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Coin Dealer Ethics - Melting Coins for Profit

By March 12, 2008

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As most people are aware, the price of gold has reached record levels and is currently flirting with $1,000 an ounce. Silver has more than tripled in just over 3 years, rising from $6.40 in Jan. 2005 to about $20 an ounce today. Pawn shops, jewelry stores, and coin dealers are all doing a very brisk business in buying gold items from customers who want to cash in. Most of this gets melted down and/or resold fairly quickly in a market like this. But should coin dealers be melting down the very treasures they are charged to protect and conserve for future generations of collectors? Are some coins okay to melt but not others?

Case in point: in the March 10, 2008 issue of Coin World magazine, there is a cover story about a major coin dealer, David Hendrickson of SilverTowne, who says he has melted down thousands of gold coins for their bullion content. Here is the estimated number and types of coins he had melted down as of when the article was written (about 3 weeks ago):
  • Between 5,000 to 7,000 First Spouse gold coins, both Proof and Uncirculated types combined, of Martha Washington and Louisa Adams.


  • An undetermined number of First Spouse gold coins of Thomas Jefferson and Dolley Madison types


  • Between 2,000 to 3,000 S.F. Old Mint Commemorative gold coins, both Proof and Uncirculated types combined.


  • Between 5,000 to 7,000 Jamestown 400th Anniversary gold coins, both Proof and Uncirculated types combined.
Although this isn't mentioned in the Coin World article, it is widely acknowledged that tens of thousands of classic U.S. gold coins are also being dumped into the melting pot, such as the Saint-Gaudens gold Eagles and Double Eagles from the early 20th century that trade at bullion value (plus a modest commission.) Also going into to pot are the more common Liberty Head 19th century gold issues that trade around bullion value. Although nobody would go on the record with numbers, once coin dealer told me that he personally knew of more than 50,000 classic U.S. gold coins that had been melted down for their metal, just this year alone.

Silver coins might be faring a little bit better; the dealers I spoke to said that mostly what's being melted down right now in silver is the "junk" like sterling silver Franklin Mint medals and ingots, and other non-official silver such as SilverTowne bars and rounds. (This tidbit came from a non-SilverTowne source.) Another type of Mint-issued coin that is going into the melting pot by the tens of thousands is the low-grade U.S. silver that trades in bags at bullion value.

Personally, I am appalled at this mass melting of U.S. coinage. Perhaps this is an attitude found more commonly among the collectors of ancient coins than the modern coin collectors, but I see coin collectors and dealers as stewards of our national heritage. These coins can never be replaced, and coin collectors have a duty to conserve and protect this heritage to pass down to future generations. After all, we can't take them with us when we die, so melting them for bullion is just selfish and antisocial.

On the other side of the coin, however, are the folks who believe that if you pay for the coin, you own it. It's yours to do whatever you want with it, even destroy it by tossing it into the melting pot. Some folks nearer to the middle ground on this issue wouldn't personally melt their own coins (or sell them knowing for sure that was going to happen) but they don't mind people doing it because it makes their own coins rarer and more valuable in the long run.

What do you think? Are these coin-melting dealers selfish, money-grubbing scoundrels who should be ashamed of themselves, or are they fully within their rights to melt away to their heart's content? Why do you feel this way? Please share your opinion via the "comments" link below, and next week we'll have a look at what people have to say.

Update: Read the follow-up article to melting coins for profit.

Comments

March 12, 2008 at 5:00 am
(1) Yankee237 says:

I know the melting of coins, in some cases, is a federal offense, but the melting of bullion coinage I’m not sure of. Regardless I think melting a coin that would yield a better return as is would be foolish on the melters part, yes? I don’t see the advantage of melting a coin containing 1oz. of gold to create a 1oz. bar?

I’m hoping that in these comments someone will shed some light on just that. “What’s the Advantage?”

