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.

cavus The Coin Analyst: What Can the U.S. Mint Learn From the Royal Canadian Mint?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.

golino portrait thumb The Coin Analyst: What Can the U.S. Mint Learn From the Royal Canadian Mint?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.

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.

8 Comments on "The Coin Analyst: What Can the U.S. Mint Learn From the Royal Canadian Mint?"

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  1. Scott says:

    With all due respect to Mr. Golino, the U.S. Mint is clearly CANNOT do what it wants because congress does confine its activities. According to the constitution, congress is granted the right to coin money and they take this part of their responsibility very seriously. Because of this, the Mint CANNOT just come up with a coin and sell it. For example, if you think that the Mint could extende the American Eagle program to include other designs, they can but adding the additional features like color, holograms, etc. cannot be added. It would make the final composition less than a total of 22-karats and that would be considered a violation of the law.

    Unlike the RCM, the U.S. Mint cannot come up with the concept of a circulatring commemorative. The Mint cannot honor the Olympics on a coin, raise money for charity (RCM produced a pink ribbon quarter), or even do an equivalent of the “Lucky Loonie” with the ways the laws are written.

    The U.S. Mint cannot create bi-metalic coin without a change in the law. They cannot make coins with Sworovski crystals like the RCM did. The Mint cannot make coins with themes not defined in the law (31 USC CHAPTER 51, SUBCHAPTER III – UNITED STATES MINT).

    There was once a step in the right direction with the Citizens Commemorative Coin Advisory Committee (CCCAC) who provided advice to congress as to what to do for future commemroative coins. However, when congress created the Citizens Coinage Advisory Committee (CCAC), the law just duplicated what the Commision of Fine Arts was doing without providing any value add. Gone is the advisory portion that would have helped change this situation.

    If you want to change the non-circulating legal tender (NCLT) program at the U.S. Mint, then you need to lobby congress to change the laws. Until then, your complaints are quaint but innacurate.

    • Louis Golino says:

      Scott,
      My point was that there are certain practices of the RCM that the US Mint may be able to learn from. I never suggested that the U.S. Mint produce the specific type of coins Canada makes. In addition, the laws the Mint follows are not edicts. They are developed in consultation with the Congress, and the Mint makes recommendations to the Congress on mintage levels and other things. Why do you think mintages for the first spouse series were changed several times? It was because the Mint saw the coins were selling at a slow rate and asked the Congress to modify the mintage. Also, the CCAC does not just duplicate what the CFA does. The people who serve on the CCAC come from a wide range of backgrounds, whereas the CFA mainly consists of people who have a background in fine arts. There is absolutely no law or anything else that says our Mint and Congress can’t work to issue more coins with higher quality designs, for example, which was one of my main points. Also, while I did not recommend specifically a circulating commemorative, I like the idea, and there are ways in could be created legislatively. Remember we already have a non-circulating bi-metallic commemorative. My basic points is that mints can learn from each other.

      • Scott says:

        With all due respect, the laws are edicts. Congress passes the laws it wants, when it wants, and how it wants and it does not have to listen to the Mint. For example, look at the mintage requirements for the dollar coins. It started with 33-percent had to be the Sacagawea dollars, now it is 25-percent. Even though the Secretary of the Treasury (e.g., Mint) can set mintage levels, BY LAW, 25-percent of the mintage has to be Sacagawea dollars. This is NOT something the Mint can control. This is the law and only congress can change the law.

        If you’ve read the laws congress spits out, they have specified designs (American Buffalo and the yet to be produced palladium coins), where coins should be minted, and the basic production steps. This does not have to be done by the Royal Canadian Mint. RCM is a crown corporation, owned by the queen and not an arm of the Canadian government. In fact, under Canadian law, the RCM works with the Bank of Canada to produce circulating coins on a committee that includes members of Parliament. This is not an advise and consent. Parliament is in on the process and when it gets to the chamber, changes are usually approved because, by Canadian law, they all work together.

        This is not the same as the U.S. Mint advising congress. While every department, bureau, and agency as legislative liaisons that advise congress, it is not the same working relationship as in Canada. In the U.S., it would be logically equivalent to the Mint having a seat on the Domestic Monetary Policy and Technology Subcommittee when it comes to matters of the Mint. Aside from the egos that wouldn’t like that, it’s against the separation of powers doctrine in the constitution.

        Forget the composition of the CFA and CCAC, if you look at what they do with regard to reviewing coin designs, they are doing the same thing. Both organizations review and recommend designs provided by the Mint. Both organizations make their recommendations and their recommendations are NON-BINDING! When it comes to reviewing coin designs, what’s the difference between the two organizations.

        The predecessor to the CCAC was the Citizens Commemorative Coinage Advisory Committee, CCCAC. As part of its charter, the CCCAC would recommend commemorative designs and provide input to congress on other coinage issues. The committee had representatives from the Mint and appointees from congress who were supposed to help congress pass coinage laws. In its history, it only convinced congress to pass two bills and one of them lead to the 50 State Quarters program. Congress eventually felt the CCCAC was no longer useful–read the Congressional Record of the debate, they thought that this group was really a pain in the behind–and reduced its scope to just reviewing coin designs.

