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Don't resent coin melting ban; it's a great victory for gold and silver
10p ET Thursday, December 14, 2006
Dear Friend of GATA and Gold:
People are questioning the authority of the United States Mint to ban the melting and export of U.S. coins, as the Mint today proclaimed its intent to do in regard to pennies and nickels:
Most of the news stories on the subject seem not to have specified this authority, and neither did the mint's own statement, appended here.
But that authority is no mystery. It long has been part of federal law, United States Code Section 31, Subtitle IV, Chapter 51, Subchapter II, Section 5111(d)1, 2, and 3, which, referring to the secretary of the treasury, reads:
"1) The secretary may prohibit or limit the exportation, melting, or treatment of United States coins when the secretary decides the prohibition or limitation is necessary to protect the coinage of the United States.
"2) A person knowingly violating an order or license issued or regulation prescribed under paragraph (1) of this subsection shall be fined not more than $10,000, imprisoned not more than five years, or both.
"3) Coins exported, melted, or treated in violation of an order or license issued or regulation prescribed, and metal resulting from the melting or treatment, shall be forfeited to the United States Government."
Thanks to Cornell University Law School, you can find it all here:
http://www.law.cornell.edu/uscode/html/uscode31/usc_sec_31_00005111----0...
Of course as many governments, including the U.S. Government itself, have found before, making proclamations about coinage that defy the inherent economics of the situation is one thing and enforcing them is quite something else. After all, all those U.S. gold coins that were minted before 1933 and now reside proudly (and legally) in the collections of so many numismatists and gold bugs were supposed to have been surrendered to Federal Reserve banks around the country in 1933 because of a proclamation by President Franklin Roosevelt. Instead, it seems, most of the gold coins went underground, emerging again in a happier time.
But GATA isn't urging civil disobedience of the proclamation against coin melting. To the contrary, we may delight in it as a proclamation of monetary debasement. Now gold isn't alone, a matter of distant history in monetary debasement, what with U.S. gold reserves long having been officially valued by the Treasury Department at only $42.22 per ounce even as the market price (rigged as that market is) now exceeds $600. To most people, gold is an antique of no special relevance. But now even the hunble pennies and nickels in the pockets of EVERYONE are screaming "debasement" and proving an inflation rate far above the official rate.
This is sure to give people ideas that go far beyond the prospects for illegally making money by melting it down. So the mint's proclamation is nothing for gold's partisans to resent. To the contrary, it is a great victory for gold -- and of course for silver too.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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U.S. Mint Press Release
Thursday, December 14, 2006
http://www.usmint.gov/pressroom/index.cfm?action=press_release&ID=724
United States Mint Moves to Limit
Exportation & Melting of Coins;
Interim Rule Goes Into Effect Immediately
WASHINGTON -- The United States Mint has implemented regulations to limit the exportation, melting, or treatment of one-cent (penny) and 5-cent (nickel) United States coins, to safeguard against a potential shortage of these coins in circulation. The United States Mint is soliciting public comment on the interim rule, which is being published in the Federal Register.
Prevailing prices of copper, nickel and zinc have caused the production costs of pennies and nickels to significantly exceed their respective face values. The United States Mint also has received a steady flow of inquiries from the public over the past several months concerning the metal value of these coins and whether it is legal to melt them.
"We are taking this action because the Nation needs its coinage for commerce," said Director Ed Moy. "We don't want to see our pennies and nickels melted down so a few individuals can take advantage of the American taxpayer. Replacing these coins would be an enormous cost to taxpayers."
Specifically, the new regulations prohibit, with certain exceptions, the melting or treatment of all one-cent and 5-cent coins. The regulations also prohibit the unlicensed exportation of these coins, except that travelers may take up to $5 in these coins out of the country, and individuals may ship up to $100 in these coins out of the country in any one shipment for legitimate coinage and numismatic purposes. In all essential respects, these regulations are patterned after the Department of the Treasury's regulations prohibiting the exportation, melting, or treatment of silver coins between 1967 and 1969, and the regulations prohibiting the exportation, melting, or treatment of one-cent coins between 1974 and 1978.
The new regulations authorize a fine of not more than $10,000, or imprisonment of not more than five years, or both, against a person who knowingly violates the regulations. In addition, by law, any coins exported, melted, or treated in violation of the regulation shall be forfeited to the United States Government.
The regulations are being issued in the form of an interim rule, to be effective for a period of 120 days from the time of publication. The interim rule states that during a 30-day period from the date of publication, the public can submit written comments to the United States Mint on the regulations. Upon consideration of such comments, the Director of the United States Mint would then issue the final rule.
Those interested in providing comments to the United States Mint regarding this interim rule must submit them in writing to the Office of Chief Counsel, United States Mint, 801 9th Street, N.W., Washington D.C. 20220, by January 14, 2007. The interim rule appears on the United States Mint website at www.usmint.gov. The United States Mint will make public all comments it receives regarding this interim rule, and may not consider confidential any information contained in comments.
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