One of the most delightful aspects of our particular hobby and business are the engaging stories of treasures found. Whether a Roman coin hoard unearthed in a farmer’s field, a tobacco tin of frontier gold coin found under the homestead floorboards, or a cargo of Spanish bullion emerging from the depths of a long-lost galleon, these imagination-stirring discoveries not only captivate us with tales of instant riches – they also serve as direct links to our numismatic past, sometimes adding to the historical narrative in the process.
Sometimes, however, a treasure can remain cloaked not six feet nor 1,000 fathoms under, but virtually in plain site as among the pages of a long-neglected book of fiction, migrating for generations from one shelf to another before finally revealing its hidden secret. This is a brief telling of one such recent instance, and the complete happenstance that lead to the remarkable discovery of a unique piece of eastern Canadian banknote history.
It was actually in the early days of the Covid-19 lockdown that a friend and fellow collector told me of an interesting and unexpected find. Although fond of coins and paper currency, his primary passion is in the collecting of antique books. In the course of fueling this hobby, Uncle William had found its way into his collection during the summer, I believe as part of a bulk lot. Authored by Jennette Lee and published in 1906, the protagonist of the small and innocuous hard-cover book has been described as “a genial character who has a talent for confounding land sharks and ending up owning most of the property in sight”.
A hand-written inscription on the inside cover gives important context to its early owner, and reads “Mrs. Israel Lovitt Porter, Yarmouth, Nova Scotia”. We will return to this momentarily, but first – the discovery.
Skimming through the pages of the book, my friend came across a peculiar 9x5cm “fragment” of a document, deliberately trimmed to frame a classic contemplative portrait of Queen Victoria at center, with lion and unicorn at left and right respectively. Any mystery as to the origin of the host document was only momentary, as the back of the piece revealed at its center [the] “Bank of Yarmouth N.S.”. With his experience in the hobby he immediately recognized the origin document to be a banknote, and with the name of the institution at hand, he was able to narrow down the issue as being a Ten Dollar note of 1870, printed by the British American Bank Note Company.
Chartered in 1859, The Bank of Yarmouth conducted business in Nova Scotia until failing in 1905, due to the fraudulent paying of dividends without the necessary capital to sustain such payments. Although near identical Ten Dollar notes were issued by the Bank in both 1870 and 1891, this note fragment was just large enough to reveal – through the absence of the word “Canada” above the lion’s head – that it was from the earlier of the two issues.
Bank of Yarmouth 10 Dollars 1870 Proof, courtesy Bank of Canada Museum
Further examination of the fragment revealed a subtle but highly-important discovery – the top part of two signatures appear at the bottom left and right, undoubtedly those of the Bank’s Cashier and President. The significance of this rests in the fact that although all surviving notes of the Bank of Yarmouth are very rare, The Charlton Standard Catalogue of Canadian Bank Notes lists the 1870 Ten Dollar issue as existing only in “Institutional Collections”. Further research into the collection of the Bank of Canada Museum, however, indicates that only a single unissued Proof of this note exists in the collection. Thus, this small trimmed vignette of Victoria, having rested against all odds among the pages of “Uncle William” for more than a century, has now revealed itself to most likely be the only surviving example of the issue – an irreplaceable link to the history of this Eastern Canadian chartered bank.
And what of the link, if any, to the owner of the book? Preliminary research reveals only that Israel Lovitt Porter was born in Yarmouth in 1883. He was listed on local property rolls as a Merchant, and must have been reasonably successful as he and his wife – Catherine Gardner [Cann] Porter – held title to at least three homes on Forest Street, two of them for a remarkable 64 years until Catherine’s death in 1983.
Did Porter, in the course of running his business, come across the note and trim it down to Victoria’s portrait for posterity, as its redemption value would have been null and void after 1905? Or rather, is it entirely unrelated in its origin to the owner of the book, and simply encountered and retained in its current state for the lowly but practical purpose of serving as a bookmark?
