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VOLUME 3 / SEPTEMBER 2016 Why a Country Needs a The Historical ? Or Does a Country Perspective… Need a Mint? or Why a State In 2016, Denmark closes its mint and Mints Coins thereby ends a tradition going back Who does not know the background more than a thousand years. only knows half of the story. That is This is not an isolated incident. In Europe why we have briefly summarised here alone, five nations have privatised, sold the reasons why states started to mint or closed their mints within the last two their own coins. decades. Time after time, governments weigh their options and how much money Private interests group At some time in the second half of the 7th it is worth to them to produce their coins century BC, the minting of coins started. in a state mint. Who was responsible is still a matter of The current economic crisis might be scholarly debate. In all probability, it was a reason why some governments have not any government. It is more plausible reduced their mints to profit centres, that coins were used either by mercenary and why it has become immaterial that leaders to pay their soldiers or by temples for centuries state minting activity was a to personalise votive gifts. matter of pride and national security. Probably contributing is the fact that State monopolies the coin as change in daily transactions Less than 100 years later, minting was in the hands of the state. Governments has become a side issue, as long as Sales, Closures, politicians and representatives of central primarily minted coins to pay for banks do not prefer a complete transition Privatisations of infrastructure, such as temples, a fleet or to cashless payment transactions. Mints in Europe – particularly important – a standing army. Therefore the control of the mints became And let’s also add that the production 1998 Privatisation of the Polish a state monopoly: whoever struck the of coins is compared more and more Mint as a public limited money for the soldiers was the one who to the production of banknotes, where company privately-owned businesses are involved controlled the military. Rome and its a great deal more and much higher 2001 Sale of the Swedish Mint coins turned into a model that was to efficiency is achieved. for SEK 200 million to Mint survive the demise of the Roman Empire of for centuries to come: powerful states There is no point denying these controlled their coinage. developments. In fact, the coin industry 2003 Sale of the Norwegian Mint has to face the demands of our time for NOK 44 million to Mint Public-private partnerships and develop approaches which will of Finland and Samlerhuset In the Middle Ages, only a very few rulers secure its importance – as a state or AS Norge were truly powerful. Accordingly, minting as a private mint – for its clients and was mainly done through private-public 2011 Closure of the Swedish Mint therefore its own survival. partnerships. Ursula Kampmann, Editor 2016 Closure of the These partnerships proved a good Royal Danish Mint business, both for the entrepreneur and 2016 Sale of Royal Dutch Mint for the state: the minting authority was guaranteed a seigniorage whereas the 2017 ? entrepreneur took care of his profit himself. Continued on page 3 > www.currency-news.com Going Private - Mennika Polska The Polish Mint is one of the few cases in But even before the new building was Today the majority of shares are held by which a state-owned enterprise has been officially inaugurated on 26 September Polish entrepreneur Zbigniew Jakubas. The successfully converted into a private 1994, the Polish government converted the state itself no longer holds any shares in the company. At present, the Mennika Polska Mint into a stock corporation, effective 1 previously state-owned company. is a stock company, of which the Polish April 1994, whose shares were initially fully state no longer holds any shares. owned by the Treasury. In 2016, the Polish Mint celebrates the This allowed the Polish Mint to operate as a 5 Good Reasons for 250th anniversary of its foundation. After self-responsible profit centre. Already in the a Private Mint King Stanislaus Poniatowski decided to very first years of its existence, it achieved 1. Market behaviour: Capacity and establish a mint in Warsaw in 1766, the several successes. In 1995, it issued prices react to demand and offer. Polish Mint, however, was not permanently the first Polish bullion coin and, in 1996, Overcapacity will be reduced quickly. in operation. Its work was interrupted at produced blanks for Lithuania as well as a 2. Greater customer orientation: regular intervals by the various foreign new coin series for Ukraine. Without having to take account powers that controlled . But the order for the production of Polish of national preferences, a private In 1868, for example, the Russian Tsar coins does not necessarily go to the Mint. enterprise can fully concentrate on closed the Polish Mint and had the Instead, it is an international competition. meeting the needs of the customer. equipment moved to the Mint of St On 6 February 1998, permission was 3. Fewer restrictions: As non- Petersburg. And during their retreat in granted to trade the shares of the Polish Mint governmental enterprise, a private firm 1944, the Germans blew up the Mint, thus on the Stock Exchange. On 7 April 1998, the is not in the public eye and does not terminating coin production, which was only shares were quoted for the first time. Since have to overachieve regulations. resumed under Communist control. then, the shares in the Polish Mint have been 4. Costs: Experience shows that There are probably only a few nations in freely tradable and highly popular. private firms work considerably more which the mint is so closely connected After all, in its home country the Mennika cost effectively than state-owned with national independence as in Poland. Polska is a model for the successful businesses. Therefore, it was self-evident that, after privatisation of a formerly state-owned 5. Innovative strength: Economic the founding of the third Polish Republic enterprise. It was elected Company of the competition forces private enterprises in 1989, a new Mint, with state-of-the-art Year in 2006 and Company of the Past to remain innovative, to position technology, should be constructed. 20 Years in 2010 by the Polish Business themselves sustainably in the market. Club Association. In 2013, Forbes listed the Polish Mint as one of the world’s most dynamic public companies.

