From Our Scrapbook
Recent Articles

  • Notes and Tangents on The Economy ...[Friday, January 2, 2009]

  • The Secret is Out! ...[Friday, December 19, 2008]

  • Keeping Track 100 Years Ago! ...[Friday, December 12, 2008]

  • Will the Real Speaker Please Stand Up? ...[Wednesday, November 26, 2008]
  • Friday, January 2, 2009
    Notes and Tangents on The Economy

    News about the economy is swirling about us. "Expect the unexpected" seems to be the rule. Recently, we read that Dubai-the megacity rising out of the desert, the country where silver (real) Rolls-Royces and indoor ski slopes are not unusual and artificial islands are dotted with multi-million dollar homes-is having a reality check. Construction of some projects has stopped, etc. In Las Vegas, grandiose casino and condominium complexes stand half-completed. On Wall Street news of the latest Ponzi scheme shares headlines with the $75 billion that the collapse of Lehman Brothers is said to have cost. And so it goes.

    In the meantime, numismatics has been doing, shall we say, okay. All of our recent auctions have seen strong demand for collector coins, tokens, medals, and paper money. We do keep an eye on certain expensive coins, and we all watch dealers' credit. On balance, it seems that numismatics is doing about as well as any other specialty of which we are aware.

    The attached are various clippings from news items we found interesting:

    Recession?

    In the latest issue of Maine Antique Digest, perhaps the leading antique publication in the nation (despite the restriction implied by its name), editor Clayton Pennington told of a recent antiques show in our own state: "Recession? Not in New Hampshire!"

    The text went on to discuss an event in Portsmouth, New Hampshire a few weeks ago that was highly successful. Then he went on to say:

    The heart of the art and antiques market is still beating, and when the conditions are right the beat can still be healthy. It isn't all doom and gloom out there; one dealer recently told Lita Solis-Cohen [a regular contributor to M.A.D.] that "doing okay is the new great." Tangible objects tend to retain value. Amid the stock market decline, Sanford Levy, of Jenkinstown Antiques, New Paltz, New York, told reporter Fran Kramer, "I only own antiques. Nothing I own went down in value last week!"

    Is America friendly to business?

    The United States has the second-highest taxation in the developed world, charging corporations 39.25% of their income. (Investor's Business Daily)

    Was the standard of living real?

    The country of Iceland has three banks, and all of them failed within ten days this past autumn. In contrast, "Last year, Iceland boasted the highest standard of living of any country, according to the United Nations." (Wall Street Journal)

    Don't go in the (financial) water

    An illustration in The Economist in a discussion of America's financial system shows a sign at a beach stating, "Warning: Dangerous Currents. No Lifeguard on Duty."

    The economy per Dave Ganz

    The following is from Numismatic News, December 2, 2008, "Under the Glass," by David L. Ganz:

    Rare coins outpace other assets' values. The most catastrophic economic cataclysm since the Great Depression still doesn't put the whole of events into perspective. The Dow Jones Industrial Average, which was a record 14,000 plus in October 2007, has had a meltdown.

    Back when I first started writing this column in 1965, if the Dow moved 10 points in any direction, it became front page news. In recent days, the Dow Jones Industrial Average has gone down over 400 points in a single day and now hangs above the 8,000 mark. Gold, which this summer hovered on a breakthrough that some thought would send it toward $1,500 and beyond, has steadily declined-but not like platinum which all but collapsed from its record breaking run to the $2,400 mountain-only to recede below $800. Gold itself is now at $715 an ounce.

    In the midst of this international calamity, Stack's 73rd anniversary sale -its historic October sale that officially opens the 2008-2009 auction season of the numismatic field-put on a multi-million dollar display in New York City.

    After that, Ganz published a study of the 1794 silver dollar, an American classic demonstrating that an example in VF grade handily outperformed other bases studied, including the Dow Jones Industrial Average and Iowa farmland.

    Friday, December 19, 2008
    The Secret is Out!
    Fortune magazine

    We as numismatists know that a carefully formed collection of coins, tokens, medals, or paper money, if held for the long term, has usually proved to be a spectacular investment when it is sold. Of course, the past is no guarantee of the future, and neither life nor numismatics come with any guarantees.

    The latest edition of Fortune magazine sports a large pile of gold coins as the feature on the cover! Perhaps the editors have discovered our secret! If so, let's all hope that what is in Wall Street stays in Wall Street. I and most other old-timers do not need any Wall Streeters on numismatic turf. That is, unless

    Unless a Wall Streeter, or anyone else interested in the world's greatest hobby, approaches numismatics with the intent to learn about coins and other items, to proceed carefully and slowly, and to become a dynamic part of what we are doing.

    Welcome, Wall Streeters-on these pre-conditions!

    PS: It is probably true to say that if a Wall Streeter formed a nice collection of $20 gold coins two years ago, and bought with care, the value of the coins would have increased since then. "What might have been," as the old saying goes.