        Can the Mint and congress work together? Sure… if you can get past congress’s b.s.! But in the 112th congress, where the subcommittee with direct oversight of the Mint is someone who is not a fan of the Mint, Ron Paul, what are you going to do? Thankfully, Ron Paul is retiring from the House which gives the Mint the chance at a better working relationship with congress regardless of the party that controls the House!

        The bottom line is that the while the U.S. Mint may want to do more, the change has to be made in congress because if it isn’t in the law, the U.S. Mint can not do it.

        That being said, I am in favor of changing the law to give the Mint more flexibility. I would also be in favor of changing the laws to give more strength to the CCAC to help in the process. And I would tell the president to either appoint a Mint Director or convert it to a Senior Executive Service position so there is a real leader of the organization.

        We may have to agree to disagree, but thank you for the chance to disagree.

  2. synoptic12 says:

    Always enjoy reading your articles Louis, as they are highly accurate and to the point.

  3. synoptic12 says:

    @Scott
    We believe that you have misconstrued this article, and have wandered off citing Chapter 51, which has little or no relevence to the article.
    In reality, the U.S. Mint is capable of adjoining and using other sections of the Coin Act as an advantage, and being “Legal”.
    As the U.S. Mint released the San Francisco two coin set, being advertised as an Anniversary Set, yet not being recognized as such by the U.S. Mint, the U.S. Mint was within their right to state this. There was no mention prior to releasing the aforesaid set, as for either of these coins being included in any other package. No indication was given, although the U.S. Mint ‘reserves’ the right to place an addendum on a legal legislature act, within the boundaries of any Chapter. In so doing, the U.S. Mint performed this exact feat, by including one of the above coins and a $5 Federal reserve note after the initial sets were sold. In the same respect, the U.S. Mint states that the Coin and Currency Set is an ‘unlimited’ production, with no household ordering limits. The U.S. Mint further adds that the $5 Federal reserve note will be produced at 50,000. Now, where is the double-talk, and whom is innacurate? Confined within the statues, and within the §, the “U.S. Mint Can Do Whatever It Wishes”.
    We believe that Louis Golino has worked for the Library of Congress, has printed numerous articles, some considered to be dissertations, and is a highly regarded numismitist.
    We find your words regarding the above article to be entwined around the wrong aspects, and not relevant to the article. In reality, we find you most innacurate and somewhat amusing.

    • Scott says:

      @synoptic12, the way I read the article has more to do than packaging and product offerings by extending the American Eagle Silver Bullion program, both of which they can legally do. I read it as extending the product line beyond what they are doing today. Your issue is different. Your issue is the lack of communications between the Mint and the collecting community, which I agree that it stinks.

      Also, I am not doubting Louis Golino’s credentials. I am disagreeing with him and his premise. I find it that you are taking this discussion that seriously amusing because I don’t see this as an argument. It is a disagreement amongst peers–which we can settle online or over coffee (my preferred drink these days) with the same effect!

      • synoptic12 says:

        Well Scott, you may be partially correct regarding a disagreement on the premise of ……? We really do not have issues with the U.S. Mint directly, only the dis-information which is continually being set forth gby the U.S. Mint. The lack of communication you speak of pertaining to the U.S. Mint, has encompassed most everyone, from top to bottom. There is dissension in the ranks as to what exactly the U.S. Mint bay be conceiving next. The whole ‘collecting’ community is at a loss to explain these facets undertaken by the U.S. Mint. As relating to my first presentation of facts, “The U.S. Mint has now stated that there will be 100,000 Coin and Currency Sets. Link:http://numismaster.com/ta/numis/Arti…rticleId=25563
        This in itself is not considered to be mis-communication by myself, or others, but just an example of what is coming down the road. Again, “Double-Talk” and in a certain sense, ‘mis-representation'; aside from the fact that the U.S. Mint “reserves the right”, (self-explanatory).
        The ‘dealers’ are mad, the coin collectors fuming, and the rest are stunned at what is transpiring. It is not me, it is “everyone”.
        You have delved quite deeply into so-called ‘internal’ affairs of Congress and the U.S. Mint. This really is not the premise of Louis’s article, more so an explanation of possible scenarios which could happen. Louis has clarified this in his second response quite clearly, yet you go off on a tangent speaking of the CCAC and Congress, etc. You have, or are trying to create an article which really is not part of the initial presentation by Louis Golino.
        Irrespective of this,the crux of the intended argument, as confined within the above article, relates more to the “collecting” community, not the laws of Congress.
        Finally, it somewhat amazes me, that you find my knowledge somewhat lacking, in communication by, or with the U.S. Mint. Just look at, or read all threads pertaining to the recent state of affairs by the U.S. Mint.

  4. William R. Cousert says:

    Why can’t the US mint redesign our money to keep up with inflation?

    A penny in 1900 was worth $.26 today adjusted for inflation. Why can’t we get rid of everything smaller than a quarter and introduce a $1.00, $2.00 and $5.00 coin?

    The $1.00 and $2.00 bill should go and perhaps the $5.00 bill as well.

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