The Historical Perspective (Continued) The bill had to be paid by the people. They National money: From then on, a coinage of one’s own meant were given change that was cheap to a question of justice independence. Until then, the colonies manufacture and contained only a small The French Revolution introduced the had been supplied with money by their amount of silver. And this change always decimal system. This was revolutionary motherland, whereas independent nations had to be exchanged at a significant – perhaps just as revolutionary as the founded and operated their own mints. premium. Gold or silver money of stable Declaration of the Rights of Man and of The mints became a source of national value was only available at considerable the Citizen. It put an end to a split system pride. In this spirit, the first President of extra cost. consisting of money for the rich that was the United States, George Washington, This, of course, weakened local economies. of stable value and inflationary money for immediately initiated the construction of a Those affected responded with destructive the poor. national mint. To the citizens, the images of revolts at regular intervals. One of the main The underlying idea was to use a functional the joint currency illustrated the values on characteristics of a strong government, currency to boost the nation’s economy. which their identity was based. therefore, was to seize control of the With the French Revolution, this idea spread Incidentally, something similar happened coinage, in the best interests of the throughout the whole of Europe and from in the 1990s. Back then, the dissolution of community, to make for good money. Europe to overseas. the Soviet Union led to the foundation of national mints. The cost factor In recent decades, national identities have taken a back seat to economic interests, in the same way as the coin has lost its function as a mass medium. The mints have reflected this development insofar as the cost factor has now become the crucial factor in the debate. The repercussions become clear by a look at the examples in this issue. One of the great achievements of the French Revolution was the introduction of a monetary system that did not disadvantage the user of small change: for twenty 5 pieces made of copper he got a franc. During the Ancien Regime, a high fee had to be paid when exchanging small change for silver or gold coins.

2 MINT NEWS QUARTERLY VOLUME 3 | SEPTEMBER 2016 The Rise and Fall of a Private Mint: the Mint Founded in 1850, within just ten years Some time at the beginning of the 1960s, Roland Vernon, owner of the Birmingham the Birmingham Mint, which specialised the concluded an agreement Mint also requested that the contract for in bronze coins as the small change with the Birmingham Mint. It stipulated coins and blanks in the UK should now of that era, developed into the world’s that the Birmingham Mint was to receive a go out for tender: ‘The Royal Mint has the largest private mint. The Birmingham specified percentage of all overseas orders monopoly on UK coins and I think these Mint produced change on behalf of many of the Royal Mint. figures confirm it really should be coming large-scale economic powers of the time 2001 was a bad year for the Royal Mint, out to tender for other people to bid. I (for example , the UK and ). which recorded a trading loss of more than believe we could give tax-payers better The Mint could play this crucial role in £5 million. This was due not just to a decline value for money.’ global coin production because the Royal in orders, but also the high restructuring The lawsuit ground on and the situation Mint was prevented from accepting any costs of the loss-making enterprise. became increasingly threatening for the orders from foreign governments. And The situation was further exacerbated by Birmingham Mint, even though it had so everybody who wanted to benefit the theft of coins worth £25,000, which received a major order for the production of from British know-how had to turn to the were taken from the safes of the Royal Mint. blanks in 2002. Because of an acute privately owned Birmingham Mint. shortage, it was put under KPMG In this beleaguered position, the Royal administration in March 2003. But then, in 1923, the Royal Mint was Mint terminated the contract with the granted official permission to accept Birmingham Mint. An action for damages, The attempt by a local politician to the relevant orders which led to the to the tune of £5.4 million, was filed by the motivate the Royal Mint to agree to a demise of the Birmingham Mint. In the Birmingham Mint in October 2002. compromise, by threatening to file a lawsuit years between 1940 and 1964, coin with reference to the 1997 Competition production only accounted for 10-20% Act, failed. In May 2003, the Birmingham of the entire business. Mint closed.

