Archive for May, 2013

Will The U.S. Penny Be Discontinued?

Rumors go round and round about the future of the US penny. Nostalgics hate the idea that there would be no new pennies put into circulation. Practical people love the idea of streamlining the cash process by ridding their pockets of the annoying “worthless” coins. Vending machines, parking meters, and most toll booths will not accept pennies because it is not worth the hassle. Even military bases outside of the United States discontinued using pennies several decades ago citing that they are too heavy to ship.

With Canada, New Zealand, and Australia having already phased out use of their one cent coins without significant adverse effects to their economies, many believe it is only a matter of time until the Lincoln head coin will see its final days. Ultimately, however, to end the minting of the United States’ smallest valued coin, it would take an act of Congress. Literally. And so far the bills that have been presented to the branches of government have not passed.

President Obama rides on the practical side of the fence, believing that the penny is not used enough to be worth the effort and cost of making it. He also realizes, however, that Americans are attached to the US penny and some of the decision may simply be based upon that. The President has conceded that if such a bill to discontinue production of the penny was passed, he would agree to its implementation.

The decision to end use of the US penny would be based upon more than just a question of convenience. There are many economic, logistical, and political considerations for those defending or debunking the use of the penny. The mint in Denver produces most of the pennies that are being made currently, and discontinuing that would certainly have a negative impact on the economy of the city. It would take a great deal of adjustment to balance out the effect that ceasing penny production might have.

Some people who believe the penny should be discontinued realize that its worth has dwindled rapidly. Even in 1857 when the 1/2 cent was discontinued in the US, it was worth at least ten times what  the penny is worth to the average consumer today. In circulation, a nickel is now worth about what a penny was over 40 years ago. The fact that it costs more to produce a penny (over 2 cents) than a penny is actually worth indicates the rate of inflation over many years. Until the mid 1980s pennies were actually made from mostly copper, but since then they have been minted from zinc plated with copper in order to keep costs down.

Organizations and lobbyists have been active in an effort to draw attention to this issue, either for or against the penny. While some people believe that charities who collect pennies will be adversely affected, others claim that the charities will simply move to collecting nickels instead.

Most people think it would just be easier to create a system to round cash purchases up or down and give change in multiples of five with nickels, dimes, or quarters. That creates the concern, in some opinions, that there will be a higher demand for nickels; nickels also currently cost more than double their actual value to produce. There are also those who believe that rounding purchases out would mean more cost for consumers, but countries who have done this in the past have been able to implement systems fair for both consumers and businesses. Other people worry that the practical side of removing the penny from circulation would create accounting and bookkeeping difficulties related to computer software.

Many coin collectors seem to be of the opinion that the decision to remove the US penny is not far off and they are anticipating what this could mean for the coin collection industry. Recently a coin collector paid $1 million for the purchase of one erroneously minted penny from 1943. Discontinuing pennies completely would certainly impact US coin collectors by creating a whole new set of coins that are no longer in production. This doesn’t immediately render them rare or valuable, but it could change the rate at which pennies are circulated therefore decreasing the wear and tear on the coins simply from daily use.

So far, however, there are no immediate plans in the works to end the use of this beloved, collectible, American icon. And with the red tape that Congress requires in order to get something of this magnitude passed, it could be many years before Honest Abe’s face disappears from our pocket change. But, if the penny does go, Mr. Lincoln will still be honored on the more valuable (and less costly to produce in relation to its value) $5 bill.

Monday, May 20th, 2013 Blog No Comments

The Million Dollar Penny: Bob Simpson’s History of Coin Collection

Prior to being known as the co-chairman of the Texas Rangers Major League Baseball team, Bob Simpson of Fort Worth Texas had already begun to earn his status as a legendary coin collector. Though he has only seriously been in the coin collecting arena for about the last 10 or so years, Simpson started his great love of coins when he was merely a youngster.

Reportedly, as a boy Simpson was fooled when he found a 1943 wheat penny which he expected would be quite valuable. He had hoped it would be one of the rare bronze-planchet errors which should have been minted on steel blanks because of wartime efforts to conserve copper for the use of ammunition. Disappointingly, it was just a typical zinc-coated steel penny like all of the rest that were commonly held onto from that era. He kept it, though, and still has it in his desk as a poignant reminder of his teenage collection dream of having an actual 1943 Copper Lincoln.

Finally, that dream has come to fruition for Mr. Simpson. Not only does he have one, but he has a collection of the three best wheat pennies from that era. Bob Simpson’s recent purchases of the $1 million 1943-S and $1.7 million 1943-D bronze pennies completed this collection. Negotiations for the purchase of the 1943-D penny by Simpson for $1.7 million apparently lasted for a few years. The anonymous East Coast previous owner of that famous Copper Lincoln reportedly donated the entirety of the proceeds from the $1.7 million sale to charity.

The $1 million 1943-S, purchased by Simpson in the latter part of 2012, completes his collection of the best bronze-planchet pennies struck erroneously in 1943. The three coins represent one from each mint that was functioning during World War II when copper was in high demand. The third is a 1943-P from the mint in Philadelphia, Pennsylvania. Simpson’s collection is the first one to ever have these three rare coins from each mint assembled together for display.

Simpson’s coin collection has gained so much attention that it prompted the launch of a new Plus (+) designation in the numismatic ranking system offered by the Numismatic Guaranty Corporation. The plus sign is added to a number to indicate that a coin is at the high end of its numeric grade on the ranking system. This reflects premium value and indicates not just aesthetic appeal but also the coin’s marketable value as a collector’s item.

In addition to his 1943 bronze penny collection, Bob Simpson has been collecting 1944 steel-planchet wheat pennies for years. Although that year designated the return to copper minted pennies, a few leftover steel blanks were made into pennies in error during 1944. Though not as rare as the copper Lincolns, these off-metal steel cents from 1944 are representative of the war time production of coins transitioning back to normal.

Mostly enamored by United States coins, Simpson has an unparalleled collection of coins spanning over a century–from the late 1700s to the mid 1900s. Many of Simpson’s coins are patterns and trials, which were the first test coins prior to the minting of larger batches. This massive collection sets a supreme standard for the authoritative grading of coins. His activities as a collection connoisseur has also allowed for new research to be conducted on his coins leading to, among other things, discoveries of varying metal composition in coins previously believed to be the same.

Simpson’s epic collections are sometimes shared with other interested parties at coin collection exhibits in various places in the United States. His USA Penny collection of off-metals from 1943 and 1944 are ranks among the Hall of Fame registry among PCGS sets (Professional Coin Grading Service). Also included in Simpson’s collection are a 184-piece complete set of the David Hall $10 Liberty Collection, which was valued approximately at $4 million at the time of purchase. This particular collection took David Hall seven years to gather together prior to its purchase by Legend Numismatics, the company representing and purchasing on behalf of Bob Simpson.

Bob Simpson’s contributions to the coin collecting industry have opened up many new avenues of coin trading, particularly in consideration of internet trading. Simpson has also contributed to new forms of establishing more reliable forms of grading coins and collections. His exacting orientation to detail has created a new level of standards in the world of coin collections. Because of Simpson’s fame within the baseball segment, his engagement in the coin industry has brought coin collecting back to the forefront of the news in some of its lesser-known arenas. Plus, for him, it’s a deep passion that comes from the fulfillment of a lifelong dream.

Monday, May 6th, 2013 About The Wheat Penny No Comments

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