To these questions we will likely never have adequate answers, but the very fact that this unique fragment has survived a century and half, two World Wars, and endless opportunities to become lost in the dustbin of history is both remarkable and delightful to collectors and students of Canadian chartered banknote history alike. Proof positive as well that sometimes numismatic/currency treasures can indeed be found without the use of either a shovel, metal-detector, or scuba-tank!
When the South African mint first issued the one ounce Gold “Krugerrand” in 1967, it was very much a watershed moment in the evolution of the global bullion market. With a diameter of 32.77 mm, and gross weight of 33.93 grams of 22 Karat Gold (net gold content, therefore, of one troy ounce), the coin depicted the African springbok on the reverse, with obverse portrait of the Boer statesman Paul Kruger.
The timing for the Krugerrand’s introduction was ideal. Not only did it stand alone for years as the world’s only available one-ounce bullion issue, it was not until January, 1975 that United States citizens could legally own gold in bullion form. Thus, not only was there zero competition in any form from the American economic juggernaut, but these two factors combined to create a very keen appetite for the Krugers in North America.
Undoubtedly good quantities of the coin found their way into the U.S. covertly during this ownership prohibition, but when the floodgates opened in 1975, an estimated 22 million gold Krugerrands (or 822 tons of Gold!) were imported into the country in the ensuing decade. Ironically, this flow suffered a strangle-hold in 1985 as the United States (and other countries) prohibited the importation of the South African gold coins due to their relation with the apartheid regime of the time.
By this point, however, there was already new competition on the horizon with Canada’s own gold Maple Leaf in 1979, among others. Even into 1980, however, the Krugerrand commanded a remarkable 90% of the world’s gold bullion coin market. Domestically, the Krugerrand still enjoys a loyal following in Canada to this day, however it now sits at a pricing disadvantage under our federal HST legislation, which – due to its non-pure 22K status, compared to our Maple Leaf’s .999 fineness – causes it to attract sales tax when sold within Canadian borders.
The Krugerrand would undergo a modest evolution over the years, with the introduction of fractional sizes beginning in 1980, as well as the availability of frosted Proof strikings for collectors. As both a collector and dealer, however, one prolonged “missing link” in the extension of this classic issue continued to both disappoint and perplex me: namely, the availability of a Silver Krugerrand. Sure, I have a Sterling Silver “10th anniversary” Kruger I bought from some direct-marketing flyer in 1977, but it’s a smaller, paler reflection of the noble coin that should have joined the current myriad of world Silver bullion coins decades ago.
Now, however, the wait and lamenting is finally over. After my muted excitement at the introduction of a Silver Kruger in 2017 – only to discover it was an extremely expensive “collector” strike that few could afford – the noble 2018 Silver Krugerrand has finally been released to the masses of appreciative collectors and investors.
Sure, it may have taken half a century to materialize after the first introduction of its golden parent, however – as is very often the case – good things are truly worth waiting for.
Get Yours from Alliance Coin
We are delighted to have received an initial shipment of the brand new South African .999 fine Silver Krugerrands, and invite you to add one (or more!) to your collection at just:
$23. each (tax-exempt) OR
$26. each, inclusive of postage to anywhere in North America
CBC Television’s “The National” recently consulted us on the Royal Canadian Mint’s cancelled “$20 for $20” program.
An interesting piece, although in our opinion incorrectly grounded from the outset on the assumption that the falling price of Silver was the prime motivator for the mass return of the coins by the public over the past few years (and hence the Mint’s heavy profit-hit from having to write-down the returned material).
This is simply incorrect. While the significant decline in Silver values during the two-year or so period since the series inception certainly helped to impair the Mint’s bottom line, the actual motivation for the coins being returned to the Mint had little to do with this. Indeed, ask any 100 random public buyers of these coins, and I doubt you will find a person among them who would have had the foggiest idea what the actual Silver value of these coins were at any given time while they continued to take advantage of the Mint’s “no-risk” offer of having three coins show up in their mailboxes, tax and shipping-free. In actuality, the Mint’s $20 for $20 coins contained .255 oz of pure Silver, which meant that even during the record-high Silver price surge of March and October, 2012, the net precious-metal of these coins at their very highest was never more than $12. Thus, with a Silver value of never more than 60% of actual cost, these coins were never a good precious-metal investment. Nor, frankly, were they actually intended to be.