    Friday, December 12, 2008
    Keeping Track 100 Years Ago!
    A lovely "Indian Chief" $5 note from a century ago.
    A lovely "Indian Chief" $5 note from a century ago.

    The Series of 1899 Silver Certificate features on the face the portrait of a Sioux Indian chief, commonly called by the name "Running Antelope," and more formally "Ta-to-ka-in-yan-ka." He is depicted in natural style, quite unlike the Indian Head cent of the time, which showed a female wearing a war bonnet (a male type of headdress). Study by experts such as Gene Hessler has revealed that the bonnet is of the Pawnee rather than the Sioux style, a design error. The face was engraved by G.F.C. Smillie, who also did much of the back. Star notes were issued as replacements beginning with W-805 and are rare today. Notes in this series are specifically payable in five silver dollars, as are other large-size Silver Certificates. All have a blue Treasury seal. These "Indian Chief" notes, as they are called, were produced for a long period of years, through to the early 1920s, and to the extent of 566,054,000 examples. They are very popular.

    In 1908

    The year is 1908, and George H. Blake has just published his study, United States Paper Money: A Reference List of Paper Money, Including Fractional Currency, Issued Since 1861. Heretofore there has been no book or serious guide to federal paper money, no listing to consult, although a fair amount has been published on Fractional Currency, mainly in the form of articles.

    Blake noted: "But few persons have a definite knowledge as to the legal tender status of United States coins and paper money. Perhaps the best information on this subject has been given in a recent publication by the government." He then printed the following:

    There are ten different kinds of money in circulation in the United States, namely, gold coins, standard silver dollars, subsidiary silver, gold certificates, silver certificates, Treasury notes issued under the act of July 14, 1890, United States notes (also called greenbacks and legal tenders), national-bank notes, and nickel and bronze coins. These forms of money are all available as circulation.

    While they do not all possess the full legal tender quality, each kind has such attributes as to give it currency. The status of each kind is as follows:

    Gold coin is legal tender at its nominal or face value for all debts, public and private, when not below the standard weight and limit of tolerance prescribed by law; and when below such standard and limit of tolerance it is legal tender in proportion to its weight.

    Standard silver dollars are legal tender at their nominal or face value in payment of all debts, public and private, without regard to the amount, except where otherwise expressly stipulated in the contract. "Subsidiary silver is legal tender for amounts not exceeding $10 in any one payment.

    Treasury notes of the act of July 14, 1890, are legal tender for all debts, public and private, except where otherwise expressly stipulated in the contract.

    United States notes are legal tender for all debts, public and private, except duties on imports and interest on the public debt.

    Gold certificates, silver certificates and national-bank notes are not legal tender, but both classes of certificates are receivable for all public dues, while national-bank notes are receivable for all public dues except duties on imports, and may be paid out by the government for all salaries and other debts and demands owing by the United States to individuals, corporations and associations within the United States, except interest on the public debt and in redemption of the national currency. All national banks are required by law to receive the notes of other national banks at par.

    The minor coins of nickel and copper are legal tender to the extent of 25 cents."

    In 2008

    Now we are back to the future. It is 2008. Money is much simpler:

    For paper we have Federal Reserve Notes. They are not worth much of anything in particular, except that a $20 note can be exchanged for two $10 notes, or four $5 notes, or some other combination. There is no backing in gold and silver, no guarantee. They are legal tender for everything.

    As to artistry and interest, paper money of 1908 scored high, what with the beautiful Series of 1896 "Educational Notes" in circulation, not to overlook the "Indian Chief" fives and the "Bison" tens, among others. Today, paper is rather blah, although the recent "colorized" notes are better than the others we've been using since 1929.

    For coins we have fiat money, again not worth much, except that until recently we've been told that it costs more than one cent to make a "penny" and more than five cents to make a nickel. Now that the Chinese have stopped gobbling up metal on the world market, prices have declined, and, presumably, these coins will continue to be made for a while.

    As to artistry and interest, coins of 1908 were a mixed bag. Most everyone loved the MCMVII High Relief double eagles, but not many were made and they quickly disappeared from circulation-indeed, virtually instantly. The Indian Head cent got high marks and ditto for the Liberty Head nickel. Barber coins were regarded as passé, as were Morgan dollars and all other gold coins except the Indian Head $10 by Saint-Gaudens. Today, coin designs are much more interesting-but that mantle of distinction falls entirely on the marvelous statehood quarters. The Sacagawea dollars are cute in their own way, but the presidential dollars could be easily mistaken for Cracker Jack prizes. Hope may beckon with the new Lincoln cents for next year, but we'll wait until we see one.

    Evolution

    The "cashless society" discussed widely in the 1960s isn't here yet, and a generation of citizens has grown from infancy to parenthood without the Paperwork Simplification Act being implemented.

    Meanwhile, in the past decade Uncle Sam has turned out huge amounts of coins and paper money. Designs have changed and will continue to change-which is part of what makes numismatics so interesting!