Thanks…

March 12, 2008 at 5:26 am
(2) Trace says:

I was thinking the same thing as that yankee. Whats the advantage? Isn’t an ounce of gold an ounce of gold? Unless perhaps its more valuable in the jewelry manufacturing market?

Trace

March 12, 2008 at 5:38 am
(3) Robert G says:

Susan, I agree with you for the most part. The St. Gaudens and other silver and gold coins from the 19th century are irreplacable and should be treated as National Treasures and protected against melting by federal law. These coins actually circulated meaning everyone of them has a story and is an integral part of our American History from the days following the Revolutionary War to the Great Depression and great care should be taken to save them, even the ones we consider junk. My own collection has several holed quarters, dimes, half dimes and worn coins that you can barely see Lady Liberty or the date. No, they are not valuable for investment, but as momentos of a young republic growing throughout the 19th century into the great nation she is today, these coins are valuable to me and I hope my grandson one day. On the other hand, First Spouse coins and the like are bullion coins, never meant to circulate, and are the same as bullion bars, their value based on the price of gold, not any of the criteria real coins value is based. Yes it is true modern day issues are legal tender but who would spend a $50 gold eagle worth $1000 for a tank of gas? No one. In my opinion investers can melt all the First Spouse, Eagles, etc., because they were only minted to be sold for a profit, but leave the old ones alone so future generations can enjoy them.

March 12, 2008 at 5:47 am
(4) coinycom says:

I’m glad you brought that up Yankee.
This one had me scratching my head as i read it.
I have to agree. What is the purpose?
Is the sale quicker in bars than in bullion coins? Beats me!
Should we be conserving them? I should think we should.
Especially the older coins.
Not so long ago, i was reading about a dealer who likes a certain old gold coin.
Don’t remember which one. I remembe for older coins, it was still afordable and in good supply at all coin shows. Then suddenly those coin’s dried up. The supply dwindled down to barely anything available. His question was, what was happening to the coins. All of a sudden.
That was awhile back when i read that. It could have been here on about coins.
Anyway, maybe that’s when the coins started hitting the melting pots.

I think that the melting will only make it harder for people of modest means to own any good coins in the future, as Susan said, it will drive up prices of existing coins in collections. But who will be able to own them other then the wealthy?
This closes doors to most of ever hoping to own a decent older gold coin of any type.
Not to mention the legality. That’s a gray area. Yes you own the coin. People have been arrested for defacing coins.
Melting them goes beyound defacing. That’s total destruction.
I’m not a federal attorney, so i couldn’t say what the law is on that.
The crummiest part is, where is the gold going that’s melted. To other countrys? Who are paying more for the bars.
It maybe legal. It dosn’t feel right.
Un American. Yeah i know, part of peoples freedom to do as they please to make a buck. At what future costs?
Yeah destroying our heritage. I have to agree Susan. I ain’t rich. But i couldn’t do it if i had the oppertunity.
That’s just me.
coiny

March 12, 2008 at 6:40 am
(5) Greg says:

Pretty much “DITTO” as to what has been said. I’d like to see the older ones saved, the First Spouse coins and such to me were just a way to make more money from us taxpayers, so go ahead and melt them if you can make a profit, which maybe you can in this market, but it still seems to me, coin vs bullion, coin gets top dollar.
As I said, pretty much ‘DITTO’…

March 12, 2008 at 7:03 am
(6) Joe says:

Ok you guys save save save them, why? When the prices go up it’s a good thing I can take my junk in and buy things I really want. You all may have unlimited funds but I don’t. I want to buy a 1936 proof set and if I wait till I have the cash saved up it will end up being 2x or 3x the price it is today. My idea on this is let them do it, you take advantage of the money and buy a true rarity or the closet thing to it and youíll be so much better off in the long run. What do you think when you pass your collection onÖ..gee Billy Bob saved 250 dimes and nickels or man o man a 3 legged buffalo and S VDB penny. Or whatever you get the idea.