Before I continue, however, let me be unequivocal in expressing my original take on the $20 for $20 program. In a nutshell, I liked the program, or at least appreciated the void (or niche) it was attempting to satisfy. The odd inspirationally-challenged design aside, the concept of striking thematic collector coins in pure Silver with a budget-friendly tax-exempt price of $20 was a nice idea – certainly compared to the average issue price of the Mint’s multitude of other Fine Silver Numismatic issues, which averaged double or more this reasonable price-point. To me, as both a dealer and collector, the fact that the “face-value” of the series happened to correspond with this issue price was less relevant, although obviously critical to the Mint’s juggernaut marketing program for the series (an important note: recall that the tax-exempt status of the series is neither a product of the particular face-value chosen or the Mint’s benevolence, but rather how our current HST laws treat any Silver or Gold coins or bars with fineness of .999 or greater).
So – as a fine-Silver collectible coin with $8, $10 or $12 worth of Silver contained within, it always to me represented quite fair value, based on two critical assumptions:
a) You actually liked what you were purchasing, and
b) You were buying the coins as a collector/gift-giver, and not as an investor
And herein lies the crux of the issue, and – most regrettably – it invokes a powerful sense of deja vu from that public relations atomic stink-bomb of 25 years ago, namely the legacy of the Montreal Olympic coin program.
Here, succinctly, are the Mint’s two greatest “Achilles heals” of programming and marketing, both of which they seem incapable of drawing life-lessons from.
The first (and admittedly least significant of the two), involves the timeless issue of market saturation. As expressed above, I liked the original concept of a $20 for $20 program, mainly based on issues of pricing and concept. And, had they made this an annual series of thoughtfully-designed coins, it very likely would have continued on ad infinitum. The Mint, however, invoked their all-too-familiar “Ex-lax” marketing philosophy: “this seems to have worked well, let’s quadruple the program”. Or, to put it more succinctly: this was essentially a five-year program, and yet we have 18 different $20 for $20 coins on the board, not including the creeping absurdity of the “$50 for $50” and “$100 for $100” issues.
Ultimately, it was far less the tanking Silver value of these coins that motivated buyers to express their waning fondness for the coins through a tsunami of returns, but rather a saturation of the market – not insignificantly compounded, ironically, by the success of the Mint’s own marketing efforts. After all, it was so easy to have trios of the coins conveniently dropped into one’s mailbox (heck, you could even earn mileage points on your tax-free purchases if you used the right credit-card!). The inevitable problem was, even at just $20 each, they added up. A trio of each of the $20 issues squirrelled away, for example, and you suddenly find you’re sitting on $1,000+ of the coins. Add in the misguided “investor” interest in the series, and you had the recipe for an inevitable consumer regurgitation. In short, the Mint’s heady loss on the series, forced by very heavy returns and subsequent write-downs, was quite simply the result of people having been successfully persuaded to purchase unnecessary quantities of the $20 issues. After all, not everyone has thirty grand-children, and although the motivations of both greed and speculation can be said to have played a role, by no means would I burden the consumer with the bulk of responsibility here. After all, in being offered Silver coins “at face value”, how could there possibly be a down-side? Which leads us to the second and most critical naughty habit of the Mint, resurrected once again from the dark past.
The 1976 Montreal Olympic Silver coinage represented the largest and most successful Olympic marketing program in numismatic history. By my rough calculations, the Royal Canadian Mint used twelve tons of Silver in the production of their 28 different Five and Ten Dollars coins, which were made available by subscription starting a full three years before the Olympics. You could buy them individually, in series of four coins, complete sets of 28 coins, in various quantity rolls, and through the post, at Banks, directly from the Mint, and on automatic payroll deduction schemes. Gosh, if they could have found a way to liquefy the coins and safely blend them into infant formulas for greater saturation, they would have done so. In addition to the uniqueness of the issues (i.e. the first Sterling coins struck in Canada since 1919) as well as appealing to patriotic tendencies, one of the core marketing principle upon which the program was anchored was a now-familiar one: these coins were Legal-tender. Sure, both the Uncirculated and Proof strikings were marketed at somewhat of a premium, however this additional charge (as well as the intrinsic silver to face-value ratio) was quite moderate. Indeed, it seemed, there was little down-side to the extremely popular series, and at the end of the day, this face-value was “guaranteed by the Government of Canada”. And let us be clear – this understanding was far from being simply an implied assumption. Looking over the original Royal Canadian Mint marketing brochure for the series, it is not possible for this commitment to be more transparently clear. It is, in fact, specifically identified as one of the “Top 10 Reasons” for purchasing the coins.
