Dave Wnuck muses about the survival of U.S. coins.

[RWB]

[font:Times New Roman]In his business newsletter Making the Grade #25, Dave Wunck of Dave Wnuck Numismatics LLC, muses about the paltry numbers of U.S. coins that have survived to the present. He wonders where they went – especially coins made from non-precious metals. He continues:[/font]

 

[font:Arial]So let's pick a coin struck [in] a metal where there was no significant melting: nickel. I know of no one who has melted quantities of nickel coins to turn them into nickel alloy ingots for speculation or investment, for example.

 

And then let’s pick a design: the Shield nickels made from 1866 through 1883.

 

There were 128 million shield nickels minted. Do even 5% of these survive? If so, that still means that several million shield nickels are still lying around somewhere.[/font]

 

[font:Times New Roman]Although it's not obvious, there actually was one place that melted large quantities of shield nickels – the U.S. Mint. One of the functions of the mints was to remove worn, damaged and mutilated coins from circulation. These came to the mints in bags and barrels from banks, sub-Treasuries and later, Federal Reserve Banks. Almost anything that resembled a U.S. coin but was not acceptable in circulation found its way to the mints and from there to the melting crucibles.

 

Over time, as new coins replaced old, and old coins became badly worn, the remains were melted by the ton. This recovered metal was used in the next generation of Liberty, or Buffalo or Jefferson nickels. (The same applied to all coin denominations.)

 

So, next time you come across a dateless Buffalo nickel remember that its metal might once have been part of a shiny new shield nickel, anxious to delight a child’s sweet tooth.[/font]

[nk1nk]

This may be a dumb question, I don't know much about the mint procedures and your book is on my list to read. If a bank turned over old worn and damaged coins it would make sense they were compensated for those coins correct? So would the mint have record of what they melted? I would imagine they would have at least kept record of each denomination quantities melted, maybe not specifically each denomination type. I hope that makes sense. If not I can try and elaborate my question.

 

Nick

[physics-fan3.14]

This may be a dumb question, I don't know much about the mint procedures and your book is on my list to read. If a bank turned over old worn and damaged coins it would make sense they were compensated for those coins correct? So would the mint have record of what they melted? I would imagine they would have at least kept record of each denomination quantities melted, maybe not specifically each denomination type. I hope that makes sense. If not I can try and elaborate my question.

 

Nick

 

Yes. The annual report of the mint director lists the coins taken in and melted each year. The mint reports are available (I think Roger put out a dvd with all of them, but parts of them are available on the interwebs).

[RWB]

Many of the 19th century annual mint reports list coins melted by denomination.

If a coin was identifiable the mint would accept it and reimburse the presenter (bank, sub-treasury, individual) for the face value. Sometimes, people mailed in defective or damaged coins for replacement.

 

Here's a random sample from the 1880 annual report. These are FY numbers, and vary considerably from year to year. (Redeemed coins were often bulk deposits by transit companies. Obsolete coins ['nickel cents'] were typically melted once the mint had enough to justify the time and expense.)

 

[Nutmeg Coin]

Has anyone done a statistical analysis with percentages of coins surviving across the denominations, on a year by year basis?

[leeg]

See Ya coin:

 

 

 

 

[Nutmeg Coin]

It's good that they have done this; we wouldn't want millions of coins sitting in warehouses just gathering dust! Thank you Uncle Sam.

[DaveG]

Just to clarify, RWB put out a DVD of the Assay Commission Reports, which is available from Wizard Coin Supply

 

Many of the Mint Annual Reports are available online at the Newman Numismatic Portal

 

The gold coins that were deposited for recoinage are just listed in the Annual Reports as an aggregate dollar amount for the year. RWB may be able to say if more detailed records exist in the Archives.

 

Generally speaking, the silver coins were also just listed in aggregate, but there were several "special" sections devoted to redeposited silver coins, I believe, for example, around 1854.

 

The Coin World Almanac (from 1995), in its discussion of gold coins, estimated the percentage of each denomination that was melted, but I don't know how they arrived at their estimate.

 

A number of coin dealers (for example, Doug Winter) provide estimated populations for the coins in which they specialize, but there just isn't enough information available to do a statistical analysis.

