Transcript generated automatically by AI and may contain errors.
Chapter 1: What is the main topic discussed in this episode?
This is 99% Invisible. I'm Roman Mars. This past February, the American Numismatics Association held its annual convention at the Savannah Convention Center in Savannah, Georgia.
Good morning.
Six o'clock today.
For the uninitiated, numismatics is the fancy word for coins and the study of coins.
Okay, massive room.
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Chapter 2: What is the significance of the American Numismatics Association convention?
There are dozens and dozens and dozens and dozens of vendors.
And that's reporter and novice numismatist Katie Thornton.
This was my first time at a coin show, but right away I could tell that this convention was not necessarily catering to the merely coin curious. More than anything, this show was for collectors, mostly of US coins, with each booth featuring something for which there was some kind of small but extremely avid fandom.
These gold pieces were made with gold from the California gold rush. We're specialists in what's called three-cent silvers or trimes. These are half-dimes. Have you ever heard of a half-dime?
I have now. There was also a society dedicated to crushed pennies, like when the machines smushed the pennies, or as they call them, elongateds.
Why do we stop on pennies? You give me a foreign currency and we'll smash it and see how lovely the design comes out.
But Katie wasn't on the hunt for anything quite so niche. Instead, she was in Savannah to learn about what has to be the most widely collected coin in American history.
So I'm of the age where my sort of introduction to coin collecting was the state quarters. Do you have any you could show me? Oh, yeah. Of course, everyone in America knows about state quarters. Chances are you have one hiding in your couch cushion right now.
From 1999 until 2009, the U.S. Mint issued 56 special quarter designs, one for each state and territory and Washington, D.C.
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Chapter 3: What role do state quarters play in American coin collecting?
So the $5 half eagles here are $5 worth of gold, give or take a few cents at that time to consider the amount of work and money it took to make it. And then the smaller ones, they're a quarter eagle, and they are worth $2.50 worth of gold.
And silver coins worked pretty much the same way, which is to say the way they do today. Dollars, half dollars, and of course, quarters.
But beyond just standardizing the denominations, the early U.S. Mint faced another equally important numismatic task. It had to decide what our coins would look like.
Only these first designs were nothing like our modern state quarters. Instead of dozens of elaborate variations, early U.S. coins only featured a small number of very simple, some would say boring, motifs. And deliberately so. That's because the mint used design in part to guard against counterfeiting. By making engravings clean, simple, and consistent, you could easily spot any deviation.
One of the reasons why they wanted to keep the design so similar was if they all had minor, minor differences, then a counterfeiter could create another coin with a minor difference that would just kind of be accepted.
All these counterfeiting countermeasures required that the first U.S. coins all looked pretty much the same. And thanks to our first president, they didn't even have any real faces on them.
The first U.S. Mint, they go to George Washington and they say, sir, we're going to need your bust to be made so that we can have your face on coins. But he says, absolutely not, because that is for a monarchy. And George is like, we literally just fought a war to get rid of our monarch. How dare you try to make me into that same symbol?
And he said, over my dead body, which, by the way, if you've seen a quarter recently, awkward.
But even more than the concern over counterfeiting or Washington's living body, it was the technology of the time that limited the design of these early coins.
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Chapter 4: How did the U.S. Mint use state quarters to generate profit?
Money Reserve, a coin seller. A few decades ago, though, he was director of the U.S. Mint. And he says to understand seniorage, you have to think of the Mint as a business, a business whose product is coins.
And that is like any product in business. You hope to produce it at a cost that is less than what you sell it for.
So the goal for the mint is to make coins as cheaply as possible, but to still sell them at their face value so that they can turn a profit, just like any other product.
And when you do that with coins, that's called seniorage.
So seniorage is the profit the mint makes from selling a coin for more than a cost to produce it. Like Philip said, simple.
Now, if you're wondering who would be stupid enough to pay 25 cents for a coin that only costs a few cents to make, well, you are. And me too.
And me. We all end up paying full face value for these coins, thanks to a chain of sale that starts with the Mint's largest customer, the Independent Federal Reserve Bank.
Which, just for clarity, operates independently of the federal government.
The Federal Reserve, they pay us the face value of the coin, and then those coins are distributed to the regional Federal Reserve banks. And the regional Federal Reserve banks then take orders from the banking system in the United States, and the coins are delivered to the banks.
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Chapter 5: What historical context surrounds the design of early American coins?
So when Philip Diehl became the director of the U.S. Mint in 1994, one of his main goals was to stop and ideally reverse this decline.
And so when I was director of the Met 30 years ago, I was the first Met director to recommend the elimination of the penny. And it was long overdue then.
Unfortunately, Philip did not have the necessary sway to kill the penny. America would have to wait for someone else to make that one happen.
But there was another more exciting idea to boost Senior Edge that was being bounced around the mint at the same time. A scheme to increase the sales of one of their biggest earners, the quarter.
And after a couple of years, I started thinking about whether or not that was possible. And I became convinced we could do it.
At that time, in the mid-90s, every quarter, thanks to its high face value, was still netting the Mint about 22 cents in seniorage. And every year, some of those quarters would fall out of circulation. People lost them, accidentally threw them out, or put them in coin jars in the car.
Which meant every year, the banks had to ask the Mint for more quarters to replace all those missing coins, make up the gap, and ensure that the country didn't run out of change.
That, of course, was good for the U.S. government because selling more quarters to the banks generated more seniorage for the Mint. But what if there was a way to get people to take even more quarters out of circulation every year? Well, one way was to convince people to start collecting them.
Only, the Mint couldn't just rely on hardcore collectors, like the ones I met at the convention, to get the job done. The idea was to take billions of dollars worth of quarters out of circulation. If it was ever going to do that, the Mint would somehow have to convince ordinary people, people who rarely even thought about quarters, to start collecting them too.
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