In my story of 1966, so far I have told about a number of great sales Stack’s held in that year, the growth of the hobby, and the loss of our friend and client Josiah K. Lilly. These and other things led to 1966 being one of our busiest years ever. And one thing that kept me particularly busy was our action against the Office of Gold and Silver Operations (OGSO) to protest their lack of clarity when it came to what could and couldn’t be imported into the United States. The suit was brought due to a lack of response from the OGSO to our application to import an extensive collection of gold coins from a client in the Netherlands. We wanted better answers to why we were not able to bring this important collection into the United States and why the OGSO wanted to restrict a portion of the coins without an explanation. By instituting a suit against the unknown regulations, we felt we could at least know the reason for denial, and learn why certain coins were restricted. In order to hear our case, the Treasury Department eventually had to borrow a hearing judge from the Commerce Department.
In late 1965 and early 1966 we spent hours preparing new inventories, marking which coins were highly rare numismatic items, which were known to have low mintages, and other important factors. The papers we helped our attorney prepare contained virtually what our catalog would have included.
At the initial hearing, I represented Stack’s as I had personally handled each coin in the collection and could attest that all that I had seen were genuine and not counterfeits. After reviewing the list, I asked the hearing judge to help us get the collection admitted to the United States so we could offer the coins for public auction.
Additionally, I invited several specialists who confirmed that the coins in the collection were scarce or rare numismatic items and should be licensed for import. My specialists included both Stefanellis (curators of the National Numismatic Collection at the Smithsonian), Henry Grunthal (curator at the American Numismatic Society) , and some collectors who were familiar with the contents of the collection. The evidence that our side presented was quite complete, and the attorneys for the OGSO were at a loss to refute. When they made their case, it was obvious that they did not have a deep understanding of numismatics and their points were vague and often not based in fact.
During the cross-examination by our attorney the main issue was the criteria that was used by the office or custom house, which had never been published or released. The OGSO implied that they had a committee which determined the rarity of any gold coins to be licensed for import and did not feel they had to explain the formula they were using or each specific denial. The initial hearing concluded with no rulings as the judge instructed the OGSO to bring to the next hearing (to be held in about a month) a clearer and more understandable explanation of how licenses were issued or denied.
Between hearings there was much correspondence and filings submitted to the judge so that the next hearing could be expedited. The basic question that the judge wanted answered concerned what was the formula being used and why was it a secret. The attorneys for the OGSO conferred and tried to explain what the qualifications were that made certain coins not candidates for import. They referred to the laws of 1933-1934 that exempted rare and unusual gold coins from having to be turned in to the government.
The first piece of evidence they presented was the Robert Friedberg book, Gold Coins of the World, published for the first time in 1958. It is a wonderful reference for gold coins. Since many numismatists contributed information and photographs, it was a most valuable source of information, and we were happy to see them using it.
The OGSO stated that it was easy to determine what was rare and unusual and what had collector value by using this book. They further explained that they had a formula to determine when a coin was rare enough to be licensed. Gold was valued at $35 per ounce in 1934 and had remained at that value until at least the 1960s. In order to determine the value of any gold coin, whether small or larger, the gold value at the time was multiplied by four (4x). If a coin had a listed value of at least four times the gold value, they could consider it worthy of being licensed.
So, we finally had an answer, though it made little sense to anyone who knew about numismatic value. Using the formula and basing it on the Friedberg Gold Coins of the World book would only make sense if that book contained complete listings of all dates and mints that made up a series, along with grade and price information for all those coins, which it does not. The book bunched coins together by design and provided an average value to each design and issue.
In my next article I will continue the story of our efforts to force the OGSO to clarify their policies on import licenses and to get approval to bring our Netherlands client’s coins to auction.