Fast forward almost 20 years after the close of the Montreal Olympics (yes, they are still paying off the debt of the Games!), and I would facilitate a critical but little-known chapter in the history of modern Canadian numismatics.
A few years into my early career at Arctic Coin in Ottawa, I received one afternoon a young American who had driven up from New England in his dad’s SUV. Piled in the back of his vehicle was $100,000 face value in Montreal Olympic Silver coins. His father, a physician who had invested in the coins, grew tired of waiting for Silver values to rise enough to allow for an intrinsic profit on his hoard, and had dispatched his son to Toronto to cash in the coins at face-value at an affiliated bank. Said bank, it turned out, declined to accept the coins, so next to Montreal drove the hoard with the same intention. Once again, however, the coins were turned away, and so the knock came to our door to see if coin dealers could facilitate the redemption of the coins on the owner’s behalf. This was on a Friday, and I remember clear as mud helping to offload the approximately half ton of coins in the middle of a rainstorm into the basement vault of a bank on Wellington street for weekend safe-keeping, while we awaited an official response from the Mint on the procedure for redemption of the coins.
Monday came, and with it a bombshell declaration. We were informed that no, ultimately the Mint was not in fact obligated to redeem the coins due to some mumbo-jumbo technical loop-hole, the details of which I cannot recall. Back out came the half ton of coins from the bank’s basement vault, and back home to the U.S. went the owner’s son and the family booty. I was interviewed by the Ottawa press within 48 hours of the event, and the resulting story went “print viral” from one coast to the other. For not only had the Mint declined to honor their own very explicit marketing commitment on this particular series, but they had also, in effect, called into question the core underling “face-value” principal on their entire numismatic product line. The sad irony was, had they simply taken back the coins, melted them down, and flogged off (or more likely, simply reused) the reclaimed Silver bullion, their net loss due to the then difference between redeemed face-value and the intrinsic Silver value would have been perhaps ten grand or less. No small potatoes, but a corporate drop-in-the-bucket compared to the resulting damage-control they had to mobilize in order to shore up their impaired goodwill in the face of extremely poor optics.
A cobbled together, half-baked scheme was soon put forward whereby dealers in Canada would be supported in redeeming the coins from customers at face-value, on the understanding that we (dealers) could then “spend” the coins on Royal Canadian Mint inventory purchases with a 2% inconvenience fee offered to us. Even the Amazing Kreskin could have foretold that such a plan, with its intense cash-flow constipation, handling inconvenience, and obligation to in turn spend entirely on new retail product was not going to prove ultimately viable. A revised agreement with the Royal Bank to receive the Olympic coins for deposit to existing accounts proved more effective, however dealers such as ourselves – the ultimate receptacles for the coins in quantity – were forced by pure economics to purchase the coins at an average 10% discount off face-value, in order to cover the time and expense of facilitating the exchange. Thus, even in this new strategy of “accommodation”, former Olympic coin collectors still saw the integrity of the face-value of their coinage eroded. As complicated as this entire quagmire was, however, it would take only an appropriate increase in the market value of Silver – to the point where the intrinsic value of the Olympics coins would meet or exceed the face value – to quickly make the redemption controversy go away. This would take a further full decade to come to fruition, at which point Silver prices began a steady increase, enabling coin & bullion dealers to begin paying in excess of face-value for the 1976 Olympic coinage.
Thus, immediate problem resolved in the eyes of the average consumer just looking for a fair deal, though this came about entirely as a result of market forces happenstance, rather than through any committed and affective effort on the Mint’s part to both restore goodwill and reform their marketing practices.
