Thoughts on Collecting Modern Coins by Andy Briggs
The following commentaries result from my disillusionment with the current issues of large quantities of commemorative and investment coinage produced by various mints for collectors. They are my personal opinions; I would be interested to hear what other collectors feel on this subject.
I started collecting coins in my teens, with an interest in British and Commonwealth crowns. One of my first coins given as a gift was a Churchill Crown – I obtained several from the bank with a view to selecting the best (with fewest bag marks). I tried to spend the ones I didn’t want, but no one would accept them and they were returned to the bank for 5 shillings each. My interest in Commonwealth crowns waned in the early 70s as more and more countries issued commemorative crown sized coins (25p after decimalization, and later £5) with many issuing a BU coin in Cu-Ni, and a proof version in 0.925 Ag. It became impossible to keep up with the new issues. As a result I now collect silver pennies, groats and shillings from Middle Anglo Saxon times to the onset of decimalization.
Recently I decided to follow the development of Britannia from 1665 on the silver pattern farthing of Charles II, to the modern Britannias issued by the Royal Mint as a £2 coin. I was surprised to find that the Mint has issued 4 different Britannia £2 coins for 2022 – the normal circulating bi-metallic coin, a bullion coin with 1 oz silver in BU format, a Proof 1 oz coin, with a different design to the bullion coin, and an Exclusive Edition BU 1oz coin with a different design again. The designs (except for the circulating coin) change every year.
Britannia Bullion coin in BU Britannia Commemorative Coin Exclusive Issue
Silver Bullion Britannias are also issued in sizes of 5 oz and 2oz and fractional sizes of one-half, one-quarter, one-tenth, one-twentieth and one-fourtieth of a troy ounce and with face values of £10, £1, 50p, 20p, 10p, and 5p respectively. Britannia Bullion coins are also issued in gold, with the same range of gold weights as the silver coins. Since 2018, Britannias have also been available in platinum. The Commemorative and Exclusive designs also come in a range of weights, metals and condition. So I guess my plan for a complete collection of modern Britannias is doomed.
Just as a matter of interest I went through the Royal Mint web site trying to understand how many £2 coins have been issued so far in 2022. I counted 19 different designs (and may have missed a few) with some also being issued in multiple formats. Of these, 3 are bi-metallic – the normal currency issue, and Commemoratives honouring Alexander Graham Bell and Dame Vera Lynn. Of the 19 designs only one is issued for use as currency.
Recently the Perth Mint issued a $2,500 coin comprising 10 oz of gold, 2.52 carats of coloured diamonds, and with a limited mintage of 8, for a cost of Australian $262,800 (about £148,000). The coin is advertised as legal tender in Australia.
This issue, many of the post decimalization issues from the Royal Mint, and Commonwealth commemorative crown issues prompted the question of what is a coin, and should these issues that don’t circulate as currency be classified as coins?
So what actually is a coin?
A coin is a small, flat, (usually, depending on the country or value) round piece of metal or plastic used primarily as a medium of exchange or legal tender. They are standardized in weight, and produced in large quantities at a mint in order to facilitate trade. They are most often issued by a government.
Random House Dictionary says:
A piece of metal stamped and issued by the authority of the government for use as money.
The definition of legal tender (from Wikepedia) is:
Legal tender is a form of money that courts of law are required to recognize as satisfactory payment for any monetary debt. Each jurisdiction determines what is legal tender, but essentially it is anything which when offered ("tendered") in payment of a debt extinguishes the debt. There is no obligation on the creditor to accept the tendered payment, but the act of tendering the payment in legal tender discharges the debt.
Coins and banknotes are usually defined as legal tender in many countries, but personal cheques, credit cards, and similar non-cash methods of payment are usually not.
Under most circumstances, the term ‘Legal Tender’ has no impact on collectors or the general public, but what if one were to try and use the Jewelled Koi as legal tender – is its value $2,500, or 10 oz gold at the prevailing gold price. Should the legal tender value include the 2.52 carats of diamonds?
Commemorative coins offered in BU condition in copper-nickel are usually not intended for use as currency, and if offered as cash for purchases would probably be rejected as the coin would not recognized as such by the intended recipient. Commemorative coins produced for oversees countries probably never see the country of issue, but go directly from the mint to collectors or dealers.
Proof versions of commemorative coins are often issued in silver or gold and contain a much higher value of metal than the nominal value on the coin. It is highly unlikely that owners of such pieces would try to use them for trade; they are purely for the collector or investor market.
However, if anyone did try to spend the above coins, or to use them to settle a debt, in the unlikely event that they were accepted, would they be accepted at face value – the value stated on the coin, or at the prevailing metal price?
Since these items are produced for investors or collectors, but are not intended for use as money, then in my opinion they should not be classified as coins. They are sometimes known as Psuedo Coins or NCLT – non circulating legal tender coins.
If we are to agree that commemorative coins should not be defined as coins unless they are also issued as circulating currency, then this strict definition should also apply to Proof and Piedfort coins.
Proof coins were originally trial strikes to test (or prove) the dies. They were never intended for circulation and were part of the process of manufacturing coins for currency, just as the die itself was. Proof coins are now produced for collectors using specially prepared flans and with a multi-striking process at slow speed.
Piedforts are pieces struck with proof dies but on a flan of much more than normal thickness (usually double). They originated in France and used as gifts for VIP visitors. The Royal Mint website notes that in England in the Middle Ages coins were often struck in different places, not just London. Therefore it appears that the early Piedforts were created to be sent to engravers across the country to show them the designs they should follow when creating dies. Making the pieces thick and heavy helped to ensure they weren’t mixed up with ordinary coins as legal tender.