[Prethen]

It would be fascinating to add up the pieces noted as redeemed in these reports, over the years, to see how many of the odd denominations were melted. The impact of the meltings would be easy to see on things like 2-cent pieces and 3-cent nickels.

 

By any chance, is there any such analysis already done?

 

Great info btw, RWB!

 

[RWB]

Nutmeg Coin & Prethen:

 

I am not aware of anyone going back through the Annual Reports and building a table of the denominations and quantities melted. As Dave G noted, the reports are sometimes detailed and sometimes aggregates. Sometimes each mint is reported separately and at other times they are combined. Also, the NYAO did a lot of melting of obsolete and light weight coins, but they made bars that often went to Philadelphia for coinage use.

 

Annual Reports in the Newman Numismatic Portal have fewer scanning defects than the Google versions and are freely accessible. Their holdings should be nearly complete since I provided copies of editions not in Newman's collection going back to the 18th century including some compiled by Bob Julian.

[Conder101]

Has anyone done a statistical analysis with percentages of coins surviving across the denominations, on a year by year basis?

Such an analysis has appeared in Penny-Wise (the journal of the Early American Coppers club) for half cents and large cents

[cladking]

Most things made by man are lost and destroyed at the rate of 1% annually. Of course, this tends to be higher for things like coins that circulate and wear. It varies by denomination and size. Tiny coins are much more easily dropped or lost and then less likely to be recovered. Large denomination coins get far more effort expended in their recovery. Most of the loss is caused by fire and flood but there are obviously are more causes ranging from war to using objects for unintended purposes like melting pennies to make sculptures or as a fuse.

 

Modern coins have a far higher attrition due to their relatively low value and the ease with which they can find their way into the garbage stream.

 

Of course when a coin becomes valuable it becomes much more likely to survive since it will go into much safer storage. The attrition on something like 1804 dollars is probably less than .25% (if that).

 

The number of shield nickels in existence is likely far higher than any collector would estimate. Most of these are highly worn examples in drawers and under the woodwork but there are also significant numbers of AG to G+ coins in collections and safety deposit boxes that are mementos of previous generations. 1% attrition is huge when there are large numbers of something but after a century this represents a lot fewer coins being destroyed. Think of it this way; there just aren't that many 1965 quarters left for a 2% attrition to mean a lot of coins. It's the same for shield nickels but moreso. Millions remain but now days they're being whittled away only tens of thousands per year.

[RWB]

"...they're being whittled away only tens of thousands per year."

 

Now, that explains all those fake "Hobo Nickels" that clog truck stops and convenience store counters! --It's all "thet whittlin' what done it!"

[davewnuck]

Many of the 19th century annual mint reports list coins melted by denomination.

If a coin was identifiable the mint would accept it and reimburse the presenter (bank, sub-treasury, individual) for the face value. Sometimes, people mailed in defective or damaged coins for replacement.

 

Here's a random sample from the 1880 annual report. These are FY numbers, and vary considerably from year to year. (Redeemed coins were often bulk deposits by transit companies. Obsolete coins ['nickel cents'] were typically melted once the mint had enough to justify the time and expense.)

 

 

Wow -- once again I learned a lot from RWB's input. I had no idea the quantities were that large.

 

 

That helps quite a lot.

 

Interestingly, the actual mintage of nickels in 1880 was quite small.

 

[RWB]

Annual recoinage of all denominations was an important mint function. It helped keep defective coins out of the public's hands and maintained confidence in the quality and reliability of coins. This was, and remains, of critical economic importance.

 

Production was normally based on estimates of the quantities of coins in circulation. A small mintage of minor coins would be authorized when sub-Treasuries and major banks reported sufficient coins available to meet daily use. The expansion of local transit systems created a "sink" of nickels that ended each day outside of commerce as the transit operators counted coins. These eventually made their way back into use, but it meant that on any day, several million nickels were sitting idle. Vending machines and telephones added to this pile of sequestered coins.

 

In effect, the millions of non-circulating nickels and cents were a consequence and necessity of economic expansion.

 

PS: I enjoy Dave's newsletters. Lots of good stuff and interest.