March 12, 2008 at 8:01 am
(7) gdnp says:

What we have here is the classic battle between preservation and progress. Should a 200 year old house in New York City be preserved or torn down for a new apartment building? We want to preserve our heritage, but we also want a place to live that we can afford. Not every house is architecture meriting preservation, and not every coin ever minted needs to be saved. Silver and gold are the tip of the iceberg: there are billions of wheat pennies with more copper in them than their current value. There is also lots of sterling jewelry and flatware out there. I have bought several items as gifts on Ebay that cost less than their melt value. Again, a small loss to our heritage if these are melted, but how much are we really degraded if a set of repousse frog’s legs holders that no one wants gets melted and turned into jewelry?

I assume the motivation for melting is liquidity. A 100 ounce siver bar is probably easier to trade than a 100 ounce bag of coins. As long as there is profit to be made, arbitragers we be melting silver coins regardless of the laws.

At least until recently, there has been no law against defacing of melting coins. I can drill a hole in a coin and use it for jewelry. What is illegal is defacing a coin and then trying to spend it, such as clipping the edges of coins to remove small bits of gold. There has been talk of laws against melting coins as the value of the metal in pennies and nickels has approached their face value, but I do not know if they have passed.

If I need some cash and a dealer who melts coins offers me $1000 for my items while one who does not offers me $900, guess who I am selling to? The market will adjust. As long as the melt value exceeds the numismatic value, non-dealers will enter the field and coins will be melted until the price adjusts. Legislating against it is like trying to fix the price of 2 currencies: it simply leads to a black market.

Coin collectors have a long history of violating the law. If I am not mistaken, all these gold coins we are trying to preserve were supposed to have been turned in back in the 30′s when the US went off the gold standard. We would not have had them in the first place were it not for the scofflaws.

March 12, 2008 at 8:02 am
(8) Alan says:

Isn’t it because dealers massively overbought the first spouse coins when they came out hoping to make money with them. Now that these coins don’t sell they can either either melt them and recuperate the money to buy other stuff they can profit from or they can just sit on a bunch of gold wich doesn’t sell and keep a lot of their money tied up. It’s a business they are running so my thought is they can’t afford to have that much money tied up.

March 12, 2008 at 9:05 am
(9) Troy Sutton says:

Susan I do have to agree with you, but the truth is there are major differences between coin dealers and collectors. A dealer is in this for the profit and a collector is in it for the History, beauty, sentiment, and purity of the challenge to get that one coin. I have made some great memories with my grown children and my grand kids because of coins, they learn real history, and I get a memory that is relived every time I look at that coin or set of coins. I do hate it that some destroy coins for greed, but at the same time my coins do become rarer. I have considered selling some of my gold coins, but I can’t because I know their fate so I never get past the thought. It is truly sad, but such is life some go through the motions and some live it, as for me I love to stop and smell the roses, not when time allows, but every time!.

March 12, 2008 at 11:19 am
(10) Rob says:

“There has been talk of laws against melting coins as the value of the metal in pennies and nickels has approached their face value, but I do not know if they have passed.”

Yes, they have passed a regulation regarding melting pennies and nickels; http://www.usmint.gov/pressroom/index.cfm?flash=yes&action=press_release&ID=724

March 12, 2008 at 12:09 pm
(11) Paul says:

Save the old coins and bullion for sure.
The first spouse commemorative pieces I don’t care. It might make them rarer and actually worth collecting.
Save the classic pieces though.
http://www.coinsandsilver.com

March 12, 2008 at 12:50 pm
(12) Carl McKay says:

I am a capitalist, a lover of “free” markets. Buy low sell high works for me. I am a coin collector. I prefer to manage my collection myself. When the government becomes involved I will find a new hobby.