Which brings us now full-circle to our present “déjà vu” parallel. When CBC first approached me last week with their request for an interview and comment, my initial reaction was one of surprise. Surprise that the Mint actually had the degree of loss that they were reporting, in that it implied (validly) that a sufficiently large number of customers had actually been successful in returning the coins in order to generate this write-down. On this the Mint actually deserves credit, in that it appears that whatever mechanism was put in place to facilitate returning the coins (i.e. “redemption”) actually served its purpose. So for this “golden window” I tip my hat. What really fuels my surprise, however, is my own professional experience that reveals these $20 for $20 coins are actually notoriously difficult to redeem currently, and have been so for at least the past year. Not only do I have first-hand experience of multiple customers being turned away from even their own banks, but my own recent single redemption transaction with one of my own banks (who, I must say, otherwise treats us very well) was extremely difficult, only being made possible after my pushing through multiple layers of front-line staff until getting a qualified okay from “head office”.
To anyone even thinking of espousing an official line of some form on the willingness of the Royal Canadian Mint to facilitate a hassle-free redemption process on these coins (which, after all, was once again the implied underlying pillar of the $20 for $20 program), I issue this simple challenge: take a handful of the coins to a bank branch – any bank branch – and see what loyal customers go through in trying to simply cash out of these “legal-tender” coins. Visit the coin businesses of any major Canadian City, and you will discover that very few (if any) continue to redeem these coins as a courtesy to their customers. This face-value floor, an undisputed covenant between the Royal Canadian Mint and their customers, has now fallen away, leaving most dealers in the economically-necessitated position of having to purchase these coins at heavy discounts off of face-value to avoid the alternative certainty of a money-losing transaction.
Crying about a financial kick in the shins on the $20 for $20 program evokes little sympathy from me. Marketing a numismatic program with a core emphasis on face-value viability without a clear, accessible, and easy reciprocal redemption process available at any time, whether currently or two decades down the road, makes two clear statements:
1) Any reference to “legal-tender” status is both frivolous, misleading and hollow, and;
2) As with any person or entity for whom history is simply relegated to the dust-bins of yester-year, the Royal Canadian Mint seems oblivious to the lessons afforded by the past.
The Road Less Travelled – My own meandering path from collector to Numismatist: Part 5
“Right place, wrong time”
In every life and career there are some memories that stand the test of time above all others. Memories that, upon reflection, bring you back to a moment in time that can remain as sharp and vivid as if it were just yesterday. In my own case there are likely a few such candidates, however only one stands out when I think of my earliest years in the coin business, and that would undoubtedly be my brief and bizarre encounter with the “Jesse James” of stamp thieves.
It was June of 1990, and nearing the end of my second year working for Lincoln Heights Coin & Stamp in the west end of Ottawa (if memory serves, I had recently been “upped” to Director of Numismatics for the rapidly growing company).
Some days earlier, we had received a faxed bulletin from the Ottawa Police about a valuable stamp collection that had been stolen in the National Capital region. It was notable not only for its extensive value, but for the unique character and rarity of the some of the material involved. As was always the case, a file-number was attached with a request to contact the Police if anything matching the brief detailed inventory happened to surface.
I do not remember the ensuing day of the week in question, but I can clearly recall the setting. Our store at the time was quite narrow, with cash and hidden work area at the very back, and a long series of end-to-end counters that ran up one side of the store to the front entrance.
It was a busy day, pretty much standing room only, with myself, one of our staff ladies, and the late Bill Perrin all serving at the counters. Bill, a retired senior and former wheeler-and-dealer in coins on the flea-market circuit, worked with us part-time. He was mildly crusty and never shy to speak his mind, but he was also trustworthy and attentive. We appreciated him, and I like to think he appreciated us. On this particular day-of-days, I finished whatever task I was involved with and received a customer at the small counter located at the very back at the store, so that I was facing the sales-floor and front entrance to the store (as we were in a shopping center, the entire front of the store was wide-open during operating hours).
