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Wednesday, April 22, 2009

Palladium Saint Gaudens Ultra High Relief Revisited

Legislation to create Palladium Ultra High Relief Double Eagle bullion and numismatic coins was recently introduced in the Senate. Since several readers have been commenting about it, I wanted to review the proposed legislation in a full post.

Similar legislation had also been introduced last year. One version of the bill was voted on and passed by the House, but it did not progress further and never became law.

The latest legislation was introduced on April 1, 2009 as S. 758: Original Saint-Gaudens Double Eagle Ultra-High Relief Bullion Coin Act of 2009. The bill seeks to aurthorize both numismatic and bullion palladium coins with the classic Saint Gaudens design. The current status of the bill is "Referred to Committee." In order for the bill to become law, it must be approved by the Senate and House of Representatives and signed into law by the President. You can check the bill's current status at Govtrack.us.

The numismatic coins described in the bill would be exact replicas of the original 27 millimeter version of the 1907 Double Eagle Ultra High Relief Gold Coin except for stated variations. The stated variations indicate that the coins would have a finish that closely approximates the original , bear the denomination of the coin, the date of issue expressed in Roman Numerals, and the motto "In God We Trust." These numismatic coins would be produced at the West Point Mint with a maximum mintage of 15,000.

At the option of the Secretary of the Treasury, a gold bullion coin of the same design may be minted and issued. If the gold version is issued, each numismatic palladium coin could only be issued in a set containing one of each coin. The set would be provided in a "presentation case of appropriate design" and could only be issued in 2009.

The bullion coins described in the bill would bear a likeness of the original obverse and reverse of the 1907 Ultra High Relief Double Eagle. The stated variations indicate that the coin would include raised edge lettering to indicate the weight and purity of the coin, bear the denomination of the coin, the date of issue in Roman Numerals, and the motto "In God We Trust." The bullion coins would be minted at any facility other than the West Point Mint and would be produced in "such number... as the Secretary may determine to be appropriate."

The palladium used for each version of the coin would have a purity of .995. The bill specifies the sources of the palladium bullion used in the coins as palladium mined from natural deposits of the United States within the one year period before the coins are minted.

There are several curious aspects of the legislation that make the proposed coin seem strange or problematic.

Why the 27 millimeter diameter? The legislation specifically requires the coins to have a diameter of 27 millimeters, after the original design. Did the authors of the bill consider the fact that the volume of palladium is about 60% greater than that of gold? The Ultra High Relief in gold already has a thick diameter of 4 millimeters. Would a bullion coin with a thickness over 6 millimeters just start to look funny?

Why the Ultra High Relief Double Eagle design? When similar bills were introduced last year, authorization was not yet in place to produce the UHR Double Eagle in gold, although the US Mint had indicated their intentions to produce the coin. The bill would have provided authorization for the desired UHR in gold, as well as authorize the palladium bullion coin. The UHR Gold Double Eagle was subsequently authorized directly by the Treasury Secretary and has been on sale for the past several months. This makes a portion of the current bill redundant and negates a portion of the original intention. Why not make a fresh attempt at authorizing a palladium bullion coin with a different classic design?

And finally, why a palladium bullion coin in the first place? The Royal Canadian Mint is the only world mint that has ever offered a palladium bullion coin. The Palladium Maple Leaf was offered only from 2005 to 2007 before production of the coin was stopped. In the final year, only 15,000 coins were sold. Maybe a classic design would draw interest from coin collectors, but is there enough demand from precious metals investors to justify a palladium bullion coin program? Here, I will point out that the sponsor and cosponsor of the bill are both Senators from Montana, the location of the only active palladium mine in the United States.

Numismatically, this bill seems a bit interesting, but probably more odd. Whether it has a chance of gaining sufficient political support to become law is another question. On Coin Network, there's an ongoing discussion on the Palladium Saint Gaudens Double Eagle. Feel free to join in with your opinions.

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18 Comments:

At April 22, 2009 at 4:34 PM , Anonymous Anonymous said...

One possible answer to Mike's question "And finally, why a palladium bullion coin in the first place?": The bill was introduced by Montana Senator Max Baucus. According to the Stillwater Mining Co. website, "The USA has only one primary palladium producer, the Stillwater Mining Company, which operates two mines in southern Montana."

Personally, I think it would be an interesting addition to the US Mint family.

 
At April 22, 2009 at 4:42 PM , Blogger Michael said...

Yes, I was hinting at that fact, and actually added in a subsequent edit.

I also think a palladium coin might be interesting, this legislation just doesn't provide the best format.

 
At April 22, 2009 at 6:05 PM , Anonymous Keith said...

In my opinion, this has to be one of the most poorly written bills.

Why a mintage limit of 15,000 for "numismatic" purposes. Palladium is considerably less expensive than gold - with an appropriate design, the coin would easily sell many multiples of that mintage.

Note that the bill starts discussing the Secretary's potential decision to mint the coin in gold and the requirements of that prior to actually specifying that the intended coin should be minted in palladium.

Why link the "numismatic" palladium coin to the gold coin? At the Mint's pass-through cost of gold, this severely limits the potential market for the set.

The requirement that the Mint produce the "numismatic" version only in 2009 severely limits the probability that the coin could be produced even if the bill did pass.

Extremely confusing language in (u)(4)(d) which seems to indicate that the gold version included in the 15,000 limit may be struck at West Point, and any other gold coins struck above that number must be struck somewhere else. This means that instantly all current UHRDE gold coins are in violation of this section.