March 12, 2008 at 2:58 pm
(13) Bigjohn says:

If you own it, it’s yours to do with as you please. Like it or not, that’s the way it is in this capitalist democracy! However, with the appropriate groundwork being carefully thought out and implemented, Whoever is contemplating melting coin could first offer the opportunity to the masses to purchase these coins for a predetermined amount of time,while clearly stating that any unpurchased items will be melted after which he/she coulc do as they please. while this would seem to be a simplistic solution to the problem, I think this could be a step in the right direction to satisfy all concerned. A fundimental point for this to have a chance of working is that it be made crystal clear that the “melter”, by stating his/her intentions would face NO legal problems because of their actions or it will surely remain behind closed doors and everone loses! Hope I made sense.

March 12, 2008 at 6:33 pm
(14) Patrick G. says:

Correct, an ounce of gold is an ounce of gold. My guess is these clowns(that’s being kind) purchase a large number of certain coins that they believe will be very diserable at some future point in time. They pick through for the PRF69′s and PRF70′s, and they melt the rest of them (which they either break even or make a small profit depending on the quote the day they sell), and put the keepers in the vault and wait say 5 or 10 years, now that the coins are scarce, the ROI will probably be in the double digits if not triple digits.

Just a wild guess, but they are only interested in the Money and not the coins.

P:(

March 12, 2008 at 8:53 pm
(15) Mike says:

I have to wonder how you make a profit melting a coin for the gold when the coin will sell at the price of gold or a bit higher. I personally think the coins they are melting are the coins many of us can actually afford. I like to get MS-65 and better but some coins I am lucky to be able to afford AU. Melting makes little sense to me.

March 13, 2008 at 12:19 am
(16) coinycom says:

So everyone agrees it’s not a good thing, and makes no sense.
Unless the gold bars are being exported.
An exporter with a license could get around the red tape of dealing in large amounts of cash which would red flag the feds into thinking someone is laundering drug money etc..
By melting it into bars … that would stiffle that theory by the feds, it’s legit. And it’s a legal business.
The dollar has fallen against all curancys, so they could probably get alot more for the melt value, in another country.
Another theory
coiny

March 13, 2008 at 4:26 pm
(17) Mark says:

Besides being a coin collector I’m a lover (and owner) of “classic” cars from the ’50′s and ’60′s. There is a current drive to crush old cars for their scrap metal value, since cars from that era contained a lot of metal (actually many different metals). Scrap yards that formerly specialized in (or had a lot of) older cars are crushing them due to their scrap value. This takes away the supply of often VERY difficult to find parts for these cars. I believe that old coins and old cars (and buildings, etc.) should be preserved for future generations. Don’t melt the “classic” coins or crush (and melt) the classic cars until all usable parts are removed. SAVE OUR HISTORY!!! Sincerely, Mark

March 14, 2008 at 9:17 am
(18) Fred says:

Being collectors were here to protect or part of history.Schould greed take over what we dearly love? Would on of the great painters create a master piece just to destory it? I think not.

March 14, 2008 at 11:59 am
(19) Poco Zocko says:

I believe that we should Melt Down the Old Gold, Silver and Copper Coins.
Itís time to replenish/recycle all our unused items, And While we are at it Why donít start recycling some of the books at the Library (For Real I found a Set of 1995 Scoots Catalogs in my Library ). I go out and Buy a lot of Items from the banks, Store Clerks and Friends. I like to preserve them and put them in a Proper Holder. My Gas station Attended Found near Mint 2000 Silver State Quarter. I offered her $5.00 (Was not a Mint Coin) she said No. Next day I brought her a Plastic Coin holder for it.
I wish that More People would become More Passionate for History and about Coins and Not Just Greedy to make a Buck.
Poco Zocko S.A.G

March 14, 2008 at 7:25 pm
(20) coinycom says:

Ah the heck with it. Every body meet me at the statue of liberty.
It’s time to melt the old lady.
All she does is take up space in the harbor.
We’ll make a ton of money.
Who cares about history????!!!!!!!
France don’t like us anyway. That’s one way to get even.
Laugh & load.
Fill your pockets!

March 14, 2008 at 8:59 pm
(21) BoldFenianMan says:

“The dollar has fallen against all curancies, so they could probably get alot more for the melt value, in another country. Another theory.”
-coinycom (True!)

