The Coin Analyst: What Can the U.S. Mint Learn From the Royal Canadian Mint?
by Louis Golino for CoinWeek
The Royal Canadian Mint has always issued a wider range of collectible coins that perhaps any other world mint. For some of the Olympic games, for example, it minted a vast array of coins, of which some numismatic writers have said no one could afford to assemble a complete set. It also used to issue a lot of coins with rather high mintage levels.
But that has changed dramatically in recent years. The RCM has developed a different kind of model in which it issues even coins with expected high demand levels in small numbers that can not satisfy the appetite among collectors for those coins, thus ensuring a quick sell-out.
And it has been issuing some very attractive, interesting, and innovative pieces like the Native American Moon silver and niobium series, coins commemorating the war of 1812, the sinking of the Titanic, and the Calgary Stampede, coins with iconic Canadian wildlife like moose and silver wolves, and so forth.
As a result Canadian coins are selling very well this year, and secondary market values for these issues have been rising quickly, more so in fact than coins from most other world mints.
That model strikes me as both a good business strategy, and as an approach that respects collectors.
Meanwhile, the U.S. Mint has in recent decades had a tendency to overproduce most issues and to re-use the same coin designs too often. And when it has issued coins with new designs like commemorative issues, it has frequently received a lot of criticism for using uninspired or artistically weak designs like the 2012 Infantry coin.
To be sure, the U.S. Mint has issued plenty of attractive coins that resonate not only with collectors but with Americans as a whole like this year’s Star Spangled Banner coins. And the classic, iconic designs that appear on American silver and gold eagles are beloved by millions of collectors and bullion investors.
But our Mint has reached the point where it is time to shake things up, or it is at risk of losing more market share to foreign mints. To both increase revenue, which is declining because of all lost seigniorage income from producing fewer quarters and dollars, and to please collectors, it is time our Mint consider taking some lessons from our northern neighbors.
It is time to stop issuing more coins that the market can absorb, to improve the level of artistry on our coinage, and to stop acting as if issuing coins that are likely to increase in value is a such bad thing.
The U.S. Mint has in the past been criticized for allowing flippers and dealers to make big bucks off certain high demand, limited issue coins. And since it has said repeatedly that it is not in the business of enriching those people, it seems to have gone out of its way to do things that dilute the value of its coins on the secondary market.
Most recently, two weeks after sales concluded for the 2012 American silver eagle two-coin proof set honoring the 75th anniversary of the San Francisco Mint the Mint announced that in August it will issue a coin and currency set that will include one of the coins in the two-coin set.
This immediately set off a firestorm among coin collectors. As soon as it was confirmed to me and other numismatic writers that the set will include a 2012-S proof silver eagle, which was in the San Francisco set, collectors began expressing their displeasure at this move.
While the Mint had never specifically ruled out issuing another product with one or both of the coins in the San Francisco sets, most collectors felt like it was a breach of good faith to offer the San Francisco sets for a month and to mint them to demand, end sales at a certain level, which played a major role in buyers’ decisions about how many sets to purchase, and then turn around and offer one of the coins in another set. And they are worried the Mint might offer the reverse proof coin separately as well, which could result in massive order cancellations.
The Mint is clearly free to do whatever it wants within the confines of what Congress proscribes, but actions like this annoy and irritate collectors. This is especially the case given the fact that the only thing that separates most silver eagles apart from differences in finish is mintages and mint marks.
Moreover, the Making American History coin and currency set seems like a contrived product. It is rather unusual to celebrate the Mint’s 220th anniversary, and even if that were the objective, there is no inherent reason to use a San Francisco proof eagle and a $5 bill from 2009. It would have made more sense to use something from the Philadelphia mint, which is the one that existed 220 years ago.
In Canada, however, when the RCM decides to make a product available in another format from the original release, it generally does not increase the mintage. This is seen by collectors as showing more consideration for their collecting and investing interests. Even someone who buys one coin does not want it to decline below issue price because the Mint makes too many or keeps re-issuing it.
This same pattern can be seen in the overly high congressionally-mandated maximum mintage levels for U.S. commemoratives, which typically decline below issue price except for gold coins that usually rise in value sometime after they are issued when spot prices increase.
I understand the sensitivity of Mint officials to the criticism it received after the release of the 25th anniversary silver eagle sets, but this is not the right way to sell coins and maintain a loyal base of customers.
We need more coins with different and better designs. And while our market is much larger than the Canadian one apart from perhaps bullion coins, the Mint would do well to work with the Congress to keep mintage levels lower and work with coin designers and sculptors to make better coins.
But why not give collectors and other coin buyers at least the possibility that coins they enjoy will actually increase in value apart from metal content? In the long-run such an approach would also be good for the Mint’s business. It’s what is known as a win-win.
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.