Is it Ethical to Melt Coins for Profit?
As most people are aware, the price of gold has reached record levels and is currently flirting with $1,300 (USD) an ounce. Silver has more than almost tripled in just over 3 years, rising from $6.40 in Jan. 2005 to about $18 an ounce today. Pawn shops, jewelry stores, and coin dealers are all doing a very brisk business in buying gold items from customers who want to cash in. Most of this gets melted down and/or resold fairly quickly in a market like this. But should coin dealers be melting down the very treasures they are charged to protect and conserve for future generations of collectors? Are some coins okay to melt but not others?
Case in point: in the March 10, 2008 issue of Coin World magazine, there was a cover story about a major coin dealer, David Hendrickson of SilverTowne, who says he has melted down thousands of gold coins for their bullion content. Here is the estimated number and types of coins he had melted down as of when the article was written:
- Between 5,000 to 7,000 First Spouse gold coins, both Proof and Uncirculated types combined, of Martha Washington and Louisa Adams.
- An undetermined number of First Spouse gold coins of Thomas Jefferson and Dolley Madison types
- Between 2,000 to 3,000 S.F. Old Mint Commemorative gold coins, both Proof and Uncirculated types combined.
- Between 5,000 to 7,000 Jamestown 400th Anniversary gold coins, both Proof and Uncirculated types combined.
Although this isn’t mentioned in the Coin World article, it is widely acknowledged that tens of thousands of classic Canadian and U.S. gold coins are also being dumped into the melting pot, such as the Saint-Gaudens gold Eagles and Double Eagles from the early 20th century that trade at bullion value (plus a modest commission.) Also going into to pot are the more common Liberty Head 19th century gold issues that trade around bullion value. Although nobody would go on the record with numbers, once coin dealer told me that he personally knew of more than 50,000 classic U.S. gold coins that had been melted down for their metal, just this year alone.
Silver coins might be faring a little bit better; the dealers I spoke to said that mostly what’s being melted down right now in silver is the “junk” like sterling silver Franklin Mint medals and ingots, and other non-official silver such as SilverTowne bars and rounds. (This tidbit came from a non-SilverTowne source.) Another type of Mint-issued coin that is going into the melting pot by the tens of thousands is the low-grade Canadian and U.S. silver that trades in bags at bullion value.
We are appalled at this mass melting of Canadian and U.S. coinage. Perhaps this is an attitude found more commonly among the collectors of ancient coins than the modern coin collectors, but we see coin collectors and dealers as stewards of our national heritage. These coins can never be replaced, and coin collectors have a duty to conserve and protect this heritage to pass down to future generations. After all, we can’t take them with us when we die, so melting them for bullion is just selfish and antisocial.
On the other side of the coin, however, are the folks who believe that if you pay for the coin, you own it. It’s yours to do whatever you want with it, even destroy it by tossing it into the melting pot. Some folks nearer to the middle ground on this issue wouldn’t personally melt their own coins (or sell them knowing for sure that was going to happen) but they don’t mind people doing it because it makes their own coins rarer and more valuable in the long run.
What do you think? Are these coin-melting dealers selfish, money-grubbing scoundrels who should be ashamed of themselves, or are they fully within their rights to melt away to their heart’s content? Why do you feel this way? Please share your opinion via the “comments” link below, and next week we’ll have a look at what people have to say.
Recent Update to Coin World article: Read the follow-up article to melting coins for profit.
The bottom line is… we want to find most coins a new home, not a melting pot. If there is history that can be salvaged, learned and shared, The Coin Co. wants to play a part. That’s why we do everything in our power to pay the most we can for your unwanted gold and silver coins so that we can turn around and find a good home for them. With someone that understands their historical significance and wants to pass it along. Our network of coin dealers and buyers are ready to pay us well, so that means we can pay you well.
So if you’re in Ottawa, Gatineau, Orleans, Almonte, Kanata, Barrhaven, Nepean, Rockland or anywhere in Eastern Ontario or Western Quebec, don’t hesitate to reach out to The Coin Co.
If you’ve got old, unwanted gold and silver coins and want to find out how much they are really worth, contact The Coin Co. Ottawa today and set up a free in-home or office evaluation. You’ll be glad you did!
1150-45 O’Connor Street @ Ottawa, ON K1P 1A4 @ 613.668.5123 @ firstname.lastname@example.org