“I assume the motivation for melting is liquidity. A 100 ounce siver bar is probably easier to trade than a 100 ounce bag of coins.”-gdnp (True!)

When Goverments artificially manipulate the price of a commodities THEY are responsible for the negative effects of the black market economies they create.

March 15, 2008 at 3:59 pm
(22) bluejacket says:

The melting of coins actually concerns me regarding the intent of the “melter.”

If certain coins are unpopular and do not sell well such as the first spouce, it makes no sense to me to melt it for its weight value when a lot of these coins come with a premium attached to benefit one thing or another, or just plain “profit” for the mint.

So unless there is some other “use” for the metal that is more valuable than a coin, I would be suspicious that unscrupulous “melters” were gold plating junk and selling as “solid gold” to untrained eyes.

March 15, 2008 at 8:50 pm
(23) musings says:

First of all, those recent commemoratives are not “our history” except in the sense of their having been bought on credit for too much money. Who cares if they are melted down and made into some other commemorative series? Then consider the ancient coins which passed through the hands of our ancestors (yes, we all had ancestors living in the Ancient World). Those coins were undoubtedly mostly scrapped and melted down, they weren’t all put into future archaeological sites to be unearthed later. Similarly, some random pots of coins will survive today and be wondered at by our descendants. If the rest- “our history” – go into the melting pot, well, then they will only be following a hallowed tradition. We are no better than our fathers, and that’s, okay.

March 15, 2008 at 9:12 pm
(24) coinycom says:

Musings: Very well put.
It’s a half dozen of one, half dozen of another.
I guess there is no way to stop it.
Only intereted individuals who can afford to become conservators.
It is what it is, and we have to go along with what it is.
coiny

March 16, 2008 at 5:25 pm
(25) gdnp says:

Junk yards are not crushing old cars that have parts on them that they can easily sell for more than their scrap metal value. And coin dealers would not be melting gold coins if they could wholesale those coins for a higher price.

Trying to legislate this stuff is like Canute ordering the tide not to come in. When enough gold coins are melted the price of gold will drop or the price of the coins will rise until dealers can get more selling to a collector than to a scrap yard.

If the US government is stupid enough to give people 7 cents worth of nickle for 5 cents, they shouldn’t be surprised when nickles mysteriously start disappearing from circulation.

Pennies should just be eliminated, and nickles too. Half cents haven’t been made since 1857. I just checked a CPI calculator, and 1/2 cent in 1858 would be worth 11 cents today. If a dime is worth less than the half cents they eliminated in 1858, then surely we can do away with pennies and nickles.

Just my 2 cents ;)

March 17, 2008 at 5:53 pm
(26) l41nd14l says:

Historical treasures should be off limits for melting. The others I object to because it’s a way for the less than rich to own a little bullion, but the bottom line is they are bullion coins. Of the very few I have, I’d part with my two first spouse coins when I need money because I don’t care about them, but the one St. G I have will have to be pried from my cold dead fingers…..

March 17, 2008 at 9:18 pm
(27) coinycom says:

I sure hope they have back up generators that actually work in the White house.
If there is a black out during a cold snap.
I’d hate to think all that antiuqe furniture has to go into the fireplace, so our Prez & his first lady can keep their feet warm.
Just another thought! ;-)
coiny

March 18, 2008 at 1:01 pm
(28) anonyomous says:

why melt coins?
ifyou melt a bunch of… say war nickels then no more war nickels will be availible cheaply!
i say that no melting coins should be allowed!

March 18, 2008 at 9:12 pm
(29) Joe Gallagher says:

I guess all this foolishness will make what coins I hold more valuable over the long haul.

March 19, 2008 at 8:28 am
(30) gdnp says:

Anyone who doesn’t think that coins should be melted should feel free to buy up bags of low grade common dates that dealers can’t sell for a profit and do their part in storing these treasures for posterity. Or they can send a check to the their local coin dealer every Christmas as thanks for the charity work we are now compelling them to do.

