Liberty as well as a flag and Fort McHenry. The $5 gold piece shows a naval battle from the war of 1812 on the obverse, and part of the flag and the iconic words of our national anthem, “O Say Can You See” on the reverse.

A two-coin proof set with the dollar and gold coin will be released in addition to individual proof coins and the uncirculated dollar. There will also be a separate product with the proof dollar in special packaging.

On January 26 in the Federal Register, the Mint published pricing information for these coins, which includes a price grid for the $5 gold coin and two-coin set that includes the proof silver dollar and the $5 proof gold. Based on the current gold price tier of $1700-1750, the initial price for the proof $5 coin will be $517.15, the $5 uncirculated coin will be $507.15, and the two-coin proof set will be $567.15.

The timing of these coins is odd, especially since the coins to commemorate the war of 1812 will be issued in 2014. A lot of people feel the war of 1812 coins should have been issued this year, and that the Star-Spangled Banner pieces should have been released in 2014 since the banner is associated with the events surrounding the end of the war in 1814.

As far as the frequently made claim that the modern commemorative coin program has been abused by constituencies which lobby to earn funds through the surcharges applied to each coin, such criticism is probably exaggerated if applied to recent years.

However, it is accurate in reference to the many of the programs of the 1990’s, especially the Olympic coin programs. And it is even more accurate when applied to some of the classic commemorative coins issued before 1954, especially those issued during the 1930’s. 1936 was a year when an especially large number of coins was issued.

In addition, coins from that period were often issued for successive
years and with different mintmarks. That means that a collector trying to build a complete set of classic commemoratives has to acquire a daunting number of different issues. I prefer a type set of those coins that includes one of each different coin issued from the popular 1893 Columbian Exposition coin to the Washington-Carver halves of 1951-1954.

Getting back to the modern issues, many interesting, attractive, and significant coins have been issued in recent years such as the iconic Buffalo dollars of 2001 and Bald Eagle coins of 2008, and many others.

But the modern commemorative program also has its problems, to be sure.

First, the maximum authorized mintage levels are consistently too high. While there has been some effort to address this recently, the Congress is still enacting legislation that calls for the issuance of far too many coins given the actual demand for most issues.

A good example would be last year’s 9/11/11 medal. Although it is not technically a commemorative coin, for all practical purposes it is, especially since it has mintmarks, which do not normally appear on medals, and it may in fact have sold more units if it has been issued as a coin instead of a medal.

The Congress and the Mint vastly overestimated demand for the coins with a 2 million maximum mintage. So far the coins have sold 96,720 of the West Point coins and 62,520 of the Philadelphia coins, as of the most recently issued sales data provided by the U.S. Mint on a weekly basis. The data is current through February 13. The sales numbers for these coins have barely changed for many months.

These medals potentially appealed to a large segment of the population, but they were not advertised enough to the public at large such as in major print and other media read or seen by millions of Americans.

Many modern commemorative coins have performed poorly on the secondary market with some exceptions. A large number of issues from recent years can be purchased for a relatively small premium over melt value, especially the more common issues. Were it not for the major increase in silver prices over the past few years, many of these coins would be selling below issue price, and some already are.

The key reason for this is that too many coins are issued, making the coins very common. Even issues like the 2009 Lincoln dollar that sold out and are popular with collectors have seen their values decline, although usually not below issue price.

What frequently happens is the popular coins sell out, then their values rise for a period, but after some time, they typically decline after the dealer promotions and high interest in them end. On the other hand, issues that sell in small numbers, like last year’s Army half dollars, have appreciated handsomely.

Another factor that has depressed sales of these coins has been the often excessive premiums over melt value charged for the coins by the Mint.

The Mint seems to be learning here, and the prices of this week’s Infantry Soldier coins and next month’s SSB issues are very encouraging. With silver at roughly $34 per ounce, $45 and $50 is a reasonable price, and it compares very favorably with the trend in some other countries like Great Britain, which has repeatedly raised its issue prices.

Since purchasing commemorative coins is a gamble, lower prices help reduce the risk inherent in purchasing them. But these coins are and will likely remain very popular with collectors. I believe they should be purchased for fun or because the person, place, or issue being commemorated has some special significance or resonance for the buyer, not because of some expectation of price appreciation.

 

Louis Golino - WriterLouis Golino is a coin collector and numismatic writer, whose articles on coins have appeared in Coin World, Numismatic News, and a number of different coin web sites. His column for CoinWeek, “The Coin Analyst,” covers U.S. and world coins and precious metals. He collects U.S. and European coins and is a member of the ANA, PCGS, NGC, and CAC. He has also worked for the U.S. Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of newspapers and web sites.

