Lost Forever - Where Did They Go?
By AG | Monday, 15 September 2003
At one time, mintage figures gave a reasonably accurate assessment of the relative value of a coin. As logic would indicate, coins with low mintages would be worth more that similar coins with mintage figures of many millions.
This rule of thumb is no longer as accurate as a result of natural attrition and the smelting pots having taken their toll. In addition, the changeover to decimal currency in 1966 was the single most crucial move in reducing the numbers of available coins. The silver coins were refined for their bullion value while the bronze coins were simply melted down, processed and brought back as 1 cent and 2 cent pieces.
A Royal Mint report from the early 1970's tells the tale:
Large quantities [of pence] have been melted and used in Melbourne, Perth and Canberra to produce decimal bronze coins and some added melts for cupro-nickel coins as part of the copper content.
There are no exact figures to go by, but another paragraph in the same report indicates the enormous magnitude of the meltdown operation.
Storage for such large quantities of coin created difficulties for the Department of Supply and to help solve these, a contract was arranged with an Australian company for refining about 1,600 tons of pennies and halfpennies.
In the period from 1910 to 1964, the total value of all coins struck was approximately £70 million. By the mid-1970's, around £55 million of this had been withdrawn and either refined for it's silver bullion value or recycled as decimal coins.
Even as late as 1981-82, the annual report of the mint indicates that the sale of silver recovered from withdrawn coin amounted to $71,620. The purchase of withdrawn coin amounted to $123,912.13 and the sale of other metals (including some recycled copper) came to $470,351.83. At this rate, the number of coins available to collectors of the future will be insignificant indeed.
Most of the coins which fed the furnaces would have had large mintages and would once have been considered quite common. Their permanent loss will surely create new 'rarities' in time to come. The loss of such coins is compounded by several other factors. The number of people who find coins with metal detectors gives us an indication of just how careless, or unfortunate, we and our forebears are with change. Yet surely the number recovered can be only a small proportion of the amount originally lost. Recovered coins often have little value to the collector as many show the effects of being buried for many years.
There are many stories indicating that large-scale coin loss had been going on for many years prior to the decimal changeover. The fact that all pre-decimal coins (except the penny and halfpenny) contained at least 50% silver was reason enough to collect them, especially when their intrinsic value was more than their face value. This extract from the Brisbane Mail of 13th January, 1963, provides an insight into the problem:
The Commonwealth Mint may still be making money but it could be pushed to make a profit this year. With silver soaring to record prices on world markets, the silver in a 2/- is worth more than the coin itself. Last week in London, silver topped 106d sterling (132½d Aust.) an ounce - its best price in more than 40 years.
The breakeven profit for the Australian Mint appears to be around 102d stg an ounce. Taking into account the production costs, the mint could be running at a loss. It's bullion stocks had run down to a little over 400,000 pounds; 700,000 less than a year previously. Re-building stocks at current prices would be a costly business.
At the time of this report, a pre-1946 florin, which contained sterling of 92.5% pure silver, had an intrinsic value of 3s 6d. The profits to be had from melting down such coins was too big a temptation for some.
Although smelting down coins of the realm is an offence, the practice flourished as the price of silver continued to rise. Hong Kong became the unofficial Mecca for much of the smuggled pieces. The usual going rate was one pound for every 17 shillings worth of pre-1946 coins smuggled in and sold to a fence. Many of the smugglers raised the capital to buy the coins by selling 'duty-free' transistor radios from their ships.
There were many ways to open-up shop. A favourite was to open a bank account using notes for the initial deposit. A few days later a withdrawal was made with the customer asking for the amount in coin. It was then a simple matter of going through all the coins to cull out the higher-percentage silver coins. The others were re-banked and the process repeated.
Not all smugglers were successful, as newspaper reports of the early 1960's indicate. The Melbourne Age reported on 11th December, 1962.
