The Politics of Numismatics

Posted on 6/21/2012

The politics of numismatics has changed over the years from mainly consisting of local club elections to more recently having the Federal government become involved.

Traditionally, the politics of numismatics consisted mostly of coin club elections. This would include everything from the local club to the biennial ANA elections. A few years ago I got my first taste of numismatic politics when I ran for a seat on the ANA board of governors. I wasn’t sure of my chances, so I ran ads in Coin World, handed out flyers and participated in public forums before the election. It’s a good thing I made the effort because I won my seat by just a few hundred votes! Once elected, serving on the board has been a wonderful experience. It is good to participate in the important decisions that affect our hobby and I look forward to serving many more years, if reelected, in the future.

Over the last several years the government has become much more involved with issues that affect numismatics. Not a week goes by without a headline featuring actions by some governmental agency in the United States. Numismatics can involve large sums of money and this has become a prime target for states looking for funding. Dealers around the country are constantly fighting sales tax exemptions. Whitman faced the chance of its extremely popular Baltimore shows losing the sales tax exemption. They have had to hire lawyers, lobbyists, and expert witnesses to fight back the rising tide of politicians seeking to raise funds by taxing our hobby in one way or another. So far, Whitman has been successful, but at a large cost. Those living in a state with sales tax exemptions should consider themselves very lucky. The next big worry will be the consequences of a national sales tax if that were to be implemented. Fighting the Federal government would be very difficult for our relatively small industry.

Another hot issue for collectors and dealers is the onerous holding laws now being put in place in many communities. Often politicians do not understand the hobby and pass laws that can be extremely difficult or impossible to comply with. Quite often a city might decide that every dealer must now hold anything they purchase for a minimum of 30-days. This can be easy for a roll of silver dollars, but holding 100 American gold eagles would involve massive capital and inventory risk. Some local authorities now want to require anyone selling coins to be fingerprinted and photographed! Not many long-time collectors are eager to be “booked” and have their privacy invaded in this manner. Fighting these laws is very expensive and, as stated above, requires lawyers, lobbyists, and expert witnesses.

Recently, a rare coin and bullion company in California became the target of high profile investigations about their sales practices. The government claimed the company was essentially engaging in “bait and switch” tactics. After months of litigation and massive legal expenses, the company was ordered to make changes and offer refunds to disgruntled customers. Other retail rare coin companies have followed this case very carefully, and some have undoubtedly made adjustments to their business practices to avoid problems with government authorities. Even if innocent, fighting such an accusation can financially destroy a company due to legal fees.

Every year in January, the ancient and world coin market is focused on auctions taking place at the New York International Numismatic Convention. This year several companies offered a fantastic array of ancient coins. The market for great ancients has soared in the last couple of years and some wonderful examples were slated for sale. A day before the sale, authorities from the District Attorney of New York and the US Department of Homeland Security detained an owner of one of the companies that was to auction the coins and confiscated two coins. One of the coins, a splendid Greek specimen, was expected to set a new world record for an ancient Greek coin. It is still not clear which laws had been violated and at whose instructions the coins were confiscated. Several countries, including Greece and Italy, are trying to stem the loss of cultural artifacts from leaving their shores. The situation is very complicated however, as ancient coins have traded for hundreds of years around the globe. This has been an issue for several years, but now collectors and dealers are very concerned that the United States government is actually arresting people. Look for this issue to be hotly debated in the years to come. And you guessed it – more legal fees and lobbyists!

Anyone with even causal knowledge of coin collecting has probably heard of the problem with Chinese counterfeits. These bogus coins have been flooding into the country in the last several years. One of the prime conduits for these fakes had been eBay. Sellers would offer the coins as replicas with the word COPY clearly stamped on the surface. When the coins were delivered however, the word COPY had been omitted. Many of these counterfeits are deceptive enough to fool beginners. Obviously, the best protection is to purchase NGC-certified coins, but many novices are tempted by the chance of getting a bargain. After considerable lobbying by leaders in the industry, the United States Secret Service decided to get involved. They are now pursuing several such cases and have devoted considerable resources to address this problem. Most importantly, after a few phone calls from the Secret Service, eBay has decided to eliminate replicas from its auctions. This is a wonderful victory for numismatics.

As you can tell from the above issues, numismatics and the government have collided quite often. Several months ago, Barry Stuppler, a former ANA President, formed a numismatic Political Action Committee to deal with these and other problems. He has raised considerable money and has made some great inroads with important legislators who might have influence with numismatic issues. I applaud his efforts. No longer can collectors and dealers take our wonderful hobby for granted. The stakes can be quite high and, with considerable effort, our hobby can be protected for generations to come.

Jeff Garrett bio

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