The United States Mint has continued to sell 2011-dated America the Beautiful Five Ounce Silver Bullion Coins to its network of authorized purchasers into the 2012 calendar year. While it is typical for the Mint to sell prior year dated bullion coins into the following year for other series, the authorizing legislation for the five ounce silver coins seemed to disallow it.
Public Law 110-456 authorized the America the Beautiful Quarters Program, which will feature a series of rotating reverse designs on the quarter dollar representing a national park or site in each state, territory, and the District of Columbia. The same law also provides for the issuance of five ounce .999 fine silver bullion coins featuring duplicate designs of the quarters. The law indicates that these bullion coins will be issued in quantities that the Secretary of the Treasury determines are appropriate.
With regards to the period of availability, the law states:
Bullion coins minted under paragraph (1)—
‘‘(A) shall become available for sale no sooner than the first day of the calendar year in which the circulating quarter dollar of which such bullion coin is a duplicate is issued; and
‘‘(B) may only be available for sale during the year in which such circulating quarter dollar is issued.
The 2011 America the Beautiful Quarters were launched into circulation on January 24, 2011 (Gettysburg), April 4, 2011 (Glacier), June 13, 2011 (Olympic), August 29, 2011 (Vicksburg), and November 14, 2011 (Chickasaw).
Based on these release dates and in accordance with (A), each of the 2011-dated America the Beautiful Silver Bullion Coins could be released no sooner than January 1, 2011. The bullion coins actually went on sale to authorized purchasers on April 25, 2011 (Gettysburg and Glacier), May 23, 2011 (Olympic), June 20, 2011 (Vicksburg), and July 18, 2011 (Chickasaw).
The US Mint has interpreted (B) “may only be available for sale during the year in which such circulating quarter dollar is issued” to mean that the coins can be available for sale during any year in which the corresponding quarter dollar is issued.
Michael White of the United States Mint Office of Public Affairs provided this statement from the legal department:
Regarding the sale of 2011-dated ATB Silver Bullion coins in 2012, 31 U.S.C. § 5112(d)(1) in part states, “coins have an inscription of the year of minting or issuance.” This means an ATBQ coin that is minted in, say, 2010, can be issued in 2011 (and, indeed, they were issued in 2011). So when 31 U.S.C. § 5112(u)(2)(B) states, “may only be available for sale during the year in which such circulating quarter dollar is issued,” it means that the 2010 5-ounce silver bullion ATBQ coins can also be issued in 2011 (because 2011 is a “year in which such circulating quarter dollar [i.e., the 2010 ATBQ coin] is issued.”
Even if this is a valid interpretation, it is arguable that this was not truly the intention of the authorizing legislation. The United States Mint generally does have the authority to issue coins across multiple years, unless there is a specific requirement otherwise. The 2010-dated America the Beautiful Quarters have actually continued to be issued into 2012 within various numismatic products sold to collectors. The “issuance” of coins in this fashion can continue for many years into the future, making the sales limitation on bullion coins, as the US Mint is interpreting it, essentially meaningless.
The intention of the law was more likely to limit sales of the bullion coins to the initial year of issue for the corresponding quarter. Under this interpretation, the 2010-dated ATB Quarters regardless of year minted were initially issued in 2010 and the bullion coins could only be available for sale during the year 2010. In fact, the legislation states “may only be available for sale during the year in which the circulating quarter dollar is issued.” It does not say the years (plural) or provide any other indication that the limitation on sales should be so limitless.
The sales limitation specified under the law did not come into play for the release of the 2010-dated America the Beautiful Silver Bullion Coins. The US Mint was only able to produce 33,000 coins for each of the five designs, which were all made available to authorized purchasers in early December 2010. All 165,000 of the coins were sold to authorized purchasers by December 23, 2010.
For the 2011-dated coins, the US Mint had recorded sales of 397,700 coins by the end of the 2011 calendar year. During 2012, the US Mint has sold an additional 5,700 of the 2011-dated coins based on the latest available sales figures.
The US Mint has confirmed plans to offer both bullion and numismatic versions of the 2012 America the Beautiful Five Ounce Silver Coins in reduced quantities. Information on the releases dates is not yet known.
The mint continues to play it loose with their customers. It is not like these coins were hot sellers and they are trying to capitalize on their popularity. End the sales and make the 2012s available already.
Michael, I wanted to clarify a point. These five ounce coins that are being sold are excess inventory produced by the Mint, they are not actually striking any 2011 bullion coins in 2012, are they?