Selling coins is a business. I do not get the impression that for most dealers it is a particularly lucrative one. Turning over one’s stock is key. In the long run, you cannot legislate markets. Communist governments tried it, and it invariably fails.

Susan says that silver coins sell for 12 to 14 times face value and has $15.47 of silver bullion. Let’s say you have $1000 face value of common date low grade (fair to good) silver coins from the 50′s and 60′s. You go to a coin show and Joe from Coin Ethics R Us offers you $1250 for them and promises not to melt them. Bob from Melt ‘em and Smelt ‘em makes no such promise but offers you $1450. You have rent to pay. Who are you going to sell to?

Let’s say you sell to Joe, and a year from now no one is buying and he has a $1400 rent payment due. Should he close up shop, or sell to Bob? Realizing, of course, that if he does close up, Bob will probably buy the stuff at the forclosure auction anyway.

March 19, 2008 at 9:22 am
(31) Susan Headley says:

gdnp,

LOL, I love your intelligent, insightful comments! I always look forward to seeing your thoughts on things! You will probably not be too surprised to learn that I am one of those people who have bags and bags (and bags and bags) of common-date mid to low grade silver and copper coins lying around in vault space that I lease. And if Things Ever Get Bad, I’ll have easy liquidity in a non-digital-money-based economy. ;) Plus, even this low-grade “junk” is going up in value more than my bank-based CD’s are right now! But I do concede your point; if it ever came down to paying the rent or feeding the kids, I would probably take the highest offer.

This isn’t really the whole point, though, is it? Isn’t there a difference between my selling my collection (or Joe the dealer selling his bags of coins) to put food on the table, versus some millionaire coin dealer engaging in wholesale melting to further line his deep pockets?

Susan Headley
About.com Guide to Coins

March 19, 2008 at 11:27 am
(32) gdnp says:

Susan,

Well said. But I could just as easily make the opposite argument: Who says the coin dealer is the millionaire and the collector is just squeaking by? I suspect often the opposite is the case. It is the collectors who have the obligation of protecting our heritage. The dealers are businessmen and women, whose function in a capitalist economy is to act as middlemen: they find inequalities in the market that allow them to buy low and sell high. This allows the market to find a new equilibrium. If we ban the melting of coins, we may find that when you go to sell your bags of common dates that no one will offer you more than 8 times face, because dealers don’t want to sit on inventory they can’t sell no matter how low the price.

How much of this heritage is worth saving? Over 2 billion (with a B, not an M) silver dimes were minted in 1964. If we saved them all, that would be enough for six 1964 dimes for every man, woman, and child in the country. You, your unborn kids, and your unborn grandkids could each have one. Just from the 1964′s

No one is melting down high relief Saint-Gaudens for bullion. Or if they are, please drop me a line and I will be happy to offer you 10% above the bullion price.

We shall see if the new high relief Saints are being melted in a few years. I doubt they will be unless massively overminted. The design is just too gorgeous.

March 23, 2008 at 7:15 am
(33) coinycom says:

Imagine throwing away 24 BILION dollars a year.
That is the amount of money Americans toss in the trash every year.
Not taking into account attrition, coins lost at the beach, in the dirt, in floods and other nataural disasters.
There are 8000 landfills in the united states. $8,000.00 dollars a day is taken to a single landfill.
I guess no one has to worry about an over abundance of collector coins lyeing around in hoards somwhere.
When there are probably tons of silver and gold coins burried in old dumps around the country.
I spose that is another reason besides our own government melting coins, that we don’t find so many old silver coins, or copper pennys in our change any more.
I cannot even contemplate the value of what’s burried in unmarked landfills coverd over by parks and golf greens.
Think of all the 18′th and 19′th century coins that got thrown out with the trash.