The End of the Danish Mint Without a comprehensive public debate The Mint came under the control of the and without any significant media Danish National Bank as late as 1975, 4 Good Reasons to attention, the Danish Mint has just having previously been controlled by the Not Have a Mint closed, putting an end to a story which Danish Government. 1. Use of cash declining: Cashless began more than a millennium ago. As recently as 2011, it was decided to transactions are on the increase, Does the fate of the Danish Mint serve as an move the activities of the Danish Mint from which makes it more and more likely example for the fact that national mints have its location in Brondby to the premises of that coins will eventually become outlived their usefulness for cost reasons? the National Bank in Havnegade, where superfluous. According to the bank, ‘Although the the country’s banknotes were already 2. Cost: A mint not working to capacity volume of cash in circulation remains high in being produced. It was hoped that this generates higher costs than the Denmark, demand for new banknotes and amalgamation would make it possible occasional minting of commemorative coins has been falling for some years, and to make synergies and thus save costs. and circulation coins through highly Danmarks Nationalbank does not expect The relocation was scheduled for the first efficient contract partners. quarter of 2012. the trend to reverse. ... All in all, this means 3. Not a core competency: Minting that production of banknotes and coins at In 2012, the relocation actually took place, coins does not belong to the core Danmarks Nationalbank is not economical and the ‘Banknote Printing Works’ was competencies of a state. The state and and will not be economical in the future.' renamed ‘Banknote Printing Works and The the central banks are responsible for 'Consequently, Dankmarks Nationalbank Royal Danish Mint’, effective 1 January 2012. directives, standards and mintages; has decided to initiate a process to Roughly one year later, the board of industrial processing of metal can be discontinue internal printing of banknotes directors of Danmarks Nationalbank outsourced. and minting of coins during 2016. Like a decided to stop the production of 4. Deregulation: The state retreats number of other central banks, Dankmarks banknotes and abolish the Mint. Principally, from industrial production and services Nationalbank will outsource these functions it was the fact that Denmark’s need for new in order to offer private enterprises and to external service providers. This decision coins and banknotes was in decline and taxpayers fair and free competition. is expected to yield total savings of Kr 100 that, by abolishing the production of these, million until 2020.’ savings could be made. With these words, the National Bank On 19 May 2016, meanwhile, a two of Denmark announced its decision on year contract to produce Danish coins 20 October 2014 to let go of a tradition was awarded to the Mint of Finland. The that harks back more 1,000 years, by ultimate reason for this decision was that terminating the production of coins in the the Finnish Mint had submitted the most country’s own Mint. inexpensive offer, but quality and security were also taken into consideration.