Michael,
Is anybody really surprised by this development? If 377,700 5oz coins had been issued last year, and if all 5 designs were minted to maximum mintage of 126,700 per, that leaves 235,800 coins left in the Mint’s inventory. That is a lot of metal to scrap and refine, and is MORE than entire the 2012 bullion mintage of 225,000 coins, if the Mint sticks to the 45,000 figure. I’ll bet the Mint will force the APs to buy at a 1:1 ratio when El Yunque finally is released, for every 2012, they must buy a 2011. The Mint really blew it on the 2011 5oz. Bullion program, they overestimated the underwhelming demand based on the frenzy of the 2010 program, which was a total anomaly. Granted the first two 2011s sold out in a matter of weeks, seems the majority of these coins are languishing in the vaults of certain APs, and waiting for that day when silver is back at $50/oz since this sellout happened when silver was between $45-$50. Despite the way the legislation is written, the Mint is probably going back on historical precedent when they would sell excess prior year dated inventory to the public. The gold Saints in the late 20s and early 30s are a good example of this policy.
Misread the #, should read 210,100 coins left in the Mint’s inventory, which would nearly equal the 2012 5oz bullion mintage.
I think this sneeky legal interpretation is outrageous, but we do not know how many coins were minted. There is simply no grounds for assuming they minted 126,700 of each design up front. That would be really poor business management. It would be nice if someone sued the Mint over this, but that is not going to happen. No more bullion hockey pucks for me. They will all be worth only melt.
Captain-
That is correct. The US Mint cannot strike any of the 2011 designs during 2012. They continue to sell the remaining inventory of coins that have already been produced.
Ahh, who really cares? These are bullion coins produced for investors. Some people have way too much time on their hands in complaining that the US Mint is selling existing inventory. Really, isn’t that what they should do if people still want to buy them? It saves money all around. It’s not like these are numismatic coins. This article may be interesting to lawyers and accountants, but few else. Don’t we have BIGGER things to worry about?
Thanks, Michael.
Jack,
You are mostly correct except for the fact that if the mint states the selling criteria upfront, they should be obligated to stick to that criteria. If they start bending the rules because it is “only bullion”, they are setting the precedent for doing it for numistatic pieces also. At what point do we hold them them accountable?!?
Under existing law the Mint can sell numismatic AtB’s from one year into the next. That is what has been happening since the launch of the program. But whether arbitrary or not, the law says this is not supposed to be done for bullion AtB’s.
Michael, part of your article seems to leave open the possibility that the Mint is indeed still striking 2011 coins because of the peculiar way it has interpreted the law. I know the Mint does not come out and say it is doing this, but it suggests it could do it. And anyway, how would anyone outside the Mint know when they were struck?
I know these may seem like obtuse points for some, but I think this is important as a precedent as mentioned above.
Jack, I agree, but it is the Congress, not us, that has oversight over the Mint. It’s interesting to compare this situation with how when the decision was made not to strike 2009 American silver eagles in proof and burnished finished, the Mint was quick to point to the law for justification for its actions.
Technically, yes, it looks as though legal interpretation would suggest that the 5 oz. bullion coins should not be sold by the Mint into the subsequent calendar year. Practically speaking though, it appears as an honest oversight in the legislative wording. The intent of these coins IS as bullion (i.e.: NOT numismatic) and so it would be patently idiotic to not continue to offer them. What should the Mint do? Melt them down? Why? They are INTENDED as bullion silver. Melting them down is just wasted costs in labor & refabricating the metal into more silver bullion.
Gary:
All true but I do not think it was an oversight by the legislative, the law was very specific to weight and size, what makes you suspect this was an oversight? Why bother being specific when you write the laws if they can be interpreted in an ad-hoc manner. In 2010 the Mint had to get CONgress to change the parameters of the law, when they had problems minting the hockey pucks, so if there was an oversight, the oversight was at the mint in not requesting a broader selling period. In either case this would have been resolved to the determent of collectors. There is no stipulation that they must melt the coins so all they would have to do is ask CONgress for an amendment like they did in 2010, and sell the 2011 once it became law.
Time to start calling our senators and representatives and put an end to this abuse of the program by the US Mint? It seems clear that this was not the intent of the authorizing legislation, and their interpretation of the language seems illegally loose.
Fosnock,
Very well put. The Mint could have simply asked the Congress either before or after the law was enacted, as it has done in other instances.
MadHatter: I thought about that too, but I doubt the Congress will take this up. If you call your rep, most of the time all they will do is get some info. from CRS (the Congressional Research Service) and pass it along, even if does not really answer your question. And there are no CRS reports on AtB’s!
Melting them and using the silver again for 2012 struck coins would cost money and since US Mint is making money with it who cares.