Are coin collectors being buffaloed by Senator Ben Nighthorse Campbell, or will a slightly altered reissue of the popular American Buffalo Silver Dollar be money in the political bank for Colorado's senior senator?
Earlier this year, the U.S. Mint's initial offering of 500,000 commemorative silver dollars featuring James Earl Fraser's famed 1913 nickel design (curly bison on one side, profile of an American Indian on the other) sold out in record time. Within just a few weeks, savvy collectors had snapped up all of the available coins for $30 apiece -- with $10 of that purchase price going to the Smithsonian Institution's new National Museum of the American Indian. Although the one-dollar pieces are legal tender, their real value is on the international collectors' market, where experts predicted they would soon fetch three times their purchase price -- or a hundred times their face value.
But that was before Campbell opted to get more bang for his buck. "The purpose of the Buffalo Silver Dollar is to raise money for the National Museum of the American Indian," he says. "That was the intent when I introduced the original legislation to authorize the striking of the coin, and it remained so when Congress supported the legislation."
And it remained so when Campbell recently suggested that the Mint stamp out another 250,000 coins. The Smithsonian, which bagged $5 million from the first run, asked for double that number.
Fearing that a second batch would dilute the value of the first on the collectors' market, coin enthusiasts started complaining. "In a nutshell, those who didn't get in on the original ordering would probably be in favor of it, but for those of us who did, it would be pretty unfair," says Karol Stoker, manager of Tebo Coin in Boulder.
And unhappy collectors can become unhappy voters. "It could hurt him politically, because there are a lot of collectors," Stoker warns. With coin collecting on the increase since the introduction of the state quarter series (Colorado is set to get its two-bits' worth in 2006), Stoker estimates there are now as many as 200,000 coin-collecting Coloradans.
Campbell insists that he's "sensitive to the collectibility" of the coins, pointing out that he recently wrote Treasury Secretary Paul O'Neill, who has the power to authorize any reissue, and "urged him to add a special designation such as a '2' to additional coins to differentiate them from the original striking."
For collectors, though, that solution still comes up short. An online poll by Coin World found that 70 percent of the respondents were against any reissue. The Mint "advertised the vintage," notes Klaus Degler, manager of Denver's Rocky Mountain Coin Inc. "This would be a slap in collectors' faces."
There are plenty of dollars for those who want them, Degler adds. People just have to be willing to pay a premium for one of the 500,000 coins that have already been minted. "The program was a success, and then people get greedy," he says. "Not just collectors, either. The Smithsonian would want ten million if they could sell them. It's more money in their coffers."
But since the original issue was sold out before the coins were even advertised in trade publications, a reissue would make them available to more people, Campbell points out. "The way I see it, my approach is a win-win," he says. "It raises more money for a good cause and provides a second run of a slightly different version of one of the most popular coins in history."
And, according to Degler, it will just exacerbate the situation. "They'll end up creating the same problem," he observes, with some collectors getting a second helping of buffalo while others are left out.
While collectors await the results of the Treasury Department's coin toss -- O'Neill's assistant says he'll make a decision later this month -- the private sector is only too happy to fill the public's appetite for the classic buffalo image, which was discontinued back in 1938. A full-page ad from National Collector's Mint Inc., which ran in the August 21 Rocky Mountain News, appears to be offering the new coins for a mere $9.95 -- but the fine print reveals that the items for sale are actually silver medallions engraved with Fraser's design. An order-taker at National Collector's Mint says that she always tells potential customers the silvery souvenirs are not legal tender. "Some hang up, but others still want them," she says. "It's a popular design."
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The ads are "very misleading," says Degler. He points out that the trinkets will probably never be worth more than a few pennies because they are merely silver-clad; he estimates that hundreds of the medallions could be made from a single ounce of silver, now priced at about $4.15 on the current market. "Medallions don't usually hold their value," says Degler -- unless, that is, it's a Super Bowl commemorative with a Bronco on it.
For that matter, coins, too, can lose their luster. Even if the Mint doesn't reissue the American Buffalo Silver Dollar, Degler suggests that demand will cool in a year or so, reducing its value by as much as $40 per coin. And then collectors will stampede after the next hot issue, which the Mint will be sure to give them -- in limited amounts.
"The Mint is the biggest coin dealer in the country," he says. "When something is not available, that's when people want it."