MINT NEWS QUARTERLY VOLUME 3 | SEPTEMBER 2016 3 Why Germany has Five State-Owned Mints Germany has a population of almost 82 German mints after World War II When the euro was introduced, the German million. That’s high compared to France The six mints just named produced the Coinage Act was only slightly rephrased, (66.03 million), or the UK (64.1 million). coins of the German Empire, the Weimar improving the position of the federal But this size of population does not Republic, and the Third Reich. When it government and weakening the influence justify an oversupply by five national was time – after the victory of the Allies of the federal states. The Act, most recently mints. Why Germany, nevertheless, against Nazi Germany – to introduce a changed on 22 December 2011, stipulates has five state-owned mints, and will new currency, it was decided to keep this the following in section 6: probably continue to have them for a system going. 6.1 The German euro coins and the while, is summarised in this article. In West Germany, all mints were kept German commemorative euro coins are When William I was crowned German active. A balanced system was developed, to be minted by the mints of Federal Emperor on 18 January 1871, this was a after which even today the striking of coins States which declare their willingness and development viewed with great unease is subject to both the Cabinet of Germany which are commissioned by the Federal by the rulers of the rest of Germany. and the federal states. Government. The procedure of minting is Traditionally, the princes of the Holy Roman When the GDR was integrated into the subject to oversight by the Federal Ministry Empire held sovereign rights such as Federal Republic of Germany, this system of Finance; jurisdiction, tax collection and, of course, was adopted for the Berlin mint. 6.2 The Federal Ministry of Finance the right to mint coins in their territories. determines the distribution of the sums Despite the crowning of a German emperor, Legal and administrative status to be minted to each mint and warrants the constituent territories were not willing Germany is a country which has three an equal and adequate compensation for to transfer all of their rights to a central political echelons: every coin type minted. government. Therefore, the newly founded the municipal level; This means that Germany would have to nation was a patchwork of many little the federal states as the heirs of the change its Coinage Act in order to contract nations, of which each one kept a jealous former principalities; out its minting internationally. watch on their privileges. the government, currently under Also, the closure of a German mint cannot The Imperial Mints of Germany Chancellor Angela Merkel. be decided by the federal government, but And one of those privileges was minting While in many other countries the mint only by the Ministry of Finance of the relevant their own coins. Both the Imperial Coinage is directly subject to the highest financial federal state. To each federal state, the mints Act from 1871 and that of 1873 determined authority, minting in Germany is divided represent employers, partially financed by that no one united, national mint should between the federal government and the government funding, which contribute to strike German coins, but that the mints of federal states, due to the above explained state revenues. So, as long as the state- the constituent territories, which were willing, historical reasons. owned German mints do not produce a loss, should take over this task. In section 7 of the Act on the minting of why should any of them be closed? These were mainly the major states and city divisional coins from 1950, the legislator states: the Kingdom of Prussia, Bavaria, determined the following: Saxony and Wuerttemberg, the Grand 7.1 Coins will be minted on behalf of 5 Good Reasons for a Duchies of Baden and Hesse, as well as the and for the account of the Federal Free Hanseatic City of Hamburg. State-Owned Mint Government in the mints of the Federal 1. Security: The state controls all Shortly after the introduction of the new States which have declared their security requirements it deems currency, several mints closed. Already willingness. The procedure of minting is important. back then, the active German mints to be controlled by the Federal Ministry of 2. Priority: In a state-owned mint, emerged: Prussian Berlin, Bavarian Munich, Finance; Stuttgart in Wuerttemberg, Karlsruhe in national orders have first priority. 7.3 With the approval of the Federal Baden, and Hamburg. Placing an order with a private Council, the Minister of Finance company can imply a different The only mint currently not active anymore determines the distribution of the sums prioritisation due to economic reasons. is that of Saxon Muldenhütten, which to be minted to each mint and warrants a 3. Increase of GDP: State-owned was closed in 1953 as a GDR (German compensation for every coin type minted. Democratice Republic) mint, when the mints offer jobs for highly qualified entire coin production of the GDR was employees, who spend their salaries concentrated in Berlin. locally and pay contributions to the national social security system. A mint is an attractive enterprise that strengthens the economy of a country. 4. Independence: For centuries, the control over one’s own money has been a sign of independence. 5. Reputation: State-owned mints are perceived as a part of their state and thus enjoy greater trust than privately- run companies. Also, having a state- owned mint is a sign of a powerful, economically strong state.

The Karlsruhe Mint still operates in the same building which was ordered to be erected by Charles I, Grand Duke of Baden, in 1816.