Both Proofs and Piedforts were originally produced as part of the coinage process, and were not intended for circulation. Now they are produced in high value metal, worth much more than their nominal value, for the collector market, again with no intention of them being used for currency. I have to question whether these too should be called coins, although a proof example of one of the current coins of the realm could quite easily be used and go unrecognised.
What about Patterns? A pattern coin is a coin which has not been approved for release, but produced to evaluate a proposed coin design. Several different patterns may be produced when a change in coinage design is being contemplated. Although not meant for release, I believe several Pattern shillings from Charles I reign did enter circulation with the currency issues. However, a pattern is produced as a stage in the process of minting coinage, and is not itself a coin.
Bullion and Investment Coins
A bullion coin is struck from refined precious metal and used for investment purpose rather than in day-to-day commerce. A bullion coin has a statement of weight (or mass) and fineness on the coin. This contrasts with coins used for currency where the weight and composition of coins is specified in the coinage laws of the issuing nation, and therefore there is no need for an explicit statement on the coins themselves.
The United Kingdom defines investment coins more specifically as gold coins that have been minted after 1800, have a purity of not less than 900 thousandths and are, or have been, legal tender in their country of origin. Under United States law, "coins" that fail the last of these requirements are not coins at all, and must be advertised as "rounds" instead.
Bullion coins are issued in BU condition, but others are issued as proof coins, and sold at a premium of up to four times the value of the metal content. These coins are aimed at the collector, not the investor.
For instance, there is a gold proof $200 Koala for sale on AMR Coins, containing 2 oz of gold (gold value of about £2,960), but selling for £4,750.
Despite being designated ‘legal tender’ these coins are not intended for general circulation, and will never be used as currency and are really no different from an ingot stamped with an interesting (possibly) design. I believe they should not be described as coins.
Several of the coins issued by the Royal Mint are advertised as containing a certain amount of precious metal, but this is not stated on the coin. These coins form part of collectors series offered by the mint. For instance the following coin are issued in 2022 and contain 1 oz of silver (worth approximately £17), but with a designated value of £2.
Common £2 Obverse Design City Views Collector’s Series
Royal Tudor Beasts Collector’s Series (both illustrations)
These items were also issued in various sizes and quantities of precious metals, in silver, gold and platinum. They have no historic significance, and are merely art works struck in precious metal.
A token is a piece of money whose intrinsic value is less than its face value. Therefore all modern coins could be classed as tokens, because the value of the contained metals is always less than their value as currency. The UK abandoned full value of coins in 1816; the gold sovereign became the absolute standard and all silver and copper coins became tokens. Numismatically, tokens are coin-like objects issued by a body other than a government, and used in place of money in exchange for specific goods and services.
Generally tokens were issued privately by individuals, merchants and later by banks to facilitate trade in periods were there was a shortage of official coinage. They were tolerated by the government until such time as official coinage became available. Tokens go back a long way, and in England lead farthings and half farthings were well established in Tudor times and were only regulated in 1598 when Elizabeth licensed Bristol to issue lead tokens to be used within a 10 mile radius of the city.
Tokens were revived after the civil war because of a shortage of small change, and were only banned in 1672 when ‘official’ copper farthings and halfpennies were introduced.
They were issued again in 1787, again because of a shortage of low denomination copper coins and silver pennies. They were only banned in 1797 with the introduction of ‘cartwheel’ coinage.
The cartwheel coinage contained the same value of copper as the coins value (hence the 2p coin was so unwieldy as it weighed 2 oz). In the next ten years the intrinsic value of copper rose, and much of the Government issued copper coinage was melted down for trade. Because of the shortage of official coinage, privately minted token coinage returned and was endemic by 1812
Silver tokens were issued between 1804 and 1816, as a result of a shortage of silver coinage. In 1804 the Bank of England Dollar was issued and during this period countermarked Spanish dollars also circulated and between 1811 and 1816 the Bank Of England released Bank Tokens. Many private silver tokens were issued in 1811-12 in denominations of 3d to 5s mainly by private banks, local authorities and large companies.
The Royal Mint undertook a massive recoinage programme in 1816 , with large quantities of gold and silver coin being minted. To stop the further issuance of private token coinage, in 1817 an act of parliament was passed which forbade the manufacture of private token coinage under very severe penalties. The Truck Act of 1831 finally banned employers paying their workers using tokens.
The tokens described above were used as currency; their use was not limited to purchase from the merchant, or indeed to the town where they were issued (Ref – “Silver Tokens and Bristol by James Mays, BNJ, 1978-48-11).
The tokens were not issued by the government, but they were condoned because of the lack of government issued coinage. They were used as money to facilitate trade, and as such, I believe they should really be classified as coins.
In my opinion, coins should only be defined as such if they are manufactured for use as money for trade purposes. Coin-like objects produced as part of the minting process (patterns) or for collectors and for investors – proofs, piedforts, bullion coins, commemorative coins – should strictly not be called coins. However, many items called tokens I believe do fall under the definition of coins.
One Final Thought
I have been rather dismissive of the issue of large quantities of commemorative coins, and I wonder if the mints are doing the hobby of coin collecting a disservice by swamping collectors by producing so many new issues in BU, and Proof condition and in various metals. But, I was introduced into the hobby through the gift of a commemorative coin – the circulating coins of the time (and George V and Edward VII coins did still turn up in change in those days) did not ‘hook’ me like that first commemorative crown did.
My wife has just taken a liking to Princess Diana commemoratives – so perhaps the issue of commemoratives covering all aspects of life (football, rugby, war, scientists, musicians, etc) is a means of bringing more people into the hobby, and that can only be a good thing.