Customs officials yesterday seized nine pounds worth of silver coins from a ship at Victoria Dock. The ship was due to sail today for Port Moresby, Manila and Hong Kong. The coins were seized after customs officials boarded the vessel. They said the coins had been minted before 1946 and had a higher content of silver than the present currency. They believed an elderly Chinese crew member intended to melt the coins down in Hong Kong.
An even bigger haul was reported by the same paper on 18th July, 1963:
Four Chinese seamen were fined a total of 140 pounds in the special court today for attempting to smuggle more than 500 pounds' worth of Australian silver out of the country. The seamen told customs officers they had each purchased one pound's worth of coins for 22/- and had intended to sell them in Hong Kong.
One month before, the Melbourne Herald reported;
A trade in Australian coins in Asia is probably operated by a ring of smugglers, customs officials said today.
And while this practice was flourishing, the Government itself was doing a pretty fair job of competing with the smugglers. This report from the 18th March, 1963 edition of the Perth News shows just how unwittingly efficient the Government was at reducing the number of pre-decimal coins for a new generation of collectors:
Electronic coin sorting machines are being used to recover dud coins which aren't worth a cent - and two bobs worth more than two bob. The machines are being used to sort out and retain the pre-1946 florins which have a higher silver content. Eventually they will emerge into circulation again - but as coins containing only 50% silver and 40% copper and 5% each of zinc and nickel. Now all but half of one percent of old coins have been withdrawn and one in about 200 shillings and florin pieces are being diverted back to the Reserve Bank's branch at Fitzroy.
With only about half a per cent of sterling silver coins left in 1963, the numbers left today must be even more discouraging. Earlier purges helped to start the ball rolling. Pre-1946 coins worth $6million were melted down in 1956 and shipped to the U.S.A. The coins were repayment of silver lent during the second World War when Australian coins worth more than £6 million were struck in Denver and San Francisco. These were silver coins of all denominations which carried a distinctive mintmark of 'S' or 'D'.
By June 1970, the mint had refined some 623 tonnes of coins with a face value of $11.3 million. The silver value from this process was worth $16.4 million. Two overseas firms entrusted to speed up this mammoth task also accounted for 1,000 tonnes each with a silver residual worth $61 million.
Several decisions concerning our copper coins resulted in big meltdowns, even before the introduction of decimal coins. A consignment of Australian pennies was sent to Japan in 1947 for use by the occupational forces following the second World War. However, few of the coins were actually used for this purpose. Copper-starved industries in the recovering Japan paid up to five shillings a piece for the coins. How many met their fate in this manner is anyone's guess.
While we do not know the quantities lost to the Japanese, we do know that 50 tonnes of Australian pennies ended up in the pockets of New Zealanders in October, 1966. This shipment, which represented some 5.5 million coins, was bought by the New Zealand Government to relieve a shortage of pennies until the Kiwi changeover in July, 1967.
And now, in this modern age of tax evasion and bottom-of-the-harbour deals, it is fitting to conclude with another newspaper report from the past - the Sunday Times, Perth, 21st April, 1963: ' The proposed introduction of decimal currency in February, 1966 is expected by Police and Treasury officials to flush out hoards of hot money. A flood of secret money could descend on Australian capital cities in the next three years. The officials said the fixing of a date for a completely new currency could bring to light bankrolls buried in back gardens for tax-evasion purposes.
It would also take care of the few pounds under the lino by pensioners worried about the means test and also the proceeds of unsolved robberies. Police said there was a great deal of hot money in the community. These hoarders of hot money would know they had only a limited time to convert it into more liquid assets. Assets they would look for would be things they believed could be turned safely back into decimal coinage without awkward questions being asked. Land and property deals would be out because of the incriminating documents involved.
So what does all this mean ? What is the result of this immense melting down of coins ? Simply that all our pre-decimal coins are in short supply and the numbers are still shrinking.
With more and more collectors coming into the hobby each year, it is also obvious that prices for this limited stock must rise. In addition, with the indiscriminate melting down of all sorts of dates and mintmarks, we are no longer sure of low-mintage key dates. In any event, it seems sure that the values of all pre-decimal coins in any condition must rise significantly in the future.