March 23, 2008 at 11:56 am
(34) coinhusker says:

As a long time coin collector, I cannot imagine melting down ANY coin of mine. Not even the ones where I cannot read the dates. I believe that it should be illegal to deface or mutilate any form of currency no matter what the profit possibility is. Coins were designed and produced by our government for the public to use for commerce, NOT to melt down and return to bars. It looks like many people believe that these First Spouse coins and other bullion issues are nothing more than a gold bar in a round form and the designs and what they stand for mean nothing. Just because these coins are new and plentiful doesn’t mean they should just be melted down to make a buck. How would you feel if everyone thought your favorite coin to collect was just some junk that didn’t need to exist? Should we just melt down all the St. Gaudens because they are worth more in weight than face value?

March 26, 2008 at 8:52 am
(35) gdnp says:

Coinhusker,

The government minted coins for the purpose of promoting commerce, not for artistic or historical purposes. So I could argue that taking coins out of circulation for the purposes of collecting should be banned, if the government’s original purpose was felt to be all-important. There have been, in fact, previous attempts to ban the hoarding of coins, which happens when the bullion value exceeds the face value, or to force citizens to turn in their coins. Like other regulations, these are largely ineffective. We would not, in fact, currently have any St. Gauden’s double eagles if people had turned them in back in the 30′s: they would have all been melted down for bullion!

Face value is irrelevant: current $20 face gold double eagles are sold by the mint for over $1000. What will determine whether something gets melted is whether the price a smelter offers you for the coin exceeds the price a coin dealer or collector offers you. You have the right to do what you wish with your coins: keep them, sell them, or give them away. When I come to sell my coins they will go to the highest bidder, and he or she may do with them as he or she wishes.

December 2, 2008 at 4:01 pm
(36) wow says:

don’t want coins to get melted? buy them at a higher price than their bullion value. that’s what historians and rare coin collectors do, and that’s why rare coins don’t disappear completely.

what if we used all the world’s aluminum to make a giant statue of George Bush? Would you object to its being torn down when the market prefers it be used to build airplanes?

January 7, 2009 at 5:22 pm
(37) jamesfrancis says:

I think it is pathetic, and i’m glad theyre fighting it!!!
On April 10, 2007, United States Mint Director Edmund Moy approved a final rule that generally prohibits the exportation, melting, or treatment of United States one-cent coins (pennies) and 5-cent coins (nickels), which became effective upon publication in the Federal Register on April 16, 2007. The final rule is based on the interim rule that was published on December 20, 2006, and it addressed public comments submitted in response to the interim rule. The United States Mint concluded the interim rule would be adopted as a final rule with certain changes based on the public comments and additional considerations. This measure has been implemented to protect the coinage of the United States by ensuring that sufficient quantities of 5-cent and one-cent coins remain in circulation to meet the needs of the United States. A violation of these restrictions can lead to a fine of up to $10,000, imprisonment of up to 5 years, and forfeiture of the subject coins or metal. The authority for implementing this regulation is Title 31 of the United States Code, Section 5111(d). now.

January 14, 2009 at 2:36 pm
(38) USN Ranger says:

I worked and earned and paid for my coins. They are mine no matter how I got them! I signed no agreement as to their fate. I typically buy them for value, beauty, design, and remembrance, whatever. Yes I would like others to enjoy them when I sell/give them away. But once I relinquish control, they are mine no more… free. Melt em all down if you want, keep what you want!

March 9, 2009 at 9:44 am
(39) ac says:

I agree,

One problem for people like me who want to sell inherited coins, un-graded are listed at about the same price as the current market for the raw metal.

Trying to get coins graded you pay through the nose just to have 1 coin graded and it doesn’t guarentee a sale unless they are some rare date or error.

March 25, 2009 at 5:04 pm
(40) US ARMY RETIRED says:

I recently started collecting US coins for various reasons. However, after getting into the hobby I have gained a new appreciation for the masterful art work that goes into making the die(s) for the stamping of these coins. Each coin to me is a work of art stamped out into precious metal form. A work of beauty. An expression of not just the artist, but also the artists’ pride in America. But, hey people! each coin is just an objects, nothing more. It’s a tool which we’ve humans have created to purchase things and pay taxes with. Some of us like to save and collect them and that’s okay.