About the Author:

Louis Golino is a numismatic journalist and writer specializing in modern coin issues. He has been writing a weekly column for Coin Week since May 2011 called "The Coin Analyst," which focuses primarily on modern U.S. and world coins and developments at major world mints, and is also a contributor to two magazines, American Hard Assets and the Numismatist, the American Numismatic Association's monthly publication. His work has also appeared in Coin World, Numismatic News, and various coin web sites. He collects classic and modern U.S. coins and modern world coins from a number of different countries. He first joined the ANA in the 1970's. He has also worked for the Congressional Research Service of the Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of publications. He has been writing professionally since the early 1980's.

7 Comments on "The Coin Analyst: The Modern Commemorative Coin Program and the Launch of Infantry Soldier Dollars"

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  1. I definitely am looking forward to seeing the Star Spangled Banner Coins, the silver dollar design is especially attractive in comparison with the rather poor quality of the infantry coin. Many recent commemorative coins have had some great artwork on them, including last year’s Medal of Honor gold coin and the 2008 bald eagle coins.

    I think, given the questionable quality of the infantry design, that cutting prices was a very good move by the Mint. It will be interesting to see if that helps spur sales.

    I also had no idea they’d overproduced commemorative coins during the 1930s, that’s an interesting bit of history.

  2. Louis Golino says:

    Thanks, Captain. Regarding the 1930’s coins, each coin was usually made in small numbers like 10-20,000, sometimes only 5,000, but they issued the same design for several years in a row and with different mintmarks, so overall there were lots and lots of different coins issued with the same design (even though the actual mintage of each one was small). I have heard that there are relatively few complete sets of pre-1954 coins as a result.
    I will be writing about these coins soon. Stay tuned for more!

  3. Louis Golino says:

    For anyone interested, and I know lots of people won’t be, NGC will pedigree coins from the sets if they are submitted in the original packaging. See the NGC web site for more info.

  4. Brian says:

    Thanks for the article Louis! I was wondering if by this statement, “Many modern commemorative coins have performed poorly on the secondary market with some exceptions. A large number of issues from recent years can be purchased for a relatively small premium over melt value, especially the more common issues.” you are generally referring to the silver dollars, or also the gold?

    Also, a couple of typos you may want to be aware of:

    – “The second program launches a couple weeks later on March 5 with the release of the Star- Spangled Banner silver dollar and $5 gold eagle.” That gold coin would be a $5 gold half eagle. By the way, how do you know March 5? The mint hasn’t announced anything as of yet.

    -“The timing of these coins is odd, especially since the coins to commemorate the war of 1812 will be issued in 1814.”
    I think you mean issued in 2014.

    Thanks again.

  5. Louis Golino says:

    HW: Thanks for catching those. As for the release of the Star-Spangled Banner coins the date is in the Federal Register notice that was published on Feb. 9 announcing the new, lower prices. I don’t know why the Mint does not have any info. on its online product schedule.

    On the performance of commems, it’s a somewhat complicated issue that I will explain in more detail in future articles. But overall, I am referring to the silver dollars and the gold half eagles. There are exceptions like the key date coins from 1996 and others, but that is the basic trend if you look at values overall. For gold, it is pretty much the same pattern except that gold has gone up so much that even common date coins are worth a lot more than issue price. Some are low mintage, but even many of them have not appreciated that much, except for some of the BU coins. There are sleepers and exceptions to the trend, but overall there is not much premium apart from metal price increases. But I like both series.

  6. Louis Golino says:

    I received my Infantry coins today. That is the fastest I recall ever receiving commemorative issues. The proof is very nice, especially the strike and finish. The design is better than the picture online. The BU finish is better than last year’s Medal of Honor but could be better. The finish is a bit dull compared to coins from previous years.
    If you have received your coins, please let us know what you think.

  7. Roland Sheets says:

    Mr. Galino: I have a friend who has offered to sell me his 1995/1996 36-piece Olympic set. He purchased it at issue and it contains all the 36 coins (gopld, silvere, proof, & uncirculated oins it’s original case. The entire set is pristine (coins & case). He has asked me to make an offer, but I haven’t found any information on-line about the buy or sell price of a complete set (I have found prices on individual coins, but nothing on a complete set. It is as if the sets had been broken up and sold). I called one dealer who was vague referring to prices in a “grey sheet”. I need to know what the market is offering to buy or sell such a set for – can you provide me with any information on my above questions? Thank you. R. Sheets

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