4 MINT NEWS QUARTERLY VOLUME 3 | SEPTEMBER 2016 What is the Difference Between Operating as a Private versus a National Mint? We asked two Mint Directors this 6. Making Australians proud of their history? A: A national mint with the flexibility to question – Ross MacDiarmid, CEO of A: We can’t really guarantee this. Perhaps operate with greater flexibility, ie. in our the of the Royal Australian Mint and we are making them aware. case a government owned corporation Grzegorz Zambrzycki, President of the with a skills-based board reporting to the Does it make a difference concerning Board and General Director of the Mint Q: government. The RAM in all appearances coin design, the launch of new technologies, of Poland. operates like a private business and, while pricing or the way of marketing in not being benefitting from having the integrity of private, but government-owned? governmental ownership and respecting the A: Yes it potentially does make a difference responsibility it has to the government to because a private mint is generally protect its interests, it could operate more unconstrained in what it does and how it effectively under a corporate structure. spends money without having bureaucratic oversight. Private mints also operate at a lower cost because they don’t have the cost burden of governmental reporting and regulatory compliance. Q: In Germany or Switzerland for example, the government is not only fully responsible for the themes of commemorative coins, but also for the design. Does politics have an influence on the coin designs in ? Ross MacDiarmid. A: No – only very occasionally. The RAM develops program concepts, themes and Royal Australian Mint event ideas that it puts forward to the Q: What makes the difference between a government and, when it relates to the national and a private mint? use of the Queen’s effigy, obtains approval A: A national or a sovereign mint is generally to use. Grzegorz Zambrzycki. responsible for the production of circulating Q: If yes, how does it work? coin for that country and has a direct A: If on the rare occasions the government or indirect reporting responsibility to the Mint of Poland does have a particular requirement, it will government of the day. It is generally owned Q: What makes the difference between a seek advice first and /or the creation of a by the government. national and a private mint? concept from RAM, and then based on the A: We use different wording. In our Q: What kind of obligation do you feel, outcome it may direct a particular theme. In opinion, a national mint is a mint which, knowing that you are owned by the my time at the RAM there have been very irrespective of its ownership structure, is government? few occasions where the mint has been the only production facility located in the asked / directed to produce a coin. A: To avoid embarrassment to the country providing coins to the national government and thereby any risk of Q: You are running a lot of programs to bank of that particular country. In such a reputational damage, while protecting the improve the situation of your employees. case we are in fact a national mint. Quite Intellectual Property of the country in the But isn’t it sometimes a financial burden another story is whether we are state- form of the national effigy and any other to act as a flagship company of Australia controlled or privately owned. core cultural identifiers. which has to be very sensitive to the What kind of obligation do you feel needs of its employees, to environmental Q: Q: If you had to prioritise the following towards your shareholders? tasks, how would you value them? issues or equality? A: We need to act like any other company No, not really. I would describe much Providing circulation coins for Australia? A: listed on the Stock Exchange. We need of what we do, within the resources A: This is the core business, but it must still to be transparent, deliver value to the available, as no different to what a private be profitable. shareholders by constant growth, proper business would do. We are interested management of risks, creation of strategy, Making a profit? in achieving improved productivity and development, paying dividends as well as A: If you make a loss on the commercial ensuring staff work in a safe, secure and delivering market capitalisation. business, the government may ask you to engaging environment. We have supervisory meetings every show the cause. The WellMint program we have previously month, during which we present and Operating in a sustainable manner? described and the Leadership program we discuss such issues as results, major described at the Mint Directors Conference A: This is about trying to ensure the contracts, obligations, strategy, etc. business has a future and operates in an in Bangkok are our un-imposed initiatives If you had to prioritise the following tasks, environmentally and socially acceptable way. to help create a more productive, motivated Q: how would you value them? Increasing the clientele? and effective workforce. If you had the choice, would you prefer Making a profit? A: This is important to continue to grow the Q: working as a private mint or rather stay a numismatic business. A: Obviously, we are economically-driven national mint? company, so delivering profit would be Designing coins which sell well? important and our top priority. This is part of the success of the A: Continued on page 6 > commercial business.