I did not recognize the customer, a youngish mustached man perhaps in his late twenties or early thirties. He began the conversation by expressing an interest in selling his stamp collection, and I invited him to show me some samples (all the more ironic on reflection, knowing how little philatelic knowledge I had ever managed to absorb). That, however, wasn’t to be a problem on this occasion. There, on the counter before me, were placed two fabulous items that looked they had just exited out the back door of a museum. The first, an entire sheet of some early South American inverted stamp error, and the second some type of Spanish imperial envelope cover with ancient red wax seal still intact.
Why was my lack of philatelic knowledge not an issue here? The answer lay not five feet from where we were standing, in the police fax which contained images of these two precise items.
Hence – in addition to my heart which had temporarily planted itself in my throat – I realized I had an acute existential dilemma. There was no reasonable doubt that I was looking at a portion of the most valuable philatelic collection ever stolen in Canada. I obviously couldn’t confront the seller, however. I had no idea how he would react if he felt cornered – would he react violently, was he carrying a weapon, would he simply bolt?
I had a store full of people, which paradoxically provided both a sense of security as well as grave concern. Thankfully, customer-service auto-drive prevailed over panic, and we began an engaging discussion. The seller didn’t seem to know that much about his collection (no surprise there), and the need for higher philatelic expertise in order to properly evaluate the material before me may have been pretense for making a telephone call to Paul, the owner of the business.
The additional challenge, however, was that the telephone sat only about six feet away – although behind a glass door leading to a small processing room, I could still be both seen and heard by the suspect at the counter. Fortunately Paul was home to answer the call, and somehow – while trying to maintain a reasonably relaxed composure – I was able to convey the message that we needed help. And quickly. “Stay calm, the Police are on their way,” Paul assured me. I hung up, and turned my attention back to the stamp bandit.
Click to enlarge
I am not clear on how much time passed (it felt close to forever), but at one point I looked past the suspect and saw two uniformed Ottawa Police officers approach the front of the store. I felt frozen, not wanting to give the person any excuse to turn around, noting the sea of people that still stood between the Police and the two of us. As we continued to discuss the stamps, I watched one of the Police officers step to the end of the counter and begin a discussion with Bill.
“What the Hell!” was my immediate thought – resisting with every fibre the overwhelming desire to flail my arms at them like a drowning imbecile. And then it happened.
While the Police waited at our front entrance, Bill began making his way down the long inside path of the counter towards me, with a puzzled expression on his face. Coming up to me, he paused, looked briefly around, and then leaned forward so that only myself and the suspect could hear what he was about to say.
“Sean”, he quietly asked in his usual gravelly voice. “Do you know anything about a stolen coin collection?”
If ever I have experienced the sensation of feeling my life flash before my eyes, this was most certainly the moment. I’m pretty certain all the blood in my northern hemisphere drained away faster than you could say “let’s shank the rat”, though I could hear myself answering with a feigned “no” – which seemed an infinitely wiser response than “are you sure you don’t mean stamps, Bill?”
Fortunately for everyone concerned, the look on my face must have spoken volumes. The two officers quickly made their way into the store, and one actually moved around the counter to stand beside me in a protective stance. The suspect expressed cooperative confusion as he was taken into our sorting room for a chat, and only on showing them the faxed bulletin did the Police seem to understand the true dynamics of the situation.
Shortly afterwards, the suspect was led out of the office in handcuffs, and my last glimpse of him is something I will never forget – a look of genuine panic crossed his face as he watched one of the officers begin to fold the rare sheet of error stamps into quarters, for easier transport. A stamp thief he may have been, but at least he cared about the true philatelic integrity of the piece!
Click to enlarge
Some weeks later I received a nice letter of thanks from the Deputy Chief of the Ottawa police, informing us that three people had been arrested as part of the overall investigation. What the letter didn’t reveal was that the theft of the collection – apparently valued at a quarter million dollars – was apparently an “inside job” involving Canada Post employees.
Strangely (or perhaps not), the whole affair never seems to have hit the news, and I sometimes wonder who actually owned the stamps, and how they must have felt to have these treasures successfully returned to them.