The requirement to mint bullion versions of the palladium coin at any mint except West Point shows a lack of understanding of the nature of Mint facilities. Any other facility would most likely require additional security enhancements in order to store appropriate amounts of bullion to produce the coins.

The insistence on the 27mm version shows that the authors have probably never seen a double eagle before. The 27mm version is obscure enough in numismatic lore to prove that this is not designed for the collector, but instead, a lame idea to cash in on Moy's idea for the gold version.

 
At April 22, 2009 at 6:38 PM , Anonymous Anonymous said...

They should offer the palladium version in a set with the gold one this year with a 100,000 mintage.
I would definitely buy a set on day 1. I know for sure the mint needs more interesting products to offer. Their site is getting borring.

 
At April 22, 2009 at 7:23 PM , Anonymous Anonymous said...

Palladium coins would be an interesting addition but I would prefer to see it in something else besides DE. CoinNetwork people like the Native American coins but we have a bunch of those, buffalo nickel, buffalo gold, Sacajawea, and Native American dollars. But I am not totally opposed to more Native American coins in palladium.
But I would like the historical theme with some of the better designs early in the founding of the country and in larger quantities like 50,000 or more. The twofer with another gold DE would kill the project because of the bullion issue. Unless the mint can come up with a supply of gold or the law mandates it so bullion won't be an issue. Plus a smaller gold coin if it is paired so cost would be less of an issue with the majority of collectors.

 
At April 23, 2009 at 4:08 AM , Anonymous Anonymous said...

Because of the many different negative issues mentioned in your article, it will never happen.

 
At April 23, 2009 at 6:18 AM , Blogger Fullerene said...

I am interested in a US palladium issue, but not an UHR St. Gaudens version.

Has the artistic capacity of the US waned to the point where our best choice is to recycle our own classic deigns?

The US has produced beautiful and timeless designs in the past, and can do it again. Nothing says "My best days are behind me." like copying yourself.

 
At April 23, 2009 at 7:04 AM , Anonymous Anonymous said...

Commenter above is correct. Nothing says our best days are behind us like copying yourself and General Motors going bankrupt. Bring on the classic coin reproductions.

 
At April 23, 2009 at 11:50 AM , Anonymous Anonymous said...

I'd like to suggest that Palladium be used to mint a series based on very early or unusual U.S. coin and pattern designs, starting with the disme and half-disme (or some other very early type).


This would give modern collectors the opportunity to obtain exemplars of early U.S. coin designs in decent condition at an affordable price, while creating a purpose for the program besides simply using palladium from Montana.

The St. Gaudens UHR is beautiful but will be destroyed through overuse.

How do I contact the bill's sponsors to suggest this?

 
At April 23, 2009 at 2:55 PM , Blogger Michael said...

Anonymous above-

Here is the Senator's contact page:

http://baucus.senate.gov/contact/index.cfm

 
At April 23, 2009 at 3:27 PM , Anonymous Anonymous said...

Maybe they should produce the new lincoln cent in palladium? That way when the order arrives two to twelve months later I won't be disappointed because I waited so long just to get two rolls of regular pennies. I can say, "Hey, it really was worth the bad customer service from the mint".

 
At April 24, 2009 at 5:46 AM , Anonymous Anonymous said...

The one big thing missing in this Mint service / fullfilment breakdown is a Coin oriented reporter to question Director Moy about the present groundswell of customer horror stories and disatisfaction, and public publication of his explanation and action plan to correct it. If it's the Mint- say so. If it's the system- say so. If it's the new fulfillment operator - say so. It's O.K., we can handle it, just get your head out of the ground. Do you need money to run things properly? Need T.A.R.P. funds?

Coin World? Numismatic News? Other good publications? Anyone? Somebody please. Inform your readers. They love numismatics and are being choked.

 
At April 24, 2009 at 1:45 PM , Anonymous Steve W said...

A Palladium coin would be something different. However, we need to introduce another design. I prefer the Pratt. "Indian" design for the $2.5 & $5 gold coins. It is a superior design that has not been revived at this point.
I think we would cheapen the UHR gold coin if we also produced an identical design in a palladium "checker" coin.

 
At April 24, 2009 at 4:31 PM , Anonymous Anonymous said...

For the records, here is a list of all palladium coins:

http://www.rene-finn.de/English/palladiumtabeng.html

Palladium coins were minted from 1966~!

 
At April 26, 2009 at 12:11 PM , Anonymous Anonymous said...

I think the price of Palladium is close to what the price of Platinum was when those coins were first issued by the US Mint.

It seems that sales may be similar to the early platinum coins which did quite well.

The problem is when the price goes higher then sales will drop, however palladium doesn't seem to have the same chance of going higher than gold prices so should stay as an attractive alternative.

Also the mint has stopped the fractional coins so a new one ounce palladium coin would add to sales.

I hope they make one and this bill passes.

 
At April 29, 2009 at 7:16 PM , Anonymous Dick Cheney said...

I would totally buy one.

 
At February 9, 2010 at 1:12 PM , Anonymous Anonymous said...

They definetly need to go with the UHR design.. Even though Palladium is just as rare as Platinum but alot cheaper. It would make a great investment.
They definetly need to pass this and make it a Deep cameo PROOF!! but how will we know once it passes?
Spiff.

 
At February 9, 2010 at 1:56 PM , Blogger Michael said...

You can track the progress of the bills here:

http://www.govtrack.us/congress/bill.xpd?bill=h111-3405

http://www.govtrack.us/congress/bill.xpd?bill=s111-758

also check out Coin Legislation which provides coverage of coin related legislation.

 

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