MINT NEWS QUARTERLY VOLUME 3 | SEPTEMBER 2016 5 Privatisation Private versus a National Mint? (Continued) Disaster Providing circulation coins for Poland, As private entity we follow simple free The privatisation of state-owned operating in a sustainable manner and market rule – either we develop and grow, companies may unburden a state both Increasing the clientele? or we shrink and die. Stagnation is not an financially and organisationally. But A: Working in a sustainable manner option for us. when a privatisation is as ill-considered and diversifying our markets as well as Q: If you have to compete with national as in the case of the German Federal maintaining our most important client mints or mints which are at least owned Printing Office (Bundesdruckerei), – the National Bank of Poland – are an by a government institution, what will be significant damage to the taxpayers can important part of our strategy. So, all your argument for convincing your client be done. of these, along with making a profit are that it’s better to cooperate with a private In 1989, Germany was re-united, which equally ranked. mint? meant a major increase in work for Making Polish people proud of A: Any client is extremely important and Bundesdruckerei (BDR). Besides its their history? very demanding. I do not believe there capacity to print banknotes, this high- We are one of the oldest entities in the should be any difference in approaching security printing company, originally A: country, with 250 years of history. We and serving such a client, no matter founded as the Imperial Printing Company were established by the last Polish king. whether we are private or state-controlled. in 1879, held lucrative monopoly contracts History and legacy, which we are carefully We must deliver, in restrictive timescales, with the German government for identity preserving and celebrating, are extremely quantities of products of high quality with document printing, stamps, visa and important to us. We are, therefore, very optimised costs, ie. competitive with the passport printing. active in the fields where we can highlight others. No national bank can afford to put To accommodate the increase of work due our history, of which we are proud. at risk the timetable of delivery as well as to reunification, the workforce was enlarged However, being realistic, we are a niche the quality of products. to 4,500 employees. After the initial workload operation. Not every citizen of Poland We are aware that some of the state- declined, these overcapacities transformed is aware of the historical facts and our owned mints are not run by economic into a heavy financial burden which the centuries-long experience. factors. Not always. Sometimes they government administration of the time was have different tasks, such as employment keen to offload. Designing coins which sell well? obligations made to society by politicians, This is important, but only if it For this reason, the Federal Cabinet A: or other factors. Therefore, sometimes we is relevant. We are a mint in seven approved the transformation of the are not in the position to fairly win tenders. state-owned company into a private continents. We sell our products to many We are a tailored and slim organisation, limited company in 1994. €270 million countries. What sells in the Far East does sized to the level required by the market. of government money was invested to not find market appreciation in Europe. Our decision process, willingness to moderise the company. What we make for Europe does not accept changing conditions, dynamically exactly meet the expectations of the It was the goal of Finance Minister Hans changing environment and flexibility west side of our globe. We are carefully Eichel to operate in the black by 2004 at provide us with another large advantage analysing market needs, specifics, culture the latest– a ‘difficult aim’ to achieve in over the others, particularly state-owned and history in order to dedicate products respect of all the liabilities caused by the mints. reunification. One of the tools he used was to specific markets. If you had the choice, would you prefer the sale of BDR Office in 2000 for €1 billion Does it make a difference concerning Q: Q: working as a national mint or rather stay a to the British private equity firm Apax. coin design, the launch of new private mint? The firm only paid a quarter of the technologies, pricing or the way of I was a member of the Supervisory purchase amount. Another quarter was marketing being not government- A: Board of some state-owned companies, owed to the Federal Ministry of Finance, owned, but private? The Polish Mint has but my experience with this sector is and the remaining €500 million was loaned developed quite a lot of price-winning rather limited. by the Hessische Landesbank. technologies within the last few years. Does the need to produce products I like the decision process and flexibility Apax’ goal was to restructure and which sell well influence your decisions which characterises the private sector. redevelop the slightly dusty company and about investment in developing new I like being responsible for delivering to float it as an efficient company on the technologies? results, and I like that what I do is market. The goal was a 30% profit margin evaluated by owners who base their per year. For this reason Apax transferred A: I’m not in the position to comment judgment on known factors. its shares and liabilities to an independent or justify the strategies of others. We company, Authentos GmbH, to which have always looked for new techniques BDR was supposed to pay €50-€75 and technologies. We own 80+ different You can read the full versionof the million per year in order to satisfy interest techniques which can be used during interview with Grzegorz Zambrzycki at rates and pay off debts. production and the decoration of our www.coinsweekly.com products. It puts us on the top of all mints By doing so, the payment of any taxes worldwide. was avoided, because due to this specification, BDR was certainly not able Are we using all of them? No. But most to make any profit. of them. Some of them are still waiting to be appreciated, some of them are Continued on page 8 > not innovative anymore. And we are still working on the new ones. More than 50% of techniques are invented and developed in-house.

