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 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.