 

PPS: The change in diameter and thickness of the 5-cent coin in 1883 was made to reduce the problem of defective coins and improve die life. Slot machines soon came into wide use and this fixed the diameter, weight and thickness at 1883 Liberty head design values.

[RWB]

Research Assignment:

 

If someone would like to compile a spreadsheet of redeemed, reissued, exchanged and melted US coins from about 1857 to 1940, I will be available to help them get started and answer questions. (Also, there is considerable information on foreign government melting of silver and gold coins in the Annual Reports.)

[Nutmeg Coin]

Thematic books such as Q David Bower's book on Double Eagles goes date by date and mintmark with "estimates" of surviving examples. However hoards tend to come out of nowhere, such as the shipwreck hoards on the type I series.

[James_OldeTowne]

Has anyone done a statistical analysis with percentages of coins surviving across the denominations, on a year by year basis?

Such an analysis has appeared in Penny-Wise (the journal of the Early American Coppers club) for half cents and large cents

I'll see whether I have that issue handy. I archive older PWs, but usually keep the last couple dozen at hand.

[Prethen]

RWB, boy I'm tempted by that research assignment. I'm especially curious to count up the melting of 2/3 cent coins. I would think (maybe wrongly) that it wouldn't be difficult to glean that information from those reports. Since I have other "distractions" in my life at the moment I will have to postpone this temptation, but it's quite possible there will be a PM from me in your future! :-)

 

P.S. This might seem dumb of me to admit, but I never realized that there was a difference in sizes between Shield and Liberty nickels!

 

[RWB]

 

I'll await your PM. The Mints were culling obsolete coins well into the 1940s. In 1942, redeemed bronze cents were used to "sweeten" the tin in new cents. (See Pattern and Experimental Coins of WW-II for details.)

 

The subject of routine recoinage by the mints is rarely considered when writers estimate current populations. Little research has been done - possibly because there is no $$ return involved in doing the work....and the work is of substantial size.

[skippy]

Based on populations of shield nickel varieties, I have done pretty well with a survival estimate of 1/10 of 1%. Someone above quoted 128 million total shield nickels, which I didn't check, but which would yield 128000 shield nickels left in existence.

 

If I'm off by as much as a factor of 10, that still leaves only about a million shield nickels. With a US population over 300 million it's not surprising that most people don't have a shield nickel (let alone two shield nickels to rub together).

 

I'm part of the problem since I'm hogging way more than my share of shield nickels. :-)

[numisport]

Just imagine the attrition rate of post 1982 Lincoln cents. I can guess that

huge quantities have already corroded and eroded away to nothing after people throw them on the ground, in the garbage, in wishing wells and you name what else would happen to something so worthless and insignificant as a zinc penny. Such a waste of taxpayer funds is criminal but that's another story. Do you think maybe only 1/2 of the hundreds of billions of cents made since 1982 still exist and have hardly any been exchanged by the mint ?

 

[RWB]

I don't know what the current situation is about exchanging or redeeming coins.

 

Actually, a huge production of cents largely benefited taxpayers because the government profited from their manufacture and commercial interests got the coins for business use. [see web definitions of the 'velocity of money' to better understand the larger importance of having the coins in circulation.]

[numisport]

Admittedly I don't really understand 'Velocity of Money' enough to respond. However I agree with some political commentators who say that government never creates anything, only redistributes wealth. Therefore if it takes anywhere near or more than one cent to produce a one cent coin, you and I are having our wealth redistributed. Sorry I'm off subject now.

[RWB]

What "velocity of money" means in practical economics is how quickly a unit of currency changes hands in commerce. If there are sufficient 1-cent coins, then they will move from person to person in step with economic expansion and contraction - even very short term changes. If there are too few 1-cent coins, they will hamper expansion as people find it difficult to find the coins they need to complete ordinary transactions. This creates a restriction or "bottle neck" on economic growth.

 

The economic value of a 1-cent piece is greater than a cent because it changes hands many times.

 

As for redistribution: Every government, every charity, and every business redistributes wealth. The important differences are in the ways the wealth is used. A republic (like the USA) strives to provide services and infrastructure that benefit all the population - or at least as many as possible. Businesses use the wealth to pay employees, improve operations and market products - but only within the small part of the population that interact with the business.