6 MINT NEWS QUARTERLY VOLUME 3 | SEPTEMBER 2016 Serving the Citizen: the US Mint Jon Cameron of the US Mint stated at A: Since Fiscal Year 1996, the US Mint has Q: Do you produce coins for other states? The Coin Conference in Madrid in 2015 operated under the Public Enterprise Fund Why or why not? that it wouldn’t make any sense for the (PEF). The PEF enables the US Mint to A: Congressional authorization for the Mint to save a few million dollars – and operate without an appropriation. production of foreign coins by the US Mint that a change of material for small Revenue is generated through the sale of began with the Act of January 29, 1874. money would cost industry involved circulating coins to the Federal Reserve The first foreign coins were produced for much, much more. Banks (FRB), numismatic products to . By 1962, the US Mint had Thus the US Mint has demonstrated that it the public and bullion coins to authorized produced coins for 37 different countries. is more than a profit centre looking to save purchasers. Revenue in excess of amounts Production of foreign coins was not a money; it is a national mint committed to required for operations are transferred to continuous activity. Under the terms of the public. We asked Tom Jurkowsky, Chief the US Treasury General Fund. the proviso in the 1987 legislation, the of the Office of Corporate Communications, Coins and medals (eg. Congressional Gold 1965 annual report [ of the directorof the a few questions about the operating Medals) issued by the Mint are under the Mint] stated that ‘…During the year under principles of the US Mint. jurisdiction of congressional ‘authorizers’, review the United States Mint temporarily while more general policies are determined suspended the customary service of minting by budget ‘appropriators.’ coins for other governments in order to In 2004, the House of Representatives utilize its entire capacity and facilities for the Committee on Ways and Means asserted production of domestic coins…’ its jurisdiction over coin issues under Foreign coin production would resume, or the US Constitution) – ‘All Bills for raising be suspended, as needed throughout the revenue shall originate in the House history of this activity. The last record of of Representatives…’ by requiring foreign coins produced by the US Mint dates consideration of all commemorative coin to the Annual Report of 1984, and specifies program bills by the full body. 45.6 million pieces produced for Panama. Commemorative coin programs are It’s difficult to present specific reasons statutorily limited to only two per year. why foreign coinage production was Tom Jurkowsky Recipient organizations identified by the discontinued. It seems that, by 1987, the authorizing legislation for each program Mint’s own production schedule could no Q: What are the major tasks of the are eligible for surcharges after all costs to longer support the manufacture of foreign US Mint? produce the coins are recovered by the Mint. coins. The simultaneous production of foreign coins would have conflicted with the A: Created by Congress on April 2, 1792, The House of Representatives and Senate Mint’s primary responsibility to manufacture the United States Mint is the world's authorizing committees have committee coins for the nation. largest manufacturer of coins and medals. rules requiring two-thirds co-sponsorship It operates globally alongside leading of each body (290 in the House of The feasibility of producing foreign coinage online retailers and ranks among the most Representatives and 67 in the Senate) is reviewed from time to time, but no technologically advanced enterprises in the before the committee considers legislation decision has been made, to date, to country. The US Mint has approximately authorizing commemorative coin programs reactivate this function. 1,700 employees and generates more than and Congressional Gold Medals. Q: Do you think a nation needs a $3.1 billion in annual revenue. Q: The mintage of US commemorative national mint? The mint produces circulating coinage coins are some of the highest in the world. A: When the framers of the US Constitution for the nation to conduct its trade and What are the reasons for producing these created a new government for their untried commerce. Circulating coin production is commemorative coins? Republic, they realized the critical need for approximately 16 billion annually. A: Congress authorizes commemorative a respected monetary system. Soon after In addition to producing coins, the US Mint coins that celebrate and honor American the Constitution's ratification, Secretary of has other responsibilities, including: people, places, events and institutions. the Treasury Alexander Hamilton personally Distributing US coins to the Federal Although these coins are legal tender, they prepared plans for a national mint. Reserve banks and branches; are not minted for general circulation. On April 2, 1792, Congress passed The Maintaining physical custody and As well as commemorating important Coinage Act, which created the Mint and protection of US gold and silver assets; aspects of American history, culture and authorized construction of a Mint building in respected organizations, these coins help the nation's capital, then Philadelphia. This Producing proof and uncirculated raise money for important causes. Part of the was the first federal building erected under coins, congressionally-authorized price of these coins is a surcharge that goes the Constitution. commemorative coins and medals for to organizations and projects that benefit the sale to the general public; Since our institution’s founding, the men and community. For example, surcharges on the women of the Mint have taken great pride in Manufacturing and selling platinum, gold US Capitol Visitor Center commemorative rendering the story of our nation in enduring and silver bullion coins. coins helped build a new visitor center under examples of numismatic art. To hold a coin Q: Who is making the most important the US Capitol's East Plaza. or medal produced by the Mint is to connect decisions concerning minting issues? Since the modern commemorative coin to the founding principles of our nation and Politicians or the management of the program began in 1982, the Mint has the makings of our economy. US Mint? generated more than $500 million in Read the complete interview at surcharges. www.coinsweekly.com