Yes, I wish everyone could appreciate the beauty and historical value in their coins as I do, but not everyone does and that’s okay too! I can accept that because it’s “their coins”, “their property”, they bought it. If you want it in a measuem, buy it and donate it.

Some people buy and sell coins for a living and for making a profit, some buy coins to melt down into bullion and market the precious metal in that way. It’s been done for centuries upon centuries and it’ll be done for centuries after we’re all dead and frtilizing the trees.

I simply can find no problem with that! And, I especially feel that I have no right to tell someone else what they can and can’t do with their own property, even if I don’t like it. I can make recommendation or I can offer to buy it, but the bottom line is, “IT’S THEIR PROPERTY”. Some say it’s government property, no it isn’t. Show me their receipt and I’ll give it back. It’s the property of the individual American who worked and earned the wages to pay for it, or received it as change, or as a gift.

There’s too many people with unhealthy controlling attitudes in America these days who believe they have some self appointed right and duty to tell others how they should live and what they should do with everything that was never theirs to control. Talk about an arrogant, self inflated worth of oneself. Let me be clear, when it comes to MY property I say to that sort of person “BACK OFF” or pay my inflated price for it and you can have it.

I’m a fair man, I’ll listen to a suggestion, tell the person Thanks for the input, then I’ll consider it. After having weighed the suggestion and my desires, it is my decision to do what the heck I finally choose to do with my property that matters.

The coins I have purchased are infact mine to do with as I please, of that I’m certain. I give them away as birthday gifts, christmas gifts, anniversary gifts, etc. I put no limitations on what the receiver can or cannot do with “their” coin(s). Otherwise, if I still want to control it, how is that a gift?

Personally, I choose not to melt any of “MY” coins down but to pass them on to my Children, Grandchildren, and Great Grandchildren as historical symbols of America’s greatness, some of which I already have done with. If they want to melt them down or have them made into a necklace or a ring or something, I’m not going to call them dumb or get all depressed and crap over the fate of a stupid coin. I’m going to praise them for making a personal decision that was to their liking.

So, if you’re one of those who say it’s shameful, or just plain wrong for someone to melt down “THEIR” coins into bullion for resale, well I say “shame on you!”, it’s not yours, “BACK OFF!” Aren’t your rights and the rights of others to own and have control over your or their own property more important that a silly coin.

June 7, 2009 at 7:03 pm
(41) George says:

you say “these coins can never be replaced”. I say they can! take my 4 quarters and replace them with a dollar.

May 9, 2010 at 4:24 pm
(42) Kiwiman says:

I think there should be a law that no coin over 50 years old from the current date can be melted down. This would save the rarer coins for future generations.

October 30, 2010 at 11:07 pm
(43) Andrew Lin says:

I think one aspect a lot of people missed is that part of the value of the coin comes from the fact that it can legally be melted. If gold one-ounce coins were suddenly illegal to melt, the price (at least in legitimate markets) could drop sharply, down to its value as a collectible. This is akin to copper pre-1982 cents; you’re lucky to get 1.2 cents each for them, even though the bullion price is almost 3 cents now, simply because it’s illegal to melt.

October 30, 2010 at 11:07 pm
(44) Andrew Lin says:

I think one aspect a lot of people missed is that part of the value of the coin comes from the fact that it can legally be melted. If gold one-ounce coins were suddenly illegal to melt, the price (at least in legitimate markets) could drop sharply, down to its value as a collectible. This is akin to copper pre-1982 cents; you’re lucky to get 1.2 cents each for them, even though the bullion price is almost 3 cents now, simply because it’s illegal to melt.

November 10, 2010 at 1:12 pm
(45) johnpaul says:

doesn’t make sense to me

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