March 28, 2012
With the billions of coins struck every year at the four mints, it is difficult to relate to the numerous examples of shortages over the years. This could turn into a lively discussion, but I’ll try to limit it to a few highlights.
Are the mints keeping up with demand?
You might say, “finally.” There were minor shortages in the early 1980s, but in the last several years production has met demands and has been cut back slightly. That doesn’t really approach the fact that nearly every business has a container of cents next to the cash register to round off sales.
Some think the coin shortages of the 1960s were the worst on record. Actually, if we depend on history, it’s probable that shortages were more severe during the War of 1812. Adding to the problem, private mints in Mexico churned out fake U.S. halves with dates from 1787 to 1814.
During the change from silver coins to the clad in 1965, there was an effort to get the San Francisco Mint to strike coins to help relieve the shortages. Re-opening the San Francisco Mint was one of the suggestions made to alleviate the coin shortage, but Mint Director Eva Adams in early 1965 said publicly that “it isn’t practical” to strike coins there.
The San Francisco Mint, downgraded to an Assay Office, was used to make coin planchets, which were shipped to Denver to be struck. But a couple of months later Mint officials changed their minds and it was decided to resume coin production there, and move the proof production facilities from Philadelphia to the San Francisco Assay Office.
Canadians suffered a coin shortage three years later than the United States, resulting in the need for the Canadian coins struck at Philadelphia in 1968.
The Vietnam War got blamed for a coin shortage in the United States in 1966. Actually, the war had only a minor direct affect on our coinage, although U.S. cents disappeared as fast in Vietnam as they did back in the states. One report mentioned that in a period of a few months American troops received more than 1.5 million cents, but that they disappeared from circulation at the post exchange and other military installations in a matter of days.
Coin shortages have a long history in the United States. Starting at the beginning, since 1792 the Mint never caught up with demand until the 20th century. As but one example, the country continued to use foreign coins until 1857. There were many instances of shortages from the Civil War onward. Even after the demand for coinage was satisfied, there were further periods of shortages.
The Civil War of 1861-65 had a profound affect on the coinage. As is so often the case, the very rumors of war triggered hoarding of coins, especially silver and gold. The silver three-cent was one of the victims, in effect replaced by two coins—the two-cent in 1864, and the nickel three-cent in 1865. The last six-figure mintage of the silver three-cent was in 1862.
The Seated Liberty half dime underscored the point with a mintage of 1,492,550 in 1862 and just 18,460 in 1863. It would be replaced in 1866 by the Shield nickels, one of two coin pairs of the times.
During the early 1970s the Mint deliberately mixed S-mint coins in with those from Denver and Philadelphia to foil speculators who were buying bags of the coins.
One instance that was not directly connected with speculation was during the coin shortage in the central part of the United States in late 1940. Despite the fact that the Denver Mint was running three shifts, 24 hours a day, it could not keep up with the demand, and in November 1940 173 tons of S-mint coins were moved from San Francisco to the Chicago Federal Reserve Bank to help fill the gap.
One period of note was the era of the “Great Coin Shortage.” Early in 1962 the Federal Reserve Banks in Boston, New York and Philadelphia began rationing coins. This triggered a mini-panic, and the public began hoarding, making the situation worse. The Treasury Department falsely blamed coin collectors for the problem, suspended making proof coins in 1965 and took away mintmarks for three years.
The United States indirectly participated in a coin shortage in Honduras. That country once used U.S. coins in its economy, circulating there for a number of years. In 1951, some 14 million U.S. half dollars were recalled by the Honduran banks and returned to the Philadelphia Mint. The half dollar corresponded in value with the one-lempira coin. The withdrawal resulted in a coin shortage, alleviated with the issue of a new one-lempira note later in the year. Source
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