MINT NEWS QUARTERLY VOLUME 3 | SEPTEMBER 2016 7 A Quasi Unregulated Market? By Daniel Sheffer In this article, Daniel Sheffer wonders For the unbiased observer it must But what about state-owned enterprises where the moral boundaries of a state- occasionally seem that state-run which abuse profits from their national owned mint are, and whether there need companies are allowed to do anything monopoly in order to take on investments in to be legal regulations so that public which is not explicitly forbidden by law. capacities and the conquest of international monopoly holders cannot abuse their On the international markets some state markets which have nothing to do with position for unfair competition. mints literally scatter their products at their basic task? They thus use tax money ‘dumping’ prices. These mints can do so of their citizens to subsidise the coin unpunished, as they are insured by being production of another country. national monopolies. One has to question whether the turnover They can offset any losses from those of a state-run mint really is the only criteria dumping deals against profits made from for its quality. It cannot be in the interest monopoly deals. While in a privately- of a nation and a service to the taxpayers owned business the loss or profit of every to restrict, let alone destroy, free and fair deal counts, politics and networks are competition in producing coins. often the most important factors for state- How do we have to value it from an ethical owned companies. point of view, if representatives of a state Daniel Sheffer – Monea. How could this imbalance emerge? organisation influence representatives of Historically speaking, state-owned mints foreign central banks in order to assure were the sacrosanct money machines the workload of their mint, which might be of their owners: monarchs, princes, and scaled too large? other rulers. Their profit was not caused In the last few years several scandals by revenue minus costs, as it is in a free involving politicians and public officials competition, but by the size of the territory have brought a change in thinking. Even which they could force to use their money. European supervisory bodies are starting to take on the question of what the function Market prices? of state-owned, national mints in a united For the demand of coins, blanks or minting- Europe should be. Publisher: Currency Publications Ltd related services, the state mints – with a in association with Monea. few exceptions – never had and still don’t They will newly define monopolies and the Editor: have to deal with any competition. range of services of state-owned mints. They will differentiate which services will be Dr Ursula Kampmann This is why neither products nor services for (left) delivered by private providers, which should the national market are guided by a price be taken on by public service, and which Translator: arrived at a free competition. This is how big rules will apply to both of them. Dr Annika Backe profits are gained from being a monopoly. The current situation shows us that rules State-owned mints have an important are needed in order to determine what a mission. As modern and efficient service state-owned mint may and may not do. As providers, they ensure that the coins of long as these questions are not discussed Mint News Quarterly™ is produced 'their' country are genuine and produced publicly and noticed as an issue by the every three months and only reliably, efficiently and sustainably. legislature, there will be frustration and ™ distributed with Currency News . State-owned mints are guarantors of trust, lack of orientation on both sides. Private 10 Windmill Business Village, which is given by citizens and foreigners suppliers and especially tax payers are Brooklands Close, Sunbury, in the financial solvency of a nation. Mints, situated at a structural disadvantage. TW16 7DY, UK which achieve this mission, work in the interest of tax payers. www.currency-news.com

PUBLISHED IN ASSOCIATION WITH MONEA Privatisation Disaster (Continued)

No part of this publication may be reproduced, However, profits remained far below It was decided that Authentos GmbH was stored in a retrieval system or translated in any expectations. The exact point of Authentos’ not be sold to a foreign investor again – form or by any means – electronic, mechanical, insolvency cannot determined, because the even though one is said to have outbid the photocopying, recording or otherwise – without the prior permission of the copyright holders. Hessische Landesbank and the Ministry of €400 million offered by domestic bidder The copyright is owned by the author. If no Finance waived all interest and other loan Giesecke & Devrient by more than double author is mentioned the copyright is with payments. that amount. Dr. Ursula Kampmann. In 2002, a trust company bought Authentos Through an ultimatum, the trust company COPYRIGHT 2016. ALL RIGHTS RESERVED for the symbolic purchase price of €1. forced the government to make a final Sponsors It was commissioned to find a buyer. decision in 2008. The Federal Government However, due to 9/11, the security decided to reassume possession of 100% consciousness of the German government of the Federal Printing Office. was heightened. As to the real cost to the German taxpayers, strict silence was maintained.

8 